White. Paper. Elevating Archiving s Business Status. March 2013
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1 White Paper Elevating Archiving s Business Status By Steve Duplessie, Senior Analyst March 2013 This ESG White Paper was commissioned by EMC and is distributed under license from ESG.
2 White Paper: Elevating Archiving s Business Status 2 Contents Archiving Needs to Be Elevated... 3 Archiving s Case for IT Transformation Priority... 4 A Quick Refresher... 4 Why We Use It... 4 Who Relies on Archiving?... 5 Uplifting Archiving s Business Importance... 6 Why Make the Move?... 6 What Has to Change Organizationally... 8 A Good Place to Start... 9 The Bigger Truth All trademark names are property of their respective companies. Information contained in this publication has been obtained by sources The Enterprise Strategy Group (ESG) considers to be reliable but is not warranted by ESG. This publication may contain opinions of ESG, which are subject to change from time to time. This publication is copyrighted by The Enterprise Strategy Group, Inc. Any reproduction or redistribution of this publication, in whole or in part, whether in hard-copy format, electronically, or otherwise to persons not authorized to receive it, without the express consent of The Enterprise Strategy Group, Inc., is in violation of U.S. copyright law and will be subject to an action for civil damages and, if applicable, criminal prosecution. Should you have any questions, please contact ESG Client Relations at
3 White Paper: Elevating Archiving s Business Status 3 Archiving Needs to Be Elevated Transforming your thinking in regards to archiving is as critical as any other transformation within IT. It is obvious why IT transformation projects start with business systems: These have been designed to automate the most critical parts of an organization s operations. The question that no one is asking but should be is How are we prioritizing application transformation efforts? It is easy to go down the traditional application list, checking off customer relationship management, , human capital management, and so on. But doing so assumes that our application priority list is accurate. It might be, or it might be due for an update. Archiving systems inclusive of software and hardware that identify the information which organizations have to (or should) save to support records management, legal, or business reference processes should be moved up on the systems transformation list. The criterion for even considering the arguments is that archiving systems do in fact support critical processes involved in risk mitigation, legal, compliance, and technology cost optimization efforts. And archiving systems must integrate with other critical business applications which are being prepared for, or are already undergoing, their own transformation such as the aforementioned. IT can achieve some much needed scale by transforming archiving and the business applications it supports at the same time. Archives are not just adjunct backup processes any longer. ESG has long argued that backup and archiving solve entirely different challenges within an organization one for restoration using a copy method, the other for compliance and discovery using a move method but both are business-critical operations. As will be illustrated throughout this paper, the risks of not addressing compliance and discovery requirements are material and a logical argument can be made that they are no less significant than the fundamental ability to restore data. At its core, archiving serves a grooming process removing non-changing, or persistent data from production systems to purpose-built systems designed to store and deliver that information when a business requires it. Unlike systems of old, an archive that expects to deliver value back to the business within a reasonable timeframe will reside on disk based systems. Intelligent businesses are realizing that they can leverage archives for either recovery functions or discovery functions to make money as well as save it. The logical question becomes What happens if we do not move archiving higher on the critical business systems and transformation lists? The answers can be looked at in two ways. There is the uncertainty that comes when archiving is ignored with respect to business processes support, introducing noncompliance and legal risk as well as higher discovery costs from the need to manage and discover ever-growing piles of corporate information. And, there is the impediment factor. Failure to improve upon archiving systems can actually delay other business application transformations. For example, in a recent ESG research study highlighted in Figure 1, compliance and governance concerns were chosen by 29% of respondents as a major factor that social enterprise applications were not being more broadly used, making it the second most popular response, after cost. 1 If a modernized archiving system can eliminate this obstacle, a business is at more liberty to bring other critical applications into the social age, creating countless potential revenue, productivity, and process efficiency opportunities. 1 Source: ESG Research Report, Social Enterprise Adoption Trends, June 2012.
4 White Paper: Elevating Archiving s Business Status 4 Figure 1. Factors Inhibiting Broader Deployment of Social Tools What factors if any are holding your organization up from the broader deployment of social tools in general? (Percent of respondents, N=282, multiple responses accepted) Cost 42% Regulatory / compliance concerns 29% Lack of executive management buy-in Poor alignment with business processes End-user resistance to adoption 22% 21% 24% We find these tools / features just too confusing to use 9% None of the above 5% 0% 10% 20% 30% 40% 50% Archiving s Case for IT Transformation Priority Source: Enterprise Strategy Group, A Quick Refresher ESG refers to archiving as the process and supporting technologies used to retain data in a separate application and infrastructure environment. When information is saved in an archive system, it can be more easily managed for retention, discovery, and disposition (than if it were still in the production applications that created it). The common characteristics of an archive system include content indexing for searching, the ability to add metadata, and cost-optimized storage. Over the years, archive technologies have evolved to support policy-based management where specific files, messages, web pages, database records, and other items are identified and then copied or moved into the separate systems. Some organizations utilize policies to expire content once it is no longer needed for business or legal reasons. Why We Use It When any business or IT leader hears the term archiving, the typical immediate reaction is tape the longstanding backup storage media used to protect information from production IT systems. This perception is not wrong (tapes were the primary technology used to support archiving processes until the turn of the century), but it is dated. Since then, we ve experienced 100X growth in archival data, 10X growth in regulations, and 1000X growth in the number of archive queries making traditional tape-based archiving inadequate for current business requirements. Consequently, archiving systems have been modernized, complete with revolutionary software and hardware to support a variety of critical processes. As more business is conducted digitally, archives have been called upon to help records management and corporate counsel identify and retain data online so it is quickly searchable. Regulators and courts are putting timelines on information production, rendering offline application systems and storage methods useless. Just as importantly, archiving is helping IT support compliance and IT departments who frequently do not know how to navigate digital
5 White Paper: Elevating Archiving s Business Status 5 data sources. Nearly half of the IT managers surveyed by ESG research stated that records management and e- discovery tasks, respectively, were a burden or a significant one on their staffs. 2 The operational benefits of archiving become increasingly important as businesses deal with increased regulatory and legal pressures. Data disposition has the potential to deliver substantial capital savings, IT performance gains, and risk avoidance benefits. Discovery and records management tasks increase as the volume of data under management grows. In fact, organic data growth is the primary reason existing processes and often systems will fail eventually. Archiving data from production systems to those purpose built for such function invariably aids an organization s ability to manage data overall. Getting rid of data you don t need, and keeping the data you do need on the proper type of system is paramount to success. Almost half of those surveyed by ESG reported significant benefits from disposing of data; over half plan to delete more next year. When asked what specific cost savings or risk avoidance benefits they enjoyed, respondents reported reduced IT and storage costs (65%), reduced document management costs (63%), better ability to meet legal and regulatory deadlines (56%), improved systems performance (48%), and reduced IT maintenance costs (47%) (see Figure 2). 3 Figure 2. Cost Savings and Risk Avoidance Benefits from Data Disposition Policies What cost savings and/or risk avoidance benefits has your organization enjoyed as the result of its data disposition policies? (Percent of respondents, N=98, multiple responses accepted) Reduced IT and storage costs 65% Reduced document management costs 63% Ability to meet legal and/or regulatory deadlines for data 56% Improved systems performance 48% Reduced IT maintenance costs 47% Avoided costly litigation 37% Reduced litigation costs 36% 0% 10% 20% 30% 40% 50% 60% 70% Source: Enterprise Strategy Group, Who Relies on Archiving? A common misconception is that archiving is a back-office application used by a select few departments such as legal and records management. The reality is that archiving systems are frequently used by many, if not all, employees these individuals just do not always know it. Archiving system providers continue to work with more notable business application vendors to make access to retained data simple and seamless. For example, 2 Source: ESG Research Report, 2012 IT Spending Intentions Survey, January Source: ESG Research Report, Defensible Disposition in Practice: Perspectives from Business and IT, December 2012.
6 White Paper: Elevating Archiving s Business Status 6 archiving solutions make the information available to knowledge workers via Outlook or Lotus Notes plugins while integrating with common mobile devices. Employees do not know the difference between a newer message and an archived . All the while, specific interfaces (even apps) are being developed for attorneys, compliance officers, records managers, and IT administrators who may use archiving systems in a different way than the rest of a company. These groups directly benefit from the business process improvements facilitated by automating burdensome information retention, discovery, and disposition tasks. Each one of these departments has varying needs and can utilize an archive system to effectively accomplish them. As an example, attorneys frequently rely on IT to gather all information related to a specific matter and save it somewhere for a swift review in the hopes of finding pertinent case facts. This process is much better executed, audited, and defended with an archiving system in place as opposed to reliance on manual efforts which involve running searches on various systems, copying the data, and then having attorneys explore documents one by one. With more regulation, e-discovery becoming commonplace, and exponential information growth, a few core groups could not perform their jobs without archiving. Similarly, a large population of employees may not be able to access older content or quickly locate relevant data across collaboration systems if it weren t for archiving. Uplifting Archiving s Business Importance When it comes down to the who, how, and why, archiving shares many, if not all, of the same qualities as systems frequently characterized as critical business applications. The goal of elevating archiving s importance is to drive changes in how the system is resourced and the scrutiny of technology being used, as well as promote willingness to consistently examine the process and supporting infrastructure for improvement. Too often, archives are tactically put in place to solve a specific issue (e.g., retaining , moving file data to lower cost storage, etc.) and are never looked at again unless they create an operational issue or have to be upgraded. Very rarely do IT and business leaders think about what else an archive can provide or how to functionally improve the system. This has to change. Why Make the Move? The need will never disappear. Record retention requirements driven by regulatory requirements will remain commonplace. Industry and government rule makers are simply trying to adapt record and bookkeeping mandates to today s digital world. For example, FINRA the ruling body of the NYSE and NASDAQ registered representatives has introduced interpretations that broker / dealer websites, including social media content, are subject to retention regulations. 4 Similarly, e-discovery support needs should increase as business records, key correspondence, and collaboration completely shifts to electronic mediums. And IT will always have the need to optimize infrastructure whether it is made up of systems it owns or rents from cloud service providers. Content sources are evolving quickly. Archives have to be closely tied to existing business applications because they help manage and improve them. These business applications now include social collaboration features such as chat, task management, timelines, and external feeds. These applications are adding mobile components, facilitating information access and interaction for distributed workforces. And, many times, organizations are deploying these conventional business process suites using combined cloud and on-premises installations. Archiving systems have to be transformed with these applications (not after the fact) to support the new data sources, access points, and real-time deployment options. What Has To Change In Archiving? Scalability has to improve. Many corporate archives, especially those built around tape, are deployed with the intent to never actually access the data. Times have changed and now archive systems are, in cases such as , becoming part of the primary business application. They are used more frequently by all 4 Source: FINRA, Guide to the Web for Registered Representatives, October 2011.
7 White Paper: Elevating Archiving s Business Status 7 employees, not just a select few departments. And the amount of data that has to be analyzed and eventually managed and retained is going to increase. Every organization expects some level of data growth, but archive systems are also impacted by the pace at which data is generated and where the original source is. If social conversation threads are updated on a second-by-second basis, users are spanning traditional PCs and mobile devices, and business applications are running in a hybrid cloud, then an archive system must figure out how to retain what is relevant. Archive systems will also have to scale in terms of access queries will span billions of items and individuals waiting for results have been trained to expect Google-like responsiveness. Availability is paramount. Archiving itself supports critical processes and is integrated into other business applications which do the same. If an archive goes down or even slows down, repercussions across many different business processes from legal support to standard employee collaboration will result. It sounds simple, but archive systems are getting larger (see the scalability discussion above) and more complex (see the content sources discussion above). The bigger these multi-tier, index-centric applications get, the harder it is to keep them available and optimally performing. Organizations cannot afford to take an archive system offline to rebuild a multibillion item index. Query and web access services load balancing needs to occur automatically so users do not see performance degradation as archive systems scale. The underlying archive hardware architecture has to include the appropriate resiliency (i.e., clustering, easy resource provisioning) with layers of appropriate disaster recovery and backup / restore functionality that minimize outages and risk of data loss. The availability argument is a popular way to determine how an application should be viewed and managed by the business. In a 2012 ESG research survey of over 300 respondents, 76% stated that their highest class of application data could be down for at most three hours before the business experiences an adverse impact (see Figure 3). 5 Using that as a guidepost, it is easy to argue that legal and compliance departments that are consistently responding to opposing counsel, court, and regulator requests would, in fact, experience a material impact if archive data associated with these tier-1 applications were down for longer than three hours. This is one logical argument for putting archiving in a class of applications that it is normally not associated with. In short, if your archive drives business value and is unavailable, you have wasted money and time. 5 Source: ESG Research Report, Trends in Data Protection Modernization, August 2012.
8 White Paper: Elevating Archiving s Business Status 8 Figure 3. Downtime Tolerance Across Application Tiers For each of the following tiers of data, please indicate the amount of downtime your organization can tolerate before you experience significant revenue loss or other adverse business impact. (Percent of respondents, N=330) 40% 35% 36% Tier-1 data Tier-2 data Tier-3 data 30% 25% 20% 15% 10% 5% 0% 17% 5% 5% 16% None Less than 1 hour 23% 22% 22% 8% 9% 1 hour to 3 hours 13% 12% 3 hours to 10 hours 18% 15% 5% 4% 13% 23% 1% 2% 26% 10 hours to 24 1 day to 3 days More than 3 hours days Source: Enterprise Strategy Group, What Has to Change Organizationally Organizations that are willing to reconsider how archiving is managed within an application portfolio should not simply say, It s now more important to us. Benchmarks with other critical applications within the following categories can help determine where improvements can be made and where maintaining the status quo is reasonable. Businesses contemplating archiving as a real business application should consider the following: Capital resource allocation. Archive solutions are not a commodity because of the intrinsic value they have the potential to deliver to a business over time. However, organizations frequently under-resource the underlying hardware and data protection infrastructure because budgets were spent on the archive application. This approach leads to more issues down the road. If archives are to be run like business applications, the underlying foundation has to be top-class, which may require shifting budget from other areas of IT, but this is the right long-term move to achieve scalability for guaranteed response times in the face of data growth. Operational Excellence. IT departments have long built competencies and employee career paths around critical business applications. Many companies have general and organizationally specific SAP, Salesforce.com, NetSuite, Oracle ebusiness Suite, and Microsoft Exchange expertise. Archives are often managed by infrastructure teams that have a multitude of responsibilities, meaning focus and expertise can be limited. One way to get more value out of an archiving system is improving the management focus and expertise. Better, more informed training for employees using the system can be cultivated. ESG is witnessing legal departments dedicate resources to e-discovery specialization; records managers are building intricate knowledge of IT systems to better serve the business; and data scientists are driving sales and marketing analytic system upgrades. This list should include the development of archiving operational competencies to maximize what the systems can do for the business. Constant process and technology improvements. If an organization invests in an archive system, but the legal teams do not want to reexamine how it conducts electronic discovery, a huge efficiency opportunity is wasted. The same holds true for IT departments that do not capitalize on managing information once it gets
9 White Paper: Elevating Archiving s Business Status 9 into the archive. It is possible to deduplicate information and defensibly delete it, both of which free up valuable storage capacity. Archived data can be saved on more cost-effective media, lowering the overall cost to properly retain information over longer periods of time. By making these changes, IT better aligns archiving with critical business applications so that transformation efforts incorporate and enhance retention, discovery, and disposition management. A Good Place to Start A simple action to elevate archiving management as a critical business application is to incorporate archiving into an overall data protection strategy and clearly delineate between backup and archive requirements. As stated earlier, archiving is not just an adjunct backup process backup is about recoverability, archiving is about accessibility, search, discovery, and compliance. You can t simply back up your data and think you have an archive. IT departments need to work with application owners, line-of-business leaders, as well as legal departments to define archive requirements e.g., data retention and disposition policies, compliance, as well as performance and access requirements. Organizations can also enhance their archive capabilities by storing archive application data on disk-based protection storage solutions. Right now, many business applications utilize disk-based backup to hasten data protection operations and facilitate faster recoveries. The disk targets are often used to execute replication for disaster recovery purposes. The rationale for using disk is speed, which helps protect more data within a fixed window and expedites recovery/retrieval of information. In short, the risk of data loss and downtime is substantially mitigated. And IT departments are quickly realizing that using capacity efficiency features such as deduplication within the backup system drives more cost savings by protecting more data in a smaller data center footprint mandatory in today s high-volume, heavy access world. The same arguments hold true for archive data. Storing archive data like other business-critical application data will increase availability, better enable compliance, and speed discovery, keeping business users happy. IT departments will also appreciate the speed and efficiency of disk-based backup architectures that eliminate redundant data. This situation also creates a unique circumstance: Backup data and archive data can reside within the same systems, affording IT the opportunity to manage them together. Tasks such as data disposition become easier because all copies of retained information reside in the same place. Deduplication efficiencies become even greater because only one copy of a backed-up or archived file will exist the copy can be managed by the backup software for recovery processes or the archive software for retention processes.
10 The Bigger Truth White Paper: Elevating Archiving s Business Status 10 At the beginning of every IT project, a mindset is established as to how important the initiative is to the company. The perspective is usually based on the category of application being deployed, upgraded, improved, or replaced. If it is a top-tier/business-critical application, then few resources and details are spared. Other application categories be they operational, back office, etc. may not receive the best (or most) financial and infrastructure attention. And this type of triage has to exist, otherwise every system would be considered a critical business application and IT departments would quickly run out of money. The challenge is for the business and IT to agree on the criteria to classify applications and reexamine the list from time to time. The intent would be to move some applications up or down because their relative importance to the business has changed. All of this creates a strong argument for reevaluating where archiving stands in the application list and for moving it closer to the critical category. For far too long, information retention and discovery have been thought of as discrete activities within a select few departments. Now, with primary business process applications evolving rapidly and management requirements driven by legal, regulatory, and risk management updates, archiving has to be part of system transformations. Treating archiving as less than critical may actually impede broader application transformation while increasing legal, compliance, and IT operational costs.
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