Putting information to work

To gain advantage in an increasingly competitive market, adopting an information lifecycle management strategy could be the solution financial executives are looking for, writes José-Louis Pagés, director and manager Consulting and Integration Financial Services Industry EMEA, Hewlett-Packard

Today's executives of financial institutions still face tremendous challenges surrounding costs, controls and compliance, and competency. Business is now focusing back on customer services and aggressive growth. To remain competitive, these organisations need to respond faster to increasing complexity in their environments, to avalanches of new data and to renewed requirements for business resiliency. They also need to better leverage the existing information for competitive advantage and/or new revenue streams.

Designing an information lifecycle management (ILM) strategy is a required step to simultaneously transform data into an exploitable asset and to reduce the total cost of ownership (TCO). ILM appears as a key convergence area for topics such as compliance, regulatory reporting, security, reputation and operational risk. It is not only about adding extra resources, hardware or software, it is also about bringing the organisation's mindset to the next level.

Financial services: challenges

Recent years have seen a forced march to align technology management and business. Cost pressure has not diminished, but it has been followed by several compliance requirements. The cost of doing business in banking has risen, and executives are proposing new competency models for their IT and operations staff, and embracing alternative sourcing.

The pursuit of efficiency by cost cutting in most retail banks is now a habit, where the best in class see their cost income ratio at 50 per cent or below. Large institutions are reducing their IT budget, while transforming portions of their 'run-the-bank' maintenance costs into 'change-the-bank' investments, dedicated to business innovation. Customer services will constitute the single differentiator, where partnerships with clients and innovation in products are essential.

Investments required for compliance have gained priority. Executives are carefully considering the impact of potential data mismanagement on reputation and bottom line. The diversity of today's communication channels, from mail to instant messaging, and the associated data volumes constitute another aspect of the complexity of managing. With data growing almost 80 per cent a year, organisations need to be fit, know their customers, and make sense out of data - faster than their competition. ILM targets this challenge.

What is behind ILM?

ILM is a set of solutions and services to capture, manage, retain and deliver data and information according to its business relevance. ILM encompasses technology to store the data, resources to establish data management and handling policies. As its name implies, ILM covers information from its creation, via any device such as digital pen or optical character recognition of paper documents, to its eventual retirement and deletion. The associated goals for ILM are:

• Continuity in maintaining long-term access to data, as requested by several regulations
• Optimisation of storage needs and controlled storage costs, continuously reviewing data storage policies
• Ensured quality of service, where the information value of the data for the business is linked with user accessibility
• Compliance with regulatory legal requirements regarding preservation of records and communications
• Controlled data volume increases, while coping with a shrinking IT budget, growing files systems and emails
• Creativity, finding new revenue streams/exploiting existing information for competitive advantage

Adaptive enterprises consider the ILM journey as a durable and consistent way to reduce their TCO, and start to define the vision on how their information value evolves over time, and how their related needs for automation vary for information management, protection and migration.

ILM covers storage management needs by focusing on retention, data and reference information management (see Figure 1). It also encompasses content, document and corporate records management, and addresses these issues by automating information management through its lifecycle, based on relevance, usage and quality of service objectives.

Once the basics (back-up policies, security policies, storage resource management) are defined, ILM is implemented through a stepwise, structured approach:

• Data discovery and classification (a business-driven inventory), with a corporate view on the data-information
• Organisation of the data into storage tiers, from tape to a SAN
• Policy-based data movement, based on internal agreements around quality of service with the user, where data migration is automated from one tier to another to reduce data management costs
• Ensured data availability with data indexing

The final stage is to align the application landscape with the ILM-instituted policies, for selective access or more automated data management.

Today's relevance

ILM strategy is one of the elements of an adaptive enterprise vision. It grants access to the right data whenever a user needs it, and locates information despite growing data volumes. Metadata is added so it becomes searchable from many views; the way of looking at data as files and blocks shifts to seeing data as objects, with a wrap of descriptive metadata that enables the user to find relevance quickly.

With the continuous change of the business significance of data, companies will need to ensure that this data is placed on an adequate storage platform, and is indexed for convenient access. Part of managing information is often to normalise data so that data stores can be accessible for many decades and are not reliant on specific application versions.

ILM focuses on reference information or static information - as there is no point in wasting energy and resources on backing up static data. Moreover, static data needs to be managed differently to operational data. ILM is an extension to existing concepts such as back-ups or hierarchical storage management. Back-ups are obsolete when the next one is created. Data retrieval in those cases is always a heavy task. Hierarchical storage management only takes care of aligning data availability with a cost-effective resource. ILM considers the value of the information at hand, and how it should be secured, retained, and made available. The TCO for maintenance of the information is considered within the ILM.

Convergence: view for the future

From a bottom-up perspective, ILM appears to be a cornerstone for different technology and software topics:

• Advanced techniques for indexing, searching and retrieving information
• New storage facilities (storage area network, network attached storage)
• Usage of parallel computing for scalability and processing of unprecedented amounts of data (reference information storage system)
• Software solutions for security and compliance
• Considering a top-down view, ILM focalises on a set of business issues, impacting reputation of institutions, their bottom line and involving all departments in their organisations:
• Compliance with regulations, operational risk
• Integral audits
• Information risk management, covering topics such as IT security, disaster and recovery
• TCO for the infrastructure
• User access to relevant information

As these two views meet, CIOs and their IT staff must manage the ILM journey with their business counterpart. Finding the right partnership is essential to initiate the changes, in particular for the analysis and discovery phases.

ILM is starting to shift from being a technological hype to becoming a serious business topic. Over 50 per cent of the companies are considering investing in ILM over 2005 and 2006. Some still believe that the solution is adding extra hardware to cope with the amount of data. The major investments will be done via email archiving and HSM.

With these investments and the continuing pressure on costs, the need for complexity reduction and compliance with regulations is a must. A thorough approach towards an overall information usage framework and related policies constitutes a sound business decision. ILM can be the framework to holistically address the cost and risk challenges around information. ERF

Further information

Hewlett-Packard EMEA
Tel: +41 22 780 8111
Fax: +41 22 780 8542
Email: jose-louis.pages@hp.com
Website: www.hp.com