For every decision made, email sent or document written, businesses have to store large amounts of data that they have to manage internally. Ninty per cent of the data in the world today was created in the last two years, with IDC predicting that the ‘Big Data’ market is expected to grow from 3.2 billion  dollars in 2010 to 16.9 billion dollars in 2015. This growth of data is instrumental for many companies driving operational and cultural change, as the information holds a wealth of marketing, business and sales insight.  Companies are beginning to take advantage of the vast amount of data that they store to obtain a competitive advantage. However, there comes a point when the sheer volume of data becomes a barrier to extracting value, and finding relevant information becomes a challenge.

The challenge of unmanaged data

If large amounts of data are left unmanaged businesses can be faced with burgeoning storage costs and, in some cases, it can even cause system malfunctions. In addition to this, storing vast amounts of information across disparate locations makes it more difficult to identify business critical information. It is vital for companies to understand that all of their data cannot be kept forever and appreciate the importance of only retaining the information that is relevant.   However, businesses must be aware of, and comply with regulations and legal standards when destroying unwanted data. Those that fail to do so could find themselves facing potentially expensive law suits. It is therefore critical to implement defensible disposal, through information governance policies and processes that ensure organisations do not leave themselves open to legal action.

Locating data

Imagine, for example, if your organization is sued. One of the first steps is to disclose relevant documents and data. But what would happen if some of the relevant data couldn’t be found and it was later discovered you didn’t turn over some information that could have helped the other side’s case? The Judge can reverse his ruling on the case and can issue an adverse inference, assign penalties etc. The withholding or destruction of evidence is unacceptable and can end up costing companies millions if found guilty.

Courts today don’t look kindly on companies that claim to have “innocently” destroyed data, and a finding of ‘spoliation’ will most certainly lead to very serious penalties. Instructing employees to delete information without regulation, enforcement and auditing, can be more damaging than not telling them to do it at all.  There have been numerous cases where companies have been reprimanded for holding organised deletion days, or “shred days”, which have led to the spoliation of data needed for future litigation.

The price of destroying data

A good example of this was in October 2012, when District Judge Ronald Whyte in San Jose reversed his own prior judgment from 2009 against SK Hynix, awarding Rambus Inc. 397 million dollars in a patent infringement case. In his reversal , Judge Whyte ruled that Rambus Inc. had spoliated documents in bad faith when it hosted its companywide “shred days” in 1998, 1999, and 2000. Judge Whyte found that Rambus could have reasonably foreseen litigation against Hynix as early as 1998 and that Rambus had engaged in unruly spoliation. The Judge therefore reduced the Rambus award from 397 million to 215 million dollars.

Although an organised “shred/deletion/disposal day” may be an innocent procedure, used to decrease data, these words certainly hold negative connotations. One would expect corporate attorneys to instruct all custodians within their companies that these terms should be used sparingly or not at all in communications because of the questionable implications.  

The Rambus case highlights the need for companies to adopt a watertight information governance process that includes a thorough defensible disposal strategy.  A structured system would have been capturing, indexing, applying retention processes, protecting content on litigation hold and efficiently disposing of the irrelevant content on a regularly scheduled basis, avoiding any potential legal fallout.

Excess information

Forbes claims that 69 per cent of information in most companies holds no business, legal or regulatory value. If companies can develop a process that enables them to get rid of this debris and retain only the relevant information, they can not only reduce storage costs and improve performance, but spend more time innovating, rather than dealing with potential law suits.

Nick Patience is  Director of Product Strategy at  Recommind