Adopting a loose or non-existing data backup policy can have a devastating consequences on your business. This blog post will make sure you are aware of the real cost of data loss, be it as a result of a security incident, natural disaster or some other reason.
A lot of users and surprisingly enough, IT service providers, have very laxed data backup policies. They’ll back up when they remember or ignore backups altogether because they haven’t quite processed the consequences of data loss. But taking this approach is similar to playing a Russian roulette. At Wendego IT Solutions we make sure our customers are aware of the very real costs of data loss, be it as a result of a security incident, natural disaster or some other reason.
A 2014 study by Vanson Bourne for EMC estimated the worldwide total of data loss at $1.7 trillion – not too far from the gross national product of Canada, currently estimated at $1.83 trillion.
These numbers are so massive that small businesses gets overwhelmed by them rather than truly grasping them. So let us translate these into a more measurable size instead: The average cost of a lost or stolen record increased 12 percent in 2015 to $154 from the previous year, according to a study conducted by Ponemon Institute for IBM. The average per-incident cost rose 23 percent to $3.8 million.
A small business that experiences a significant data loss may never recover, and indeed the U.S. Small Business Administration (SBA) estimates that 25 percent of businesses survive a major disaster.
Going out of business is the ultimate price for data loss, but even businesses that survive suffer serious consequences, especially if the loss occurs as a result of a security incident such as recent the high-profile cases involving Target, Sony, Anthem and Home Depot.
The costs associated with remediation, lost profits and productivity aren’t the only consequences of data loss. A serious security incident can deliver a huge damage in reputation that can erode the trust of customers who may take their business to a competitor.
Legal consequences are also likely in many cases. There’s always the chance of lawsuits by customers, partners and other interested parties if the loss or theft of data affects them in some way.
Beyond that, a company that loses private customer or employee data and can’t recover it from a backup may be violating some sort of regulation. Regulations at the state and federal level address the need for replicating and safely storing certain types of data such as medical records, financial data, human resources files and payment card information.
Failure to have a data backup and recovery strategy in place can cost businesses dearly. At Wendego IT solutions, we constantly strive to educate our customers about the importance of a good data backup and recovery strategy. Because sometime the difference between a good strategy and a non-existing one is going out of business.