What is the true cost of lost data to business?

What is the true cost of lost data to business?

What is the true cost of lost data to business?

There is a certain sweat inducing twist in the stomach that is reserved solely for the moment any individual realises they have just lost digital data to…well, to wherever that seemingly priceless information disappears after the combustion of a hard drive or a misplaced, absent minded tap of the delete key. Abby Hardoon, founder and CEO of Daily.co.uk explains how to keep your data safe and secure.

It wouldn’t be overreaching to say that all computer users will have had their own experiences with data loss at some time or other. In many personal cases, the loss is relatively inconsequential and can be reinstated with a few minutes of aggravated re-typing but, with the amount of business data being stored digitally rising to record levels and our reliance on that data becoming critical, mass data loss can quite easily go beyond gut wrenching to business ending.

According to an industry study by The Diffusion Group, who surveyed small business organisations, 60 percent of companies that lose their data close down within six months of the disaster and a staggering 72 percent of businesses that suffer major data loss disappear within 24 months.

The results of a similar study carried out by the British Chambers of Commerce found that 93 percent of businesses that suffer data loss for more than 10 days file for bankruptcy within one year, 50 percent immediately.

Data loss within a business can, of course, be caused by several factors, the main one remaining hardware malfunction. There are not many certainties in life but one is that disk and tape drives will eventually fail. In fact, a hard drive dies every 15 seconds. Other main causes of data loss are employee negligence including misplacing of USB sticks and laptops, software corruption, viruses, natural disasters and, increasingly, hacking.

So what are the true costs of data loss?

According to new research recently compiled for Symantec in conjunction with the Ponemon Institute, UK firms will be forced to pay an average of £1.9 million a year, or £71 per record, for every instance of data loss they experience and this has increased year-on-year for the third year running.

The study confirmed that in 2010, the most expensive data loss brought about costs of £6.2 million, a huge rise on the £3.9 million recorded the year before. These costs included the direct fallout after the data loss, such as the clearing up process and replacement of equipment, as well as investigations into the incident and the efforts to rebuild customer trust.

Businesses backing up

It seems though that there remains a very definite void between the realities of data loss and organisations employing solutions to counter the problem. According to a study carried out by global market intelligence firm IDC, 40 percent of SMEs don’t back up their data at all and when they do 40-50 percent of those backups are not fully recoverable. They also found that 60 percent of all business data is held on PC desktops and laptops and therefore commonly won’t get backed up as part of more regularly adopted company server backup schedule.

The solutions?

In a world of advancing online storage solutions in which data can be backed up via the internet to offsite secure online storage centres, protecting data in reality, is easier than ever. No longer is there a need for tape or disc based backups which work with fragile hardware as well as requiring hardy vigilance from the operator to make sure the tapes or discs are regularly changed. These days, data can be seamlessly delivered via the internet to these highly secure servers to be held until, god forbid, the day comes when it’s required.

Sounds perfect, but surprisingly, even now, adoption rates of this technology are low - from big businesses to small. Research has shown that business owners are hesitant to try these new technologies because they don’t want to stray from familiar systems or invest in new ones.

This is surprising, especially because, according to a National Small Business Association survey released last year, about half of business owners believe the cost of upgrading technology and the cost of maintaining technology are two of the greatest technological challenges they face. By switching to the online backup, business owners wouldn’t need to be responsible for upgrading and maintaining the storage systems – their hosting provider would.

It seemingly then still comes down to a mind-set. On the face of it, despite the frightening facts and figures, there remains, for far too many businesses, a lack of proactivity in their approach to properly and efficiently protecting their company data. This may seem surprising until you remember that all businesses both large and small are ultimately run by individuals and as individuals we often, unfortunately, won’t fully appreciate the need for protection until the split second after the sweat-inducing twist in the stomach.

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