This paper describes best practices in classifying data from the perspective of information lifecycle management (ILM). It is intended as a high-level introduction to issues and considerations for IT organizations that are considering implementation of a more formal approach to data clasification. The best practices data classification approach outlined in this paper will clarify the linkage of business processes to data, helping align IT with business priorities, and will help delineate the worth of information by providing clear categories of information value. Data classification can reap significant business rewards and can enable a business to be more agile and competitive.