How to avoid tax audit disasters with print-and-archive

Big Data, Data Archiving, Data Management, Print and Archive Comments Off on How to avoid tax audit disasters with print-and-archive

Data Today and Data Then

The other day I was talking to a major distributor who had just gone through a tax audit nightmare. The taxes in question vary based on the location to which the goods were shipped. What should have been a straightforward audit turned into a complex, expensive process because in many cases the customer shipping addresses had changed over time, and the distributor’s ERP system, like most such systems, kept no historical records of those old addresses, so they could not guarantee that the invoices they generated for past shipments showed the actual shipping location.

Like most distributors and retailers, their shipping process is highly streamlined. They receive an order, generate the invoice and shipping label, and ship the product through their ERP system. When customers call in address changes, the new address is entered, from that point, every time you print any old invoice, prints with the new address. The old address is literally wiped from the distributor’s records.

This all works fine and ensures that the right invoices and products are shipped to the right location. But when the auditors arrived they quickly discovered that they could not be sure of where anything had been shipped to in past years. The problem is that many taxes, including U.S. sales tax and European VATs, vary by geographic region. But generating a duplicate invoice for a transaction from a year ago would show the customer’s present address, not necessarily the address last year. Eventually they had to restore data from old backup tapes to discover the old shipping addresses of customers. What should have been a fairly straightforward audit turned into an expensive mess.

The problem is that everything – customer name, address, VAT or U.S. sales tax registration number, all can change at any time. Few ERP systems capture changes to their master records. An invoice is a legal document that is important not just in tax audits but in lawsuits and other legal actions. It should be immutable, but in fact companies that depend on their ERP will often be unable to guarantee that a copy of a historic invoice is correct.

How can you solve this problem. The answer is print and archive, when you generate an invoice, you print and archive a digital copy with the Solix virtual printer – Solix Big Data Suite. This creates an immutable copy of the original invoice that is accessible and acceptable in an audit or other legal action. This can make your life much easier when the tax man calls.

To learn about the print stream archive and our Solix Big Data solution, please contact us.

Customer Panel Highlights: Why Our Customers are so Loyal

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I always like to talk with pride, why our customers are very loyal to Solix. It’s one thing to talk about our technology and high customer satisfaction, it’s another to hear it directly from customers.

Recently we conducted a group webinar with three of our customers from different industries to discuss best practices for application retirement. The full recording of the hour-long live discussion is available here

The three panel members were:

Mark Parmet, Senior Director, Finance Solutions, Avery Dennison Corp.,
Gary Frederick, Global Vice President of Application Services,
   Stanley Black & Decker, and,
Richard Ilnicki, UK Team Leader, Santander Group.

All three were targeting the same problem, retire legacy applications and reduce costs while meeting the compliance regulations: They needed to retire multiple obsolescent applications and aging hardware, while maintaining access to the data, including reports. Santander had to meet stringent compliance requirements including an absolute guarantee that the data was completely unchanged by the retirement. And it had the largest number of potential retirements because it grows mainly by acquisition. Every independent bank it buys runs on its own infrastructure, which has to be integrated into Santander’s IT environment, which always includes retiring non-standard applications.

All three needed a solution that is independent of applications, operating system, and database platform. They needed a solution that is proven and scalable for all their applications. All three started by researching the field, including talking with Gartner and other industry analysts and looked at several possible solutions including build vs buy. Mr. Ilnicki in particular said his team at Santander looked closely at a large field of vendors, analyzing the costs and other business factors involved in each before arriving at a final list.

Mr. Frederick said that after consulting with several sources his team at Stanley, Black & Decker narrowed the list of candidates to four or five, including Solix. Some offered services only, some provided services and software, but none of the others provided as robust an overall solution as Solix. Mr. Parmet said Solix integrated technology and services, provided the most cost-effective solution. Santander narrowed the choices to Solix and one other vendor and conducted a proof-of-concept with both. “Ultimately Solix provided the best value for the money in functionality and cost.”

One of the largest challenges in any technology change is selling it to the end-users, who generally do not like changes in how they are used to working. Each of the panelists, however reported that the move went very smoothly. Solix sold itself both to the IT staff and to the business users.

Today all three customers have finished their initial retirements, which in two cases involved multiple applications and at Avery Dennison involved the retirement of its financial system. All are continuing to use Solix solution for their ongoing application retirement.

If you are looking for either Data Archiving or an Application retirement solution, to clean aging, seldom-accessed data from operational databases, to improve performance, cut costs, and possibly support a move from spinning disk to flash storage, I urge you to watch the recording of this panel and learn why our customers believe Solix is the best solution.

Best Practices for Application Archiving

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The tremendous growth in volumes of data – both traditional structured data and new data types such as Internet-of-Things (IoT) – and the advent of in-memory database technologies like SAP’s HANA and NAND flash storage that are faster but more expensive – has made data archiving mandatory. Companies simply cannot afford to operate as they once did, allowing years of data, much of it seldom used, to accumulate in single-tier databases. The old data clogs systems, hurting performance, and, when that database is running on flash or in-memory, it also becomes prohibitively expensive.

For too long, organizations have debated the best way to deal with the lifecycle of application data. Organizations want to engage in true Information Lifecycle Management while ensuring governance, data security, and operational efficiency. While unstructured data archiving is relatively simple as mostly it is based on date stamp, structured data archiving is complex and multiple methods have been used. Here is what we recommend to our customers:

0-3 years of Application Data – Inline – ILM Partitioning

A great deal of research shows that data that is more than about one year old is essentially inactive, accessed only occasionally for business analysis and compliance audits. Some data, such as telephone call records in telecom industry, becomes inactive even sooner. This data needs to be moved off the tier 0 in-memory or tier 1 NAND flash storage to a lower, less expensive SATA disk tier. The original application, however, still needs access for business analysis, tax reporting, and compliance auditing. The answer is to partition the database, basically creating a separate instance of the data on lower tier media that looks to the application like part of the core database. This trick can improve performance of transactional systems tremendously, allow the business to use its high-cost, solid-state storage for only the most valuable data, and simultaneously support business analysis and auditing of all the data in the original application.

Solix can assist an organization’s IT department with creating partitions that not only can improve application performance and save backup and recovery time but make sense in the larger lifecycle of organizational data. However, this partitioned data continues to reside in the database and does not reduce the load on costly, Tier 1 servers and the infrastructure and utilities needed for them. Partitioning alone is not Information Lifetime Management (ILM). When utilized in the context of business rules created by the organization, it becomes an essential part of the ILM framework. Also, applications such as Oracle E-Business Suite, does not support this method on application modules that are already partitioned by the application.

3-7 years of Application Data – Near line – Database Archiving

For data that is older, three to seven years, Solix Database archiving offers the next step in the ILM framework. Archiving can remove massive amounts of data from the servers, yet the data remains accessible to the business user from the native application. This is done while ensuring data integrity and information governance of the data. Database Archiving helps in improving application performance by reducing the amount of production data that applications must process. This also means faster backups, upgrades, and disaster recovery and reduced cloning time. For many organizations, operational costs, including utilities and the ability to reallocate staff time to more mission-critical operations, will also benefit. The challenge for this method is application upgrades as archive data also needs to be upgraded and kept in sync with the native application.

7+ years of Application Data – Offline – Big Data Archiving

For data older than seven years, Solix Enterprise Archiving allows data to detach from the original application. Built on Apache Hadoop, Solix Enterprise Archiving is highly scalable and utilizes commodity hardware, reducing the need for Tier 1 storage. It is an inexpensive, scale-out storage option for old data that can save on licensing fees and other expenses. This data is still searchable and query-able with user-friendly dashboards, ensuring governance, security, and business needs are met at the highest levels. The main advantage, this creates an Enterprise archive platform and with Enterprise Data Lake, lays the foundation for Next generation enhanced analytics.

Each of the above methods, has implications on:

  • Application Upgrade,
  • Application Performance,
  • De-Archive,
  • Cost,
  • Reports Search,
  • Backup & DR,
  • Operational Efficiency,
  • Application Testing, and,
  • Meeting Regulatory Compliance Requirements.

Solix is the only vendor today providing support for all the above three methods with our Solix EDMS product. We believe Enterprises should embrace this three tier method for all their application for optimized performance, lower costs and enhanced analytics.

Tire Gauge … Solix EDMS

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Have you ever tried riding a bicycle with under-inflated tires? It’s hard for the human engine to push it ahead. Pump it up; it seems like you’re gliding on air. Well the same is true for your car, and we are wasting so much fuel as a nation running cars with underinflated tires and badly tuned engines that President Obama talked about it during the election campaign.

How bad is this problem? In 2005 students at Carnegie Mellon University checked the tire pressure on 81 cars parked on campus. They only found one vehicle with properly inflated tires. The rest were under-inflated by an average of 20%. At that time gasoline was $3 per gallon, close to the price today, and the students calculated that each of those 80 drivers would save $432 per year based on typical driving just by inflating their tires to the manufacturer’s recommended pressure and this does not include the decrease in tire wear and resulting savings in fewer blowouts.

According to, the gas savings for having a properly tuned car is 16 cents per gallon. The savings from properly inflated tires varies, but the site says 1% of fuel economy is lost for every 2 psi of under inflation. Fixing a car that is noticeably out of tune or has failed an emissions test can improve its gas mileage by an average of 4%, although results vary based on the kind of repair and how well it is done. National Highway Traffic Safety Administration estimates that at least a quarter of drivers are cruising around on under-inflated tires. The Rubber Manufacturers Association, Auto Club, California Highway Patrol and Yokohama Tire Company used those statistics, along with Department of Transportation and Automobile Association of America data, to extrapolate that 2.8-billion gallons of gas are lost every year due to under-inflation of tires.

What an inexpensive tire gauge can do for your wallet, the world economy and the environment, Solix EDMS in your data center can do the same. Right Tire pressure or right tiered data in your data center, both yield huge returns. Database Archiving and Application Retirement can decrease the number of servers and spinning disks on the floor, saving valuable space and cutting energy and cooling use, and therefore cost and carbon emissions. And by managing the size of active data it can delay the addition or upgrade of storage servers and disks, saving capital funds, which have become scarce in this economy.

The U.S. Congress is working now on a major clean energy legislation. While the focus of debate and news coverage has been on Clean Energy and creation of jobs. The motivation, of course, is the environment and global warming. Well, if you are looking to do something that benefits yourself, country and the world:

  • Buy a tire gauge for your vehicle and use it at the start of every month
  • Implement Solix EDMS in your data center

© Solix Technologies, Inc.
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