Data is one of the transformational characteristics of the internet age. Compared to just 10 years ago (let alone to 20+ years ago!), data is cheap and easy to gather. It is the lifeblood of many businesses, from the largest technology companies to the smallest service firms. Here are a few examples of how companies are using data to transform their services:
- Retail businesses capture data about their sales to determine which products to stock and in what quantities, where to place them in the store, and how to price them. Leading companies are able to do this continually and can even automate their ordering based on their actual sales volume.
- Doctors and medical researchers use data, including information about medicines, treatments, and the patient’s own DNA to provide personalized treatments to their patients.
- Insurance companies offer their customers discounts for putting motion trackers in their vehicles. These trackers collect data about speed, distance, and acceleration to help the insurance company more accurately predict the likelihood that you will get into a crash, so they can give you a more customized price for your auto insurance.
- Local governments frequently use license plate readers to identify the vehicles passing through an intersection or under a bridge. This data can help local policy respond more effectively to AMBER Alerts or help authorities customize the timing of red and green lights to optimize traffic flow.
- And so many more!
If data is so great, what is the downside?
Although data can be incredibly powerful, it can also be dangerous. Some of the data you collect may be sensitive — credit cards, health records, financial transactions, trade secrets, etc. Businesses have a responsibility to protect that data, both for the good of the business and to protect their customers and business partners.
Having too much data can also create real inefficiencies in your business. For example, you may have so many documents that you are unable to find the right one. You also have to pay to store and backup all of your data, whether the data is useful or not.
If your company is the victim of a security breach, any data that you possess could be made public or used by your competitors or rivals. This could be very costly for your business — you could face legal, regulatory, financial, and reputational consequences. The more data you have, the greater the consequences you could face resulting form a breach.
What can businesses do to minimize the risk?
There are numerous controls that we can put in place to protect our sensitive data, including encryption, two-factor authentication, role-based access control, and more. However, there is another control that many businesses forget about — just delete it.
This is not to suggest that you just start deleting data without further thought — you need a plan. Many leading companies have data retention and destruction plans to help protect them. You can create a data retention plan for your business. Here’s how:
- Make an inventory of the types of data you have. Examples include engineering designs, product plans, employee records, and accounting data.
- Determine what business purpose the data serves (e.g., to forecast sales, to pay employees, to meet a regulatory requirement, etc.). Data that serves little or no business purpose is a candidate for deletion.
- Estimate how long the data will still be valuable (e.g., historical sales data may lose most of its value after several years, the law may require that you keep accounting data for a specific period of time, etc.). Data that is no longer valuable (and is not required for legal or regulatory purposes) is a candidate for deletion.
- Review the list of data you think you can delete with your financial and legal advisors.
- Draft a data retention policy. This is a simple document that describes the types of data your business maintains, how long it must maintain the data, and the frequency of deletion.
- Pick a method for deleting unnecessary data that supports your data retention policy. For example, you could do it manually once every quarter, or you could acquire a tool that will automatically delete aged data on a recurring schedule.
By eliminating data that your business no longer needs, you can realize several benefits: reduced storage costs, increased employee efficiency, and reduced impact from a data breach. Three wins from a single change is pretty good!