Many organizations have vast accumulations of unstructured (and usually uncontrolled) information such as word-processed documents, spreadsheets, emails and social media content. What does unstructured information cost an organization?
Barclay T. Blair, President and Founder of ViaLumina, set out to answer that question and the following related questions earlier this year:
- Which kinds of costs should be included in the answer?
- Can we use this answer to drive desirable Information Governance behaviours?
10 Key Factors
In a white paper – The Total Cost of Owning Unstructured Information – that he wrote for Nuix, Mr. Blair identifies 10 key factors that drive the total cost of owning unstructured information. They are:
- Classification and organization
- Digitization and automation
- Storage and network infrastructure
- Information search, access and collaboration
- Policy management and compliance
- discovering and structuring business processes
- Knowledge capture and transfer
He also provides examples of cost drivers (i.e. elements that typically increase cost) and cost reducers (i.e. elements that typically reduce costs). For example, he cites outdated and unenforced policies, and uncontrolled information repositories as cost drivers while data maps, and defensible deletion and selective content migration are cited as cost reducers. You can download a PowerPoint slide (with notes) of the ten factors with cost driver and cost reducer examples from Mr. Blair’s blog.
Calculating the Cost of Unstructured Information
When trying to calculate the cost of unstructured information, he advocates the use of Full Cost Accounting to “create a complete picture of costs that includes past, future, direct, and indirect costs – rather than direct cash outlays alone”. That calculation would consider costs such as:
- General and administrative costs (e.g. IT operations, facilities, etc.)
- Productivity gains or losses related to the information
- legal and eDiscovery costs
- Indirect costs (e.g. accounting, clerical support, insurance, etc.)
- Upfront costs (e.g. system acquisition, depreciation of capital outlays, etc.)
- Future costs (e.g. migration, amortization of future outlays, etc.).
How to Realize Information Value
Mr. Blair also espouses a three step path to information value: clean (i.e. defensible deletion of information that is duplicated, valueless, etc.), build and maintain (i.e. an Information Governance program), and monetize (i.e. find ways to extract value from unstructured information).
Changing Organizational Culture
He concludes by discussing the need to challenge the culture in organizations by improving how employees use and manage unstructured information, and suggests two models to help organizations meet that challenge.
The first model is the ‘Information Calorie’ which he describes as follows: “thinking about information as calories at your organization can improve awareness of its costs, and drive change. The goal is not to add friction to desirable behaviors like collaboration and mobile work, but rather to make it more difficulty to create and consume empty information calories”. One of Mr. Barclay’s information calorie tips is to use anecdotes, case studies and facts to educate executives and employees about the cost of information mismanagement.
The second model is ‘Information Cap and Trade’, i.e. designing a “system that controls the amount of information pollution and rewards innovation and management discipline”. Some of his tips for creating that system are to set information volume targets or quotas and allocate them appropriately (the cap) and develop creative ways to use the credits such as headcount increases (the trade).
Although relatively brief (under 20 pages), this white paper challenges information professionals to change how their organizations view unstructured information, calculate the cost of that information, and figure out how to both reduce those costs and drive value. Are you ready to embrace that challenge?