Reducing the cost of data security.

Compliance is a key issue in the post-Enron and post-9/11 era The Federal Reserve Board, Internal Revenue Service, National Association of Securities Dealers, and Securities and Exchange Commission are just a few of the regulatory agencies with new laws governing the storage of information. Many other industries have followed financial services in increased regulation. but with the high profile ethics breakdowns of Enron and others, the financial services world is under increasing scrutiny.

"Many industries, and particularly financial services, are having to account for data in ways they hadn't planned," says Butch Barkstelle, president of System Integration Architects (SIA), a Van Nuys-based computer solutions company specializing in small-to-mid sized IT systems. "Information as simple and basic as email records, if not in compliance, can be a cause for imposing fines."

Unfortunately, regulatory agencies, and more importantly the regulations they create rarely offer specific guidance on compliance. Companies are often left with ambiguous requirements they must meet. This can make compliance difficult and expensive.

An example of how information technology is addressing these needs is the rise of the "WORM" drive. WORM (write-once, read many) devices are a new requirement of a proposed IRS regulation, and a requirement of a current regulation found in the 1998 revision of the Securities Exchange act of 1934.

A key to fighting the high cost of data security is a new analytical process called Total Cost of Ownership (TCO), which firms such as SIA are now providing for clients. As technology improves, companies often find that the implementation of new systems can often significantly reduce a firm's IT costs. TCO Analysis looks at a company's requirements, its current or legacy IT system, and how it would be impacted with newer equipment and software.

"We've worked with companies that had no idea a newer computer system could actually reduce their overall IT costs," says Barkstelle. "This also lets companies gain compliance with regulation, plus they can implement other productivity-enhancing technologies, such as wireless systems, cost-saving "thin-client" terminals, and business continuity solutions such as data mirroring".

Business continuity is the emerging trend of companies to invest in systems that are replicated off-site. Should a disaster strike, a company can have complete "real time" protection of all corporate data, and allow for virtually instantaneous continuity of business, even if a system is completely destroyed.

This practice came to prominence after 9/11, where some financial companies had huge data files lost in the attacks, while others had duplicate systems that allowed for virtually instant business continuation from different locations.

Finding a solutions-based IT company is a good first step in overcoming both the high cost of IT systems and the new regulations many industries face. Much like shopping for a physician or attorney, companies should inquire how long their IT vendors have been in business. Companies should seek references from IT suppliers. It's also a good idea to ask for case studies of solutions the IT companies have provided for clients. And most importantly, one should look carefully at a both an IT company's experience and the experience of their staff.

By teaming with a knowledgeable and reputable IT solutions provider, financial services companies can look to gain compliance, increase productivity, prepare for potential disasters, and possibly even reduce their IT costs.

"It's important for growing companies to find ways for their IT systems to function as an rather than a liability," says Barkstelle. "Fines and company downtime can be very costly. So ,too, can be investing in an inappropriate technology. Finding the right IT partner, and the right IT system, though, can help a company avoid fines and create a more productive work environment."

This article was provided by System Integration Architects (51A). For more information, contact them at [phone].