What are the risk and costs of not having a business continuity and disaster recovery?
According to the Disaster Recovery Preparedness Council, nearly three-quarters of organizations worldwide are not properly protecting their data. Considering the rising number of cyber threats every business is facing today it is shocking that most of them are not well prepared for the emergency events that can affect their business. The possible cost of not having a BC/DR program is extremely grave.
If your business is not implementing the plans, you are facing serious business continuity risks, including the following:
1) BUSINESS FAILURE
When the business cannot recover from an incident it could lead to the failure of the overall company. In fact, up to 75 percent of businesses will fail within three years after an event if they have no disaster recovery plan prepared. The opposite for the companies that implemented a business continuity plan, helping them to recover faster and more effectively following the emergency.
2) FINANCIAL LOSS
Financial damage can be very costly and damaging to your brand. The average cost of a business interruption varies from $5.8 million due to fire or explosion and $4.4 million due to a storm. Companies that have no disaster recovery and business continuity plans can suffer a great financial loss, lost on product and public relations. Server downtime, data breaches, natural disasters are just a few events that could potentially damage your business. BC/DR is essential for your business to prevent the loss and keep your business operations at normal. Because of the general lack of proactive monitoring and remote site management, companies have lost approximately $5 million from various outages.
3) PRODUCTION DOWNTIME
2015 study shows, that about 78 percent of reported companies experienced an outage at business-critical applications on some point- 28 percent of which lost the connection to their data centers for more than a week. This kind of business-impacting incident has a critical destroying effect throughout an organization, immobilizing the productivity and operations of the business. The most dangerous part of the incidents is its fast-growing consequences, including frozen sales, suffering customer service, etc.
4) TARNISHED BRAND REPUTATION
The way the company handles the disaster incident can impact the way on how their customers and the public will view the organization in the future. People may perceive the company as insecure and untrustworthy after the data breach. In the era of social media, there are a million ways in which crises can harm your brand and public perception.
5) DATA LOSS
Data is the most valuable part of mission-critical operation. Losing a company’s data will stop a business from operating and the outcome is devastating. The snowball effect from which many businesses will not be able to recover.
6) LOSS OF CLIENTS
Your clients will care if you are faced with data loss. They want to know when you will recover the normal operations and they don’t want to hear that you would have to rebuild the data from scratch. Business that is not prepared to bring back the service for its clients as fast as possible will most likely lose them. If the customer believes you are not equipped or you have no disaster recovery plan, they will begin to question your preparedness to handle his/her business.
Some of non-surprising facts were brought up by The Business Journals.
Imation found that 30 percent of businesses surveyed had no DRP, and nearly 40 percent indicated they have a plan yet don’t test or update it yearly.
IBM surveyed corporate recovery managers and found that only 8 percent of Internet businesses are prepared for disaster.
Information Age found that major systems downtime can cost companies upwards of $90,000 per hour.
According to Aveco, 20 percent of companies will suffer a fire, flood, power failures, terrorism or hardware or software disaster. Of those without a DRP:
- 80 percent will fail in just over a year.
- 43 percent will not even re-open.
- 93 percent that experience a significant data loss are out of business within five years according to the U.S. Bureau of Labor.
If you don’t want to be in the list above, you just need to get a Managed IT Support plan from Stepinlogic IT Support Company and have the best security for your business!
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