1. Building the Business Case for Compliance and e-Discovery James Watson, PhD, Doculabs

2. Agenda 1.Introduction 2.Challenges Clients Experience in Developing Business Cases 3.Cost and Benefit Categories 4.Interactive Examples 2

3. Slide © Doculabs, Inc. 2014 About Doculabs 3 Doculabs is a consulting firm that helps organizations develop sound technology strategies for content- and process-related applications. Our engagements focus on helping clients leverage their existing ECM investments on a broader enterprise basis through objective analysis and in-depth market knowledge. This approach is based on our fundamental belief that in order to protect a client’s long-term interest, technology advisors should not be implementers. Quick Facts Founded in 1993 Headquartered in Chicago Privately held Delivered more than 800 ECM engagements to more than 450 customers

4. Slide © Doculabs, Inc. 2014 How to Justify Investments? One-Time Costs Fines, Penalties, Judgments Frequency and magnitude difficult to measure Use of “scare tactics” – avoid the situation of competitor XYZ Operating Costs Internal Labor, System Costs (Storage Hardware), Services Vendors On-going and measurable Spread across many departments and budgets, so difficult to collect 4

5. Slide © Doculabs, Inc. 2014 Operating Costs – Two Primary Benefit Streams Storage Hardware Retain fewer documents and email, use less storage Easy to identify hardware expenses via purchase history and/or depreciation expenses within budget Often considered “hard” savings by management Discovery Labor Reduced discovery effort as less ESI must be culled and reviewed 3 rd party service providers: direct, controllable expense For internal labor: potentially less controllable 5

6. Slide © Doculabs, Inc. 2014 Direct vs. Indirect Expenses Direct Expenses Monies tied to acquiring equipment, services, internal labor If the equipment removed, services cancelled or labor terminated, the expense is reduced proportionately Little question about the purchase price or fees from a vendor Easy to quantify historic expenses and expects costs (via proposals) Typically reflects the “cash” leaving a firm Indirect (or allocated) Expenses Fully burdened cost, typically including allocations for items such as management overhead, labor benefits, infrastructure, facilities, etc. Can be as much as 200%-300% of direct costs Often these expenses cannot be eliminated, and are just re- allocated if the direct expense is reduced 6

7. Slide © Doculabs, Inc. 2014 Core Elements of a Business Case 7 Key Components of the Doculabs’ Business Case Modeling Framework

8. Slide © Doculabs, Inc. 2014 Storage Calculator 8

9. Slide © Doculabs, Inc. 2014 E-Discovery Calculator 9

10. Slide © Doculabs, Inc. 2014 Interactive Calculators The two interactive calculator samples shown by James at the conference can be downloaded from www.doculabs.com: www.doculabs.com – Both are embedded in whitepapers discussing the variables used and how the calculations work To use the interactive capabilities: – When you open the PDF files, you must “trust” the source to enable the interactivity – Click on the buttons to perform calculations, change the sliders to adjust variables, etc. Set up a briefing with a Doculabs consultant for a more detailed discussion 10

11. Slide © Doculabs, Inc. 2014 AssumptionsDescription Storage 500 terabytes of unstructured content contained in shared drives on Tier 1 storage 112.5 terabytes of email on Tier 1 storage 62.5 terabytes of unstructured content in SharePoint on Tier 1 storage Estimated 30% of email is duplicate content (7% of overall content) Estimated over-retained content eligible for immediate purging is 20% Growth Shared drive volume growth at 35% per year Email volume growth at 35% per year SharePoint volume growth at 35% per year Cost Tier 1 storage costs of $4.00 per gigabyte per year Tier 2 storage costs of $1.00 per gigabyte per year Tier 3 storage costs of $0.25 per gigabyte per year Storage costs decline by 10% per year over the next 3 years Energy Cost per kilowatt hour for storage power is $.09 (national average) 1.55 lbs. of CO2 emissions per kilowatt hour 11 Business Case Development – Storage

12. Slide © Doculabs, Inc. 2014 Business Case Development – e-Discovery VariableDescription Type of Event Standard Event – The most common type of litigation; e.g. small HR claims and/or other minor legal matters Rigorous Event – Less frequent than standard events; e.g. contractual, or intellectual property disputes Exhaustive Event – The least frequent yet the most costly type of litigation; e.g. class action lawsuits or U.S. Department of Justice actions Categories and Numbers of Employees Involved Tier 1 – Employees involved in the matter and likely to possess unique and relevant information Tier 2 – Employees involved in the matter but likely to possess only redundant or non-relevant information Tier 3 – employees involved in some activities related to the matter, but highly unlikely to possess any relevant information Data Storage per Employee Average email storage per employee (MB) Average shared drive storage per employee (MB) Average local storage per employee (MB) Processing Costs – External Search Provider Processing cost per GB Processing cost per email box Costs of FTEs Involved in Discovery Effort Information Technology Internal Legal Support Internal Legal External Legal Third-party Review 12

13. Slide © Doculabs, Inc. 2014 Summary Financial Metrics Current Costs (3 yrs.) Future Costs (3 yrs.) InvestmentSavings (3 yrs.) Storage via Archival $11.5$7.3$2.1*$4.2 Discovery$19.5$10.6$2.1 *$4.7 Total$31.0$17.9$4.2$8.9 13 *The $4.2 million of investment shown in the e-Discovery calculator was split between the two benefit streams

14. Thank You Doculabs, Inc. (312) 433-7793 info@doculabs.com Contact: James Watson, PhD 312-881-1620 jwatson@doculabs.com