Calculating electronic records storage costs

Last week, I walked through the various considerations and costs of storing paper records.  This post will do the same for electronic records and follows the same formula of not taking into account personnel or overhead costs or depreciation of equipment.  If you prefer a truncated version of this information, I’ve created a 1-page brochure of questions to consider about electronic records storage costs.

The first steps are the same, whether you store your electronic records on premise or in the cloud:

  1. Calculate the amount of storage necessary for your electronic records:
    1. image of folder propertiesFor born-digital records, this can easily be determined from the properties of existing file folders.  If your organization tends to retain records for the long-term or is not in the habit of purging routine, obsolete, and trivial data, this number will tend to grow exponentially.
    2. If you plan to scan paper records, you’ll need to determine the file format and resolution you intend to employ before you can estimate the necessary storage.  (The Library of Congress maintains information about recommended file formats.)
  2. Multiply the answer found in #1 by 2 so you can have at least one backup of all your files.

On-Premise Storage

Calculating the costs for storing your electronic records on premise will largely depend on the size of your organization.  Larger organizations likely have IT departments that set fee scales for each gigabyte (GB) of storage used.  Be aware:

  • the cost may differ depending on whether you wish to store sensitive or non-sensitive data
  • there may be minimum blocks of storage available
  • the cost is likely calculated based upon the storage available to you, not the amount of storage you actually use
    sample costs for server storage

In smaller organizations, you can calculate the cost of each GB of storage by dividing the capacity into the cost.  But don’t be surprised if the advertised capacity of the drive is different than what the computer registers — most humans think in base 10 numbers, while the computer calculates in base 2.summary of drive capacityFrom least to most expensive, storage options include magnetic data tape, hard drive disks, and solid state drives (although the initial set-up costs for tape storage will probably exceed the other options).  If you want to be able to find your records, you should also invest in a document management system or some other means of indexing your electronic records.

Cloud Storage

Cloud storage means that your data is stored on remote servers rather than on premise, making it accessible through the Internet rather than a direct connection.

  1. Cloud storage generally breaks down into four components (and many providers have pricing calculators):
    1. Storage, calculated on the amount of data stored and usually charged at monthly rates
    2. Requests (e.g., put, copy, list, select) and data retrieval
    3. Data transfers (e.g., your website calls an object that’s in cloud storage)
    4. Data management (e.g., inventory, analytics, object tagging, replication)
  2. Determine whether the cost of backing up your files is included with the above fees or requires additional payment.
  3. Confirm the vendor’s process for purging data that has met its required retention (including any replications) as well as what sort of destruction certification they provide.  For anything other than standard storage, (e.g., nearline, coldline, archival), you will probably be charged for a minimum storage period, even if you choose to delete the file sooner.
  4. Determine whether there is proprietary software necessary to access your stored records and whether it is included in the storage fees or requires additional seat licenses.

Although these won’t directly impact your costs, here are some additional considerations that should be addressed in your contract with a cloud storage vendor:

  • Is there a system provided for indexing the records?
  • Is there a mechanism for avoiding spoliation of evidence (i.e., a method for establishing a litigation hold)?
  • What are the performance/availability guarantees (e.g., planned and unplanned downtime)?
  • Who owns the data that is stored and does the vendor have the right to access your data and profit from it in any way?
  • What is the procedure (and cost) for exporting records (including images as well as metadata) at the end of the contract period and/or when vendor ceases operation?
  • If your organization is subject to compliance requirements, you probably want to determine specifically where your vendor will be physically housing your electronic records (e.g., are they stored in Europe and, therefore, now subject to GDPR requirements?).
  • If your organization works in a highly regulated field like law enforcement or healthcare, you also will want to investigate the enforcement of security provisions by the vendor.
  • If possible, you may even want to determine what power source your vendor uses to cool the server farm, so you can take into consideration the environmental impacts of your electronic storage.

Hybrid solution

In reality, you may wind up with a combination of on-premise and cloud storage for your electronic records (e.g., you may store your active records on premise and backup your records to the cloud).  If your employees do not all have Virtual Private Network (VPN) access to locally stored files, this may be a factor that encourages more usage of cloud storage (this is definitely the teleworking influence talking!).

The complicated part of calculating the costs of electronic records storage is not in the formulas but is instead in the various factors, like:

  • Do you need the capability of sharing files with people outside your organization?
  • Will you digitize records into TIFF images or PDF files?
  • Which files can be relegated to coldline storage because they are only rarely accessed?
  • Do you have the staff who can adequately monitor and maintain on-premise storage systems?

But I have included a few calculations in the spreadsheet that might prove useful.  (As with the paper records calculators, the yellow cells are places where you should enter data; the remaining cells have formulas.)

I’ll conclude with one sound piece of records management advice — just because storage is relatively cheap, don’t let your organization plan to retain all electronic records permanently.  There are risk management and administrative reasons for defensible destruction that should outweigh the financial considerations.

Calculating paper records storage costs

Periodically on the Records Management Section listserv, a question arises about how to calculate the costs of records storage.  Sometimes the person is doing budget planning or looking to contract services; others may be formulating an argument about the value of good records management.  So I decided to make this my project for RIM month and have developed some simplistic models for calculating the costs of storing records, both paper and electronic.  (Please note: these models do not take into account personnel or overhead costs or depreciation of equipment.)

If you prefer a truncated version of this information, I’ve created a 1-page brochure of questions to consider about paper records storage costs.  What I’ll do here is walk you through the models and provide examples for calculating the costs of storing paper records.  Information about storing electronic records will follow in a separate post.

In-House File Cabinets

If you’re setting up an office or reconfiguring your space, it might be useful to calculate how much it costs to have file cabinets occupying some of that space.

  1. Identify the number of cabinets used/needed for storage.  This is a simple count of existing cabinets.  To calculate how many cabinets you may need, a standard 4-drawer vertical letter-size file cabinet holds about 6 cubic feet of records.
  2. Calculate the number of file folders needed to house the records (at least 1 folder for every inch of paper).  A standard drawer has about 26 inches of usable space, so for ease of calculation, you could estimate at least 30 folders per drawer.
  3. Calculate the cost of each file cabinet.
    1. One-time cost to purchase the cabinet
    2. For leased space, ongoing cost to use floor space for cabinets — measure footprint of cabinet + space that must be left free in order to open drawers and access records stored
    3. For owned space, there’s also a less monetarily-quantified opportunity cost if you’re using floor space for cabinets rather than other purposes (e.g., could a file room be turned into a break room or a conference room?)

In order to compare effectively with other options, I’ll calculate the monthly cost of each cubic foot of records stored in a file cabinet in your office (with the yellow cells being places you fill in the information you gathered and the others having formulas you can see here):calculator for file cabinet costs

In-House Storage Center

You may own a warehouse or similar sort of facility that you can use as a storage center.  For the purpose of this exercise, I’ll assume the records have already been foldered (but if not, see above for calculating expense).

  1. Calculate in cubic feet the volume of records to be stored.  The University of Delaware Archives and Records Management provides a useful conversion chart.  Or another way to look at it is that a standard cubic foot box has dimensions of 15”x12”x10” and about 3,000 pieces of letter-sized paper can fit inside (although this number will be dramatically lowered depending on the use of fasteners and folders).
  2. Calculate the number of boxes needed to house the records.  (HINT: Should be the same answer as #1!)  Determine the cost of each box.
  3. Calculate the number of shelving units needed for storage.  The specifications for the shelving unit should indicate the dimensions, and if you’re looking at shelving actually intended for shelving boxes of records, they’ll probably even list how many boxes can be stored on each unit.
  4. Calculate the amount of floor space necessary for the shelving units and to access the boxes stored on the units.  Estimate at least 3 times the footprint of the shelving unit.  As with the above example, for leased space, you’ll have the ongoing cost to use this floor space for shelving.calculator for storage center costs

This model assumes the real estate used for this storage center is much less valuable than your office space.  If you want to be thorough in your budgeting calculations, you should also identify the service equipment that will be necessary to store records (e.g., ladders, carts, pallet jack).  And if you want to be able to find boxes that you store, you should also buy/develop an inventory system.

Both of these in-house models calculate the up-front costs (e.g., cabinets, boxes) into the total monthly costs.  If you want to see a longer term method for calculating costs once these are paid, go to the spreadsheet.

Off-Site Vendor

This model begins much the same as storing records in your own storage center, but there are significant differences that you should make sure are explicit in your contract, such as security and privacy guarantees.  Also make sure you understand all potential fees (e.g., administrative fees, delivery fees, etc.).

  1. Calculate in cubic feet the volume of records to be stored.
  2. Calculate the number of boxes needed to house the records.
  3. Identify the cost to deliver records to off-site storage.
  4. Identify the fee to store records (probably monthly).
  5. Estimate the cost to retrieve and replace records (probably set fee per box):
    1. Consult internal usage stats and/or consider the likelihood of audits/litigation/records requests for stored documents.
    2. May also include transportation costs to and from storage facility.
    3. Be aware there’s also a fee to refile the pulled records.
  6. Identify the cost to destroy the records.calculator for vendor costs

Whether you need to make plans to store paper records or you need to encourage defensible destruction as a cost saving measure, I hope these models will be useful to you.  And if you’re interested in seeing the considerations for storing electronic records, come back next week!