The Hunt for "Orphan Storage"

By Rich Walsh, Viewpointe (www.viewpointe.com)

Storage professionals are now under pressure to find and use “orphan storage,” rather than buying or building more capacity. Orphan storage is a form of unused or unallocated data in everything from a database to disk drives and storage area networks. The problem seems so universal, that I hear this almost everywhere I go. I recently heard one executive say: “When we buy storage, we know where it is, but now our mandate has become finding unused storage, wherever it happens to be.”

Symantec’s CEO has even gone so far as to tell the market to "stop buying storage." I couldn’t agree more with this sentiment. Not being able to use your existing space or, worse, access the storage you already have – those seem to be the larger problems. Certainly IT executives are probably both gratified and mortified that this issue, which is hardly new to them, is finally getting some attention.

Recently, we asked IDC to take a deeper dive into this issue; and in a whitepaper, IDC noted outsourced storage as a good solution to the growing capacity problem. Generally they concluded that for easy access, as well as appropriate amounts of storage, outsourced systems work very well. Moving data to a hosted repository allows companies to pay only for the actual capacity they currently need, as opposed to an in-house infrastructure that is generally built for future consumption. And, this approach may be better suited for accessing the needed data at a later date.

Right now, IT executives want to make good use of all the equipment and devices that they have already purchased, and that is sound business judgment. Still, at some point, organizations are going to deplete the space they have and simply purging existing files may not be enough to keep up with the increased demand.

However, the question remains: What should companies do once they have determined just how much existing storage they have? Will they continue to buy ad-hoc, only to be faced with the exact same orphan storage problem in a few more months? Or, is it time for a fresh approach to this ever-growing problem?

I can see clearly now

Posted by Mark Brousseau

Recent advances in technology are raising the bar for payments analytics capabilities. Some of these technology enablers include: higher capacity and more affordable disk storage; database management systems with data partitioning; and evolving data warehouse capabilities. Leilani Doyle (ldoyle@usdataworks.com), product manager with US Dataworks (www.usdataworks.com) says these advances couldn't have come at a better time:

As a result of the recession, enterprises are under pressure to predict the internal performance of the organization more precisely than ever before. For organizations that do this well, the payoff includes lower costs, higher customer retention, increased responsiveness, a reduction in fraud, increased productivity and ultimately, increased profitability, explains David White of Aberdeen Group.

An Aberdeen Group benchmark report found that Best-in-Class companies used analytics solutions to improve their ability to detect risk by two and a half times, and that 76 percent of Best-in-Class organizations enjoyed a customer retention rate of 90 percent or better, thanks in part to analytics.

Drawn by these benefits, more organizations are evaluating analytics solutions, particularly for payments environments. Twenty-four percent of organizations plan to adopt analytics technologies within the next year, reports Aberdeen Group. "The fundamental drivers of adoption remain strong," says Dan Vesset, program vice president for IDC's Business Analytics Solutions Research service, adding that even during the recession, the business analytics software market continued to grow.

In payments, demands for information reporting and analysis have never been greater. Key decisions depend on the ability to accurately monitor, measure and predict operational needs and payment trends. Most organizations try to bridge legacy payment silos, only to find themselves left wanting -- despite a tremendous effort expended to integrate, report and analyze data across payment channels.

The Case for Analytics
Several trends are driving demand from payments processors for business analytics solutions:

• The need to predict the future. All operations managers, treasury executives and risk managers rely on historical data in order to properly plan for the future. The more timely and more complete the data these individuals have at their disposal, the better the predictive models can be. The same concept holds true for predicting consumer buying behaviors.

• Increasing complexity of payment types. New payment channels have emerged over the last few years, and we are certain to see the evolution of mobile payments during the next year or so. There's no question that consumers and businesses alike are rapidly changing the way they make payments. In the past, consolidating this data for analytical purposes was extremely difficult, if not impossible. Today's advanced analytics tools solve this problem.

• Fraud detection. When it comes to payments, fraudsters are becoming more sophisticated, and the economic downturn has made them more desperate than ever. Businesses need to protect their assets with superior fraud detection. A key element of any fraud detection program is the early and accurate identification of unusual patterns and behaviors. Today's advanced analytics tools give organizations the ability to analyze payments data across channels and produce actionable assessments that can prevent or stop fraudulent activity.

• Staff management. Using analytics to identify changes in peak processing windows enables organizations to better manage their staff, which have been stretched thin after the recession.

• Reduced cost. Consolidating data with an enterprise analytics solution enables organizations to decommission redundant systems, some of which are maintained only for their archived data; some large companies are sitting on old, out-of-production systems for this very reason.

The Bottom Line
Today, financial institutions, corporate billers, and government entities are challenged to manage images and data from multiple payments channels, and to provide a high-level of data protection, data accessibility, and data tracking and reporting for compliance. Adding to these challenges are ever-increasing demands for real-time analytics to improve corporate agility and customer responsiveness. Traditional siloed payment archives are too costly, too inefficient and too fragmented to be effective. The answer lies in emerging payments analytics solutions.

Using analytics solutions, organizations can finally get a clear and timely view of their operations.

What do you think?

News from the AFP Conference: Tuesday

Posted by Mark Brousseau

Bottomline Enhances Global Cash Management Platform

Today at the AFP Annual Conference in San Francisco, Bottomline Technologies announced new functionality for its WebSeries Global Cash Management platform, enabling banks to leverage industry standard messages for faster, more efficient cash reporting.

Through these new cash reporting capabilities, banks can send account statements and advices to corporate clients and correspondent banks. As the demand for real-time reporting among corporates and financial institutions continues to increase, WebSeries’ new functionality, which includes Nostro reporting, allows bank admin users to quickly and easily configure clients to receive statements and advices as needs and business requirements evolve.

“By leveraging industry standard messages, banks can quickly overcome many of the difficulties associated with efficient cash reporting. These new reporting capabilities are another example of Bottomline’s continuing commitment to helping banking customers support the needs of corporate clients through innovative features and functionality,” said Eric Campbell, Chief Technology Officer of Bottomline Technologies.

Federal Red Flags Rule Goes Into Effect August 1

Posted by Mark Brousseau

Beginning Aug. 1, 2009, hospitals and health care providers that extend any sort of credit to their customers - even something as simple as sending a bill at the end of the month - will need to have a documented, board-approved Red Flag compliance strategy in place to help combat medical identity theft.

Grant Thornton, LLP notes that the Red Flags Rule, a component of the Fair and Accurate Credit Transactions (FACT) Act signed into law in December 2003, requires that financial institutions and creditors in a number of industries implement a plan to identify, detect and respond to attempts to use stolen identity information.

"This rule is completely different from policies you have in place to protect sensitive information," says Randy Green, a principal in Grant Thornton LLP's Advisory Services group. "Instead, this regulation is designed to prevent thieves who have somehow acquired another person's identity - via medical records or otherwise - from using it to commit fraud. The rule requires you to identify all of the indicators that might tip you off to possible identity theft, implement appropriate preventive and detective controls, and react appropriately."

While the Rule has been in effect since November 2008, enforcement by the Federal Trade Commission (FTC) will begin Aug. 1 of this year. Initially, the FTC may assess retroactive penalties for violations, require additional compliance reporting from companies and obtain an injunctive compliance order. Further violations could result in a visit to federal district court and a fine of up to $16,000 per individual occurrence of identity theft.

"After Aug. 1, 2009, any occurrence of medical identity theft at your hospital or business exposes you to an FTC investigation," said Green. "We believe that enforcement of this rule will be complaint-driven, and given the staggering number of identity thefts, there will be no shortage of complaints."

"In summary, the Red Flags Rule is likely to become the standard of care that all hospitals and health care providers will need to provide to prevent medical identity theft," concluded Green. "Skipping red flags compliance will expose you to real regulatory, reputational and litigation risks."

How has your organization prepared for the Red Flags Rule?

CEO Executive Interview

Complying with New Medicare Reporting Requirements: Insurance CEO Art Meadows Shares Tips for Success

By Laurel Sanders, Optical Image Technology

Insurance companies offering liability coverage, workers compensation, and those that are self insured have struggled to prepare for the new Medicare reporting requirements since the federal mandates were announced. The legislation is expected to reduce Medicare costs by protecting its secondary payer status when eligible claimants can be covered by alternative sources. Unfortunately for insurers, the new laws will increase paperwork, but failing to act on them will carry stiff penalties.

In contrast with previous legislation, the burden of proof now rests on insurers to determine whether tort plaintiffs are eligible for Medicare coverage, and to report this information to the government. The additional tracking can be considerable for those with eligible claimants. Insurers with minimal or no electronic files face the greatest challenges.

The drive toward compliance recently picked up speed: registration opened in May, 2009 for Responsible Reporting Entities (RREs) to express their intent to comply with the electronic reporting requirements. Those who haven’t adjusted their plans, policies, and systems to enable timely reporting must take action soon. Federal delays in enacting the legislation have ended. Fines for non-compliance or late reporting will be severe.

I asked Art Meadows, President and CEO of Panhandle Farmers Mutual Insurance Company and a recognized leader in the insurance field, if he would share some tips to help other insurers make sure they’re able and ready to comply. He shared his expertise and advice during a recent interview:

Q: What are the issues associated with the new legislation?

A: There are a number of requirements for insurers. First, they must identify claimants who are eligible for Medicare benefits. Ideally, they periodically download a list of Medicare-eligible claimants from their digital file repository and operating system that shows all pending claims and upload it to the Medicare site, or they can create and post the lists manually. As it currently stands, quarterly reports will be due starting in 2010. All pending claims must be tracked and reported as long as each claim remains open. If settlements, awards, or judgments are made, these also must be reported.

For insurers, the new legislation is all about facilitating compliance, mitigating risk, and minimizing the corporate expense of managing pertinent information.

Q: What kind of penalties are there for late or omitted reports?

A: Penalties are stiff, amounting to $1,000 per claimant per day. Since reporting will be quarterly, it could take a long time for companies to discover if they’ve made a mistake or omission. Fines could easily amass into hundreds of thousands of dollars with a small number of omissions or late reports. My advice to insurers: don’t just count on employees remembering to file, even if your company is small and files seem manageable. You will need to have a system in place that ensures reporting is done on time and no claimant is missed.

Q: Which companies will be most affected by the new requirements?

A: Companies that will struggle most are those without technology and electronic records. Many successful companies fall into this category. Some don’t even have Internet access in their offices. Without electronic records, a system that ensures reporting dates are met, and some form of automated tracking of eligible claims, compliance will be difficult, time consuming, and potentially prone to error. This could prove to be very costly due to fines.

Companies that have automated operating systems with electronic files and handle many liability claims may encounter fewer problems than those that have a small number and handle them manually. It’s difficult to remember to provide reports if your company only processes a few each year, and even fewer involving Medicare-eligible recipients. Administrative and litigation delays mean cases can remain open for years. Required reporting on claimants can last a long time.

Q: There are numerous companies offering to take on the burden of Medicare reporting for a fee. What are your thoughts about this?

A: This may be a good—or even necessary—situation for some companies, particularly if they are resorting to manual posting of reports. However, entrusting reporting to any outside organization puts your company at risk. Remember: you are delegating the task, but the responsibility to comply is still ultimately yours. I’m not sure I would want to relinquish the responsibility to someone else and risk penalties that might be avoidable by doing my own reporting. If you are considering using an outside agency, consider the risks and proceed carefully.

Q: What is your company doing to ensure it’s prepared when the new rules take effect?

A: Fortunately, we purchased a robust electronic document management system in 2003 and have created electronic reports for several years. Additionally, we are involved with a vendor and five other regional companies in developing a new operating system that will track and report these claims automatically. With direct integration to the Medicare site, we will be able to upload our reports easily, avoiding the time-consuming battle of manual entry.

As a part of our monthly close-out process we already create a variety of reports, such as agent commission checks and A+ ISO reports. We plan to add the Medicare reports as part of that process.

Q: What steps should companies take to register, and what should they expect?

A: Eligible insurers—those that underwrite liability insurance—must register with the Centers for Medicare and Medicaid Services. They must indicate that they are a Responsible Reporting Entity (RRE) and provide notice of their intent to comply with the electronic reporting requirements. They will then receive a company identification number and login information for the CMS program. Companies that still handle processes manually will need to input their information manually on the CMS website.

Q: Is there any additional advice you would like to share with insurers that are struggling with the new rules?

A: If you haven’t begun planning yet, start now. Register well ahead of the September deadline. The information you need to get started can be found on the CMS website, and the major insurance associations also have helpful resources.

Consider ways to make compliance easier. If you’re still managing everything on paper, this is a good time to convert to electronic document management.

Put plans in place to ensure prompt filing. Otherwise, late fines could accumulate for months before you are aware of them. Mistakes are costly. If you already have a digital repository with your policies, claims, and supporting documentation, you can simplify compliance with electronic workflow, establishing rules to remind you of impending deadlines and enforce timely reporting. Lastly, work with your operating system vendor to put programming in place that will track and monitor claims that need to be reported to CMS.

Q: Clearly digital documents make reporting easier. How else do document management and enterprise content management software fit into the compliance picture?

A: Digital trails don’t lie, and they don’t err. They show every document that’s captured and every transaction that occurs. If information is stored electronically and indexed for search, it will be found every time. In an audit, digital tracking of claims, related correspondence, and supporting materials ensures transparency and accuracy. With proper digital storage, files can’t be overlooked.

Finally, if you’re ready to convert to electronic records, or want to replace your imaging system with a better solution, talk with insurers like me who have successfully converted to digital records and electronic reporting. It’s an investment of time and money, but the payback is relatively quick. The increase in productivity and the savings long-term are significant. With recent increases in legislation, and more laws to follow, there’s no better time to invest in your future.

Art Meadows is the President and CEO of Panhandle Farmers Mutual Insurance Company in West Virginia. A National Association of Mutual Insurance Companies (NAMIC) Professional Farm Mutual Manager of the Year (2007) and recipient of the Service Award (2006), he has been a member of the NAMIC Merit Society since 1999. Formerly an insurance agent, property inspector, claims adjuster, and commercial/personal lines underwriter, Art served on the Governor’s Task Force to support West Virginia Tort Reform in 2005 and was president of the West Virginia Association of Mutual Insurance Companies from 1996 to 2005. Art can be reached at art@phfm1898.com.

For information about Optical Image Technology and the DocFinity suite of integrated imaging, document management, and business process management/workflow software, visit www.docfinity.com.

Treasurers Moving to Electronic Banking

Posted by Mark Brousseau

An Aite Group, LLC study finds that many corporate treasurers are anticipating a move toward expanded use of electronic banking, with more than half of the treasurers surveyed saying they expect to see electronic payments expanded, and more than a third saying they expect to make greater use of online banking services.

A third also foresees a move to real-time balancing reporting.

What do you think? Post your comments below.