-----Original Message-----
From: Hugh Smith [mailto:[log in to unmask]]
Sent: Tuesday, February 05, 2008 3:47 PM
To: [log in to unmask]
Subject: Re: [RM] Avg. Cost offsite storage vs. onsite
On Feb 5, 2008, at 12:00 AM, RECMGMT-L automatic digest system wrote:
> From: "Link, Gary M." <[log in to unmask]>
> Subject: Re: Avg. Cost offsite storage vs. onsite
>
>> If the goal is to reduce the real estate foot print then storing them
> in media format is the best course of action.
>
> I believe everyone here will agree that the ability to convert 10,000
> boxes of storage into the size of a piece of Texas Toast is the only
> way to go. Does everyone agree?? :~( <
>
> Hugh,
Snip from Gary
>
> I don't agree.
And I agree with you. But I also believe that you will agree with me
that moving all your records offsite to Sloppy Joe's Storage may not
always be the best course of action. That cost is not the basis of
rationale for records management! It is the basic rationale for offsite
storage though. Once you choose to always select the cheapest vendor you
start down another slippery slope where you are no longer managing
records. In fact, the movement to the lowest cost offsite option is the
beginning of poor records management.
Management desires the lowest costs right up until they find themselves
in court like TJ MAXX or GE Money or Penneys or a host of other records
management failures that open the door to massive liability.
> If you have retention schedules in place and destroy your records
> accordingly, it's possible that it can cost less to store the paper
> than to do the conversion.
What conversion? Records are born digital now. Just ask the IT people
who think they are in control until the first subpoena appears and then
they call for records management to bail them out. This is very similar
to the large storage company that talks about their proficiency until
they lose a box or a tape and then "That is not our problem, because we
are so big that your problem doesn't matter to us. You gave up the right
to accuracy when you selected the Walmart approach to records storage."
> Also, from a information protection
> standpoint, storing those 10,000 boxes could be a form of dispersal,
> which records managers know is one of the four methods of protecting
> vital records. So if the storage company loses your one piece of Texas
> Toast sized storage media, you've lost all of your information. But if
> they lose only one box of paper, you've only lost .0001 of your
> information.
But what happens when they burn down the records warehouse and 20,000
clients are missing 100% of their paper back up. The truth is that over
time, all copies of the records move offsite. And not just the original
and the copy but 6 or 7 other copies that manifest themselves over time.
But the fever to get it offsite moves it all offsite.
In fact, the biggest argument to get it all offsite is that the IT
department keeps the original so the paper is just the back up.
>> ...... storing those 10,000 boxes could be a form of dispersal, which
>> records managers know is one of the four methods of protecting vital
>> records.
Eliminating the need for 10,000 cubic feet of storage by keeping one
extra copy of the Ultrium cartridge or the DVD is the argument of Disk
to Disk or Disk to Disk to Tape (D2D2T)
I have stated for some time that the records manager lost control of
their program and the quality in their records management program when
they allowed "Hostage Fees" to emerge with little fight on their part.
Records managers allowed further deterioration when they permitted
companies to store their records with little or no insurance coverage
and liability. The massive profits of offsite storage with almost zero
liability is how offsite storage companies attract investors.
But the goods news is that many of our membership have eliminated the
Hostage fees and they require some level of insurance coverage. Soon
Congress will pass some of the liability for lost personal and corporate
information downstream to the entity responsible for the loss rather
than punish the owner of the records who acted in good faith by
selecting a custodian for the records. The problem though is that
records managers refer to a chain of custody but then allow companies to
store the records who deny any partnership in the custody. The intent of
Congress to spread the liability to all involved is so close to becoming
a reality that the big storage companies have created an association to
lobby against their responsibility for lost records and Identity Theft
and competitive espionage.
Snip from Peter:
> What Hugh is pointing out is that RMs
> need to be expanding their horizons and start looking at risk
> management of the items under their control. Whether we're storing
> paper or digital with an offsite vendor doesn't matter, we need to
> also focus on managing the risk and holding the appropriate party or
> parties responsible for any losses.
Exactly. Note that the last three paragraphs in the article refer to new
standards, new technologies (Rosetta Stone, Paper Disk, etc.) but they
have not caught on due to the costs involved. Management always moves
to lower cost solutions. But a new force is working on them:
1) SOX piercing the corporate veil, 2) Personal Liability, 3) Identity
Theft Legislation, 4) ESI and Rule 26, and most importantly the attempts
by other countries to steal information, technologies and markets.
The business world is in a real war where laws and treaties do not
protect them. And CEO's and CFO's and Board members can be sued or
imprisoned for failure to protect. This is a huge leverage point for
RMs. But so far the IT people have seized the high ground by going to
evaulting, D2D and other technologies to try to protect the records.
Records Managers must infuse themselves into this solution or it will
fail.
Snip from Pat:
> From: Patrick Cunningham <[log in to unmask]>
> Subject: Re: Avg. Cost offsite storage vs. onsite
>
> Hugh, I'm going to respectfully disagree. A number of us have been
> trying to pound sense into the IT storage management world lately when
> some vendor gets up on his high horse and proclaims "Image it all!
> Storage is so cheap that you can keep it forever!"
Image what? It is all digital to begin with. I recently sold a vault to
a bank based on his assumption that he had 180 people typing away in the
bank. The reality was that only one typewriter even existed. Everybody
was using computers. The paper in a great majority of instances (other
than the Note and Deed of Trust and the Insurance Policy) were digital
files.
Even looking at the offsite warehouses, paper is being shredded at a
frantic pace. We are moving to keeping the boxed records for three years
and this is down from 16 years as the average over the years.
Records management must revisit the model. If 97% of records are born
digital then you would only need to image 300 boxes out of 10,000
potential. Imaging both sides as a worst case situation is only
$12,000. The storage cost of 10,000 boxes offsite would be $18,000 per
year not counting retrievals and replacing. Not to mention the 10,000
boxes at $7.60 Hostage Fee and the eventual shredding after their
lifetime.
Snip from Pat:
> I'm not in love with paper or commercial records centers. I'd just as
> soon be rid of them both. But I cannot walk in to my management today
> and justify imaging 300,000 cubic feet of mostly dead records that are
> in storage. No one is going to write me a check for $30 million to get
> that done. Most of those records will be shredded in the next five
> years and are rarely referenced. They are being retained for legal
> reasons or because the IRS isn't done with us yet.
If you will shred them in five years, imagine how much sooner you can
shred them if you have the best evidence record, "the original," on the
hard drive. And if you are not already D2D I bet you soon will be.
Remember back in the Diversified case how Mobil had thousands of boxes
destroyed but it was only a few that they really attached a high value
to. (Drilling Data I believe.)
In one recent fire over 1 million boxes were destroyed but also 1
million tapes went with them. I wonder how many records managers thought
"Hey! Maybe I should store my media with one company and my boxes with
another?"
But my argument from the beginning is that arguing that storing offsite
is cheaper than storing on site is no longer a valid argument. That a
records manager can be better than that! That storing one site might
make more sense for certain things. Stop thinking about cheaper in a one
dimensional sense. What is really cheaper in one sense can be way more
expensive in the long term.
Storing records with one company everywhere may be cheaper or maybe not.
In most cases a distributed deal can be better. But the best thing is
that an Owner Manager is on site and losses are far reduced.
Have you ever been at a small records storage company when they can't
find a box or a tape? They go nuts! They turn the place inside out and
they find it. Why is that? Because the Owner of the business finds out
about a mistake with hours of its occurrence. In larger companies, the
Owner find out 45 days later. An employee earning a relatively low
salary is the one deciding whether to stay late or work all night and
guess how the decision goes?
But the Owner sees massive liability, a lost client they worked hard to
win and they cancel lunch and dinner and they find it. That is why we
aren't reading each week about ABC Storage losing tapes. They store
them in real vaults and use high quality tracking software and every
account is important and every lost tape is a disaster to them. Just as
you see in the interview with GE Money, they care about the lost tape.
The Storage Company says "Well with our volume, losses are just part of
the human equation." I bet the CEO of Penney's doesn't agree with that
logic.
I bet if the the RM or the IT guy place a white paper about how things
could be different that he or she would be interested about now.
Snip from Pat:
> And one more thing... in almost every one of those data breaches, what
> was lost was electronic information -- not paper, so it is a red
> herring to suggest that we stop storing paper because of the data
> breaches.
My argument is that storing offsite because it is cheaper is not the
whole argument. And storing with a big company because it makes the
records management job easier because it is one invoice instead of 20
invoices is a ridiculous point of view. Quality should be the
determining point followed closely by accountability. Only then should
cost be a factor. And the discussion the other day was all about cost.
> But to suggest that we should image everything for the sake of
> security, well I don't think that is a reasonable approach to
> business.
> Nor is keeping everything in paper, for that matter.
And I agree with that point of view as long as the quality and
accountability issue is there. But with 50,000+ corporations where are
the headlines about them losing their own tapes. The headlines are
always about someone else.
> If you have existing paper
> records, make sure that they are all being managed and that you
> disposition them as quickly as possible -- and hold your storage
> vendor accountable for their security.
See we agreed about what it is about after all.
> I think Hugh said that with his tongue firmly in cheek ... apparently
> many of you missed his smiley at the end of that sentence.
>
> "I believe everyone here will agree that the ability to convert 10,000
> boxes of storage into the size of a piece of Texas Toast is the only
> way to go. Does everyone agree?? :~( "
As Nolene pointed out I had tongue firmly in cheek on that statement .
In fact, I doubt that there is any issue that you can say "You should
always do it this way." But SOX, ESI and IDentity Theft Legislation and
soon joint responsibility for information exposures or losses are making
this a new world. The Board of Directors now know what Records
Management is all about. This should work to your advantage if you
place accountability above low storage costs going forward.
Compare records management to cars. Cars got seat belts, then driver air
bags, then passenger air bags, now side air bags, anti-roll over
differentials and so on. Did human life become more valuable? Did
security features drop in price? No, new legislation and fear of
litigation forced automakers to step up. But records storage companies
deny liability and have hostage fees to keep you from moving. When will
records management and CEO step up and force accountability. It has to
start with the RM because the CEO has no idea Hostage Fees are in
effect. RMs know they are compromised. If a few companies fought them
openly they would go away because they are restraint of trade. Ideally
ARMA would fight this as a national issue. It would be the single
greatest thing ARMA could do to improve the overall quality and
accountability that RMs can expect from their storage companies. After
all the legitimate threat to pull your records was what made people
respond to you. You have lost that in the last few years and you need to
get it back.
ARMA's next President will come from this Listserv membership as many of
the others have in previous years. If this removal of hostage fees was
made a key platform issue, the fees would go away and the industry would
become more secure. Congress is doing their part.
Free movement of records to the most secure vendor would revolutionize
the Records management solution. But instead hundreds of thousands,
millions, of records are stuck with vendors with no
incentive to change because the records are hostage. It is time for
a change. If you let it continue on it will become a standard practice.
Until that time, don't look for cost benefits, look for performance in
the equation and control by the RM is the way to achieve that.
Hugh Smith
FIRELOCK Fireproof Modular Vaults
[log in to unmask]
(610) 756-4440 Fax (610) 756-4134
WWW.FIRELOCK.COM
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