What is the Importance of Data Retention?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 22 November 2019
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Data retention has long been important to the well-being of just about any type of business. In times past, this means maintaining archives of paper documents that could be retrieved when and as needed, often keeping those records for decades before discarding them. Today, electronic data retention has made the task easier, a fortunate circumstance since retaining documents is more important than ever if a business wishes to protect its interests and the interests of its customers.

There are a number of different types of documents that should be included in any type of data retention program. All electronic communications, especially emails and password-protected files and other documents, are essential to the retention process. Along with electronic correspondence, any type of agreements, contracts or other documents that include legal claims by or for the company must be retained even after those documents are superseded by newer versions. As in the past, paper documents like customer invoices and records, employee applications and personnel file contents, and health care data must also be archived in an efficient manner.


One of the most important reasons for creating and maintaining a solid data retention program has to do with legal issues. Simply put, any document that has to do with the operation of the business could contain information that would aid the business in the event of a lawsuit. The saved documentation makes it easier to reconstruct relevant events and timelines and prove the statements made by company officials regarding what they did and did not do in regard to that particular legal issue. Assuming the data retention program is thorough, efficiently archiving documents could save the business a great deal of time and money with any type of legal action, including issues regarding taxes, incidents involving employees, or covenants made with customers.

Along with providing information that could be critical in settling a legal issue, good data retention habits also offers the possibility to provide superior support to customers. The ability to trace events that occurred years before with a given client may pave the way for managing an issue that has come to the forefront today, or possibly providing inspiration for some new product or service that may be attractive to more than one client. The ability to compile reports from the archived data can make it possible to identify trends and spark ideas that would never have been evident otherwise. From this perspective, data retention is not just about creating and maintaining a record of the past, but also about creating a resource that may help enhance the prospects of the business in the future.


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