Growing pressure for data classification

Computerworld - A storm is brewing over the silicon fields of corporate data — and companies that don’t classify their data are going to get rained on. Why? Three reasons. New security-breach notification laws being considered around the world will compel multinationals to know where their most sensitive data is. The recent implementation of a U.S. Supreme Court decision on e-discovery allows for fines to be levied against companies in federal litigation that don’t know where all their data is. And the decentralization of corporate data to mobile devices is heightening the risk of not having business-continuity plans that risk-rank critical data.

If you’re one of the 65% of companies polled by Computerworld last year that don’t routinely classify their data, you’ll want to forward this list to Legal and IT to help inject some urgency into the situation:

• Data classification for breach response. U.S. state laws on security-breach notification have been so successful in prodding companies to shore up their information security that Congress, and legislative bodies in Canada, Europe and Australia are now considering adopting similar measures. To comply with these laws and prevent these breaches from happening in the first place, companies are starting to inventory all their data that trip these notification triggers. (See Data Confidentiality Classifications table below.)

• Data classification for e-discovery. Last December, amendments to the Federal Rules of Civil Procedure recommended by the Supreme Court concerning the discovery of "electronically stored information" came into effect. Under the new rules, companies need to produce all relevant information much earlier in the litigation process and may be fined stiff penalties for stumbling across new information during a trial. To avoid these penalties and reduce the cost of e-discovery, companies are finally starting to implement comprehensive data-retention policies that routinely destroy old records. (See Data Retention Classifications table below.)

• Data classification for business continuity. The growing popularity in U.S. corporations of data-leak scanning software has shown them just how much of their data is flowing outside their organizations. Employees are increasingly e-mailing company files to their home e-mail accounts and storing them on their handheld devices and laptops. To ensure that a company can recover its operations in the event of a large-scale disaster, there has never been a greater need for companies to have a handle on where all of their mission-critical data is. (See Data Recovery Classifications table below.)

I can just hear the groans on the other end of your e-mail. "Three classification schemes? Are you crazy? This would be too expensive, and employees would never get it."

That’s what I thought, too, until I came across companies that have put this into practice. I can’t mention their names, but they’ve found basic data classification to cost less than any of their enterprise-technology implementations. And their employees intuitively understood the data classes after a minimal amount of training and awareness. In one company, 75% of employees could accurately identify the company’s data classifications after just three months of an awareness campaign.

It all comes down to two basic messages companies need to inculcate in employees from Day One on the job:

1. Don’t store privacy-restricted or mission-critical data on your laptop, mobile device, home computer or personal e-mail account.

2. If you have official company records, you need to store them in a special share-drive directory, since your personal drive and e-mail account will be routinely purged.

This isn’t rocket science. And with these basic rules understood across your company, you can build out more rigorous security, retention and business-continuity programs over time.

You could do that, or bet that your company will never experience a publicized security breach, federal trial or large-scale physical disaster. As the Information Age converges with the Age of Terror, these kinds of bets will increasingly determine the outcome of careers and fortunes.

Jay Cline is a former chief privacy officer of a Fortune 500 company and now president of Minnesota Privacy Consultants. You can reach him at cwprivacy@computerworld.com.

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