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Why is Microsoft finally investing in Records Management? (Part 3)

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$2.8 Billion Dollars!

No, I’m not quoting the Austin Power’s villain Dr. Evil… I’m sharing a pretty surprising figure: This is the 2007 projected budget for electronic discovery services within the US. You might think I’m joking, but this is real data from the 2005 Socha-Gelbmann Electronic Discovery Survey. “How the heck can it cost that much?” you might ask. There are a lot of reasons, but fundamentally it’s related to one simple problem: we keep too much stuff!

Cost is a top-of-mind metric for many business decision makers, and there are a lot of costs that are unique to the information age. When we talked to IT managers a few years back, one of the big complaints we heard was “how do I increase the mailbox quotas for ‘short-term’ work, without ramping up the cost of backup/restore?” When we talked to legal workers, one of their top-of-mind concerns was the cost associated with searching for and producing content from information workers in response to litigations. Their biggest gripes? There was no good way to find content across server mailboxes, and there was no way to stop the endless growth of PST files (local e-mail files stored on desktop computers) that needed to be searched. We heard similar concerns about all of the unmanaged file servers that had grown up across companies. In one instance, we heard from a company that claimed to have literally tens of millions of spreadsheets throughout their IT infrastructure, with no way to find them, audit them, or even keep them up to date. When talking to records managers we frequently heard that the problem was “too big for their budget” or that they had a hard time convincing employees to “do the right thing” and file important records. Across the board we were hearing about cost, and yet, once again, we weren’t hearing the magical words. When we listened, we didn’t hear: “We need records management processes and software,” and yet, that is the best solution we’ve found to address all of these needs.

I think I understand why most customers didn’t think of records management. Those customers that already knew that good records management was the key, already had a solution in place. Customers that were frustrated by the high costs of storage, support, maintenance, backup, or discovery generally didn’t have a comprehensive records management plan, so of course they didn’t know that that was the answer.

Our customers also faced another common dilemma: the needs of different parts of the organization often seemed unrelated on the surface. We found a lot of cases where legal, IT, and records managers didn’t talk to each other because they didn’t realize they had shared problems or that the costs to the company could be consolidated with the introduction of good records management practices and software.

I don’t want to sound like an alarmist, but one of the trends that I’ve been watching over the past few years has been the unbelievable increase in content production. A recent study by Accenture found that in the next two years, more content will be created than in the entire history of mankind! Our experience with organizations is that 80% of their content is unstructured and 90% is generally unmanaged by active software or by services. What does this all mean? It means that huge volumes of information are being produced, stored, and—in most cases—discovered without any good process to classify them or declare them as records. The result is huge cost.

Another way to look at this problem is to take a historical view. Thirty to forty years ago, most enterprises had at least one dedicated records manager for each department, and they were charged with keeping the file cabinets in order. We still see this approach used at many smaller-scale organizations such as medical offices, but this trend is quickly disappearing. Take a second and ask yourself: in today’s information age, when it’s not uncommon for each knowledge worker to receive over 100 e-mails a day… who is responsible for properly filing or discarding all of those items? Who is responsible for sorting through employees’ e-mail and documents when they change positions or leave the company? How much knowledge are you losing each year to these problems? And even worse, how many smoking guns are you unaware of because you don’t have a consistent, managed process for applying retention rules to all of the content within your organization? The reality is, this is a serious crisis, but it’s a quiet one. Because the various departments that should work together aren’t, many businesses are running day to day with no awareness that their costs and liabilities are going up, and they aren’t taking steps to improve things. Each day that passes is just increasing the cost it would take to find a solution.

The feedback that we received as well as the trends we’ve been watching all seem to boil down to one simple point: the most important step that you can take to lower the cost of running your organization, whether you’re wearing your IT hat, your legal hat, or your records management hat, is to have consistent business policies and practices, backed up with good software and technology to help manage the volume of your enterprise’s content.

The challenge is a big one, as software and technology alone do not solve the problem. The biggest hurdle is to first decide if your organization has a records management problem. If you do, it is best to team up with IT, legal, and records managers to share the burden and build a unified solution. The next step is to design and roll out a solution to the information workers in your organization that requires almost no effort on their parts. Records management will not be a task they’ve ever done before and they may not see it as something that is related to their performance goals or compensation.

I hope that these posts from the past few days show how we (Microsoft) got to the point of recognizing that records management is a critical investment area and why we’ve put so much work into it in our 2007 releases. As we move forward, we want to start sharing with you about how we crafted software to address these problems. Starting early next week, we are going to have Tina Torres, Microsoft’s Corporate Records Manager, post her first entry, which centers on the business goals and challenges of records management. Later next week, two more things will happen. First, my colleague Ethan Gur-esh is flying to ARMA Houston to present our product and also provide a case study in Microsoft’s own first deployment of e-mail records management, using our Microsoft Exchange Server product. Following that, we will begin posting our thoughts about the structure of corporate information and how we think our new software releases can start to bring a lot more structure to your organization… and, ultimately, how it can save you a lot of money.

It should be a fun week!

Jason Cahill, Lead Program Manager

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