Whether your business is large or small, there are natural and man-made disasters that can seriously disrupt the day-to-day workings of your company, often without warning. While such disasters may be difficult to predict or prevent, they can and should be planned for.
Did You Know?
- 1MB of data is worth approx. $11,200 (1)
- Re-building just 20MB of lost data could cost more than $19,000 and nearly three weeks to re-build (2,5)
- A leaked record may cost you $200 to rectify (3)
- Retrieval of data from a crashed hard drive can cost you a fortune, and there is NO GUARANTEE of success! (1)
- Your business data goes hand-in-hand with your business operations. The loss of such data, or even its temporary inaccessibility, may threaten your hard-earned competitive position.
- Companies without proactive backup and recovery policies are likely to be OUT OF BUSINESS within 2 years of a major disaster (4)
- Loss of business data may ruin your company’s reputation, or may lead to expensive litigation
- Most importantly, it interrupts your business continuity.
|1 -||David M. Smith, PhD. "The importance of investing in that ounce of prevention.” The Cost of Lost Data. 2003.|
|2 -||Recent study from Ontrack|
|3 -||Data Breach Study,Oct. 2005 Ponemon Institute|
|4 -||Study by the National Archives and Records Administration|
Data loss and computer downtime have serious implications for business. Damage to computers and other hardware can put a stop to the running of your company. Lost data can lead to costly downtime for sales and marketing and reduced customer service while customer databases are restored or rebuilt. Lost financial data can lead to lost contracts and stock value, or worse. The loss of important and sensitive data could mean the end of your business altogether - if this data has been lost permanently.
Of course, the value of lost data varies depending on their application, as well as the potential value that can be captured from use of the data. In addition, there is a cost associated with recovering the data, as well as lost productivity due to computer downtime.The Cost of a Data Loss Incident
An episode of severe data loss will result in one of two outcomes: either the data are recoverable with the assistance of a technical support person, or the data are permanently lost and must be rekeyed. A calculation of the average cost of each data loss incident must take into account both possibilities. The ability to recover data depends on the cause of the data loss episode. The permanent loss or theft of a laptop whose data have no tape backup will result in permanently lost data. In addition, fire or flood damage can also make the possibility of data recovery very remote. For other causes of data loss, data recovery specialists are becoming more adept at restoring inaccessible data.
The first cost of data recovery to be considered is that associated with hiring a computer support specialist in the recovery effort. If there is a computer support specialist employed within the company, both the number of hours needed to recover the data and the cost of employing this individual must be taken into account. The time needed to recover data may vary greatly. If a data backup exists and is readily accessible, the time needed to recover data may be very short. At the other end of the spectrum, if the data are corrupted on the hard drive, several days may be required to retrieve the data.
During the time in which the attempt to recover data is underway, an individual is unable to access his or her PC, thereby reducing productivity, which in turn impacts company sales and profitability. This opportunity cost - lost productivity due to computer downtime-impacts a company's income statement just as do other more common and explicit costs. Lost productivity represents missed opportunities for income generation.
The final cost to be accounted for in a data loss episode is the value of the lost data if the data cannot be retrieved. This outcome occurs in approximately 17 percent of data loss incidents. The value of the lost data varies widely depending on the incident and, most critically, on the amount of data lost. In some cases the data may be re-keyed in a short period of time, a result that would translate to a relatively low cost of the lost data. In other cases, the value of the lost data may take hundreds of man-hours over several weeks to recover or reconstruct. Such prolonged effort could cost a company thousands, even potentially millions, of dollars. Although it is difficult to precisely measure the intrinsic value of data, and the value of different types of data varies, several sources in the computer literature suggest that the value of 100 megabytes of data is valued at approximately $1 million.
In addition to highlighting the significant costs involved in re-keying data, these figures reflect the importance that data play in creating value for businesses. Once data are lost, those value-creating opportunities are also lost. These losses are multiplied in a networked environment. A survey conducted in 2001 by Contingency Planning Research reports that the majority of companies estimate the average cost of computer network downtime to exceed $50,000 an hour, and for some companies that figure rises to over $1,000,000 per hour.
What causes data loss?
Statistics on data loss are sparse. Data loss incidents can be hardware- or software-related.
The following statistics were gathered from various sources:
- 6% of all PCs will suffer an episode of data loss in any given year. (The Cost Of Lost Data, David M. Smith)
- 30% of all businesses that have a major fire go out of business within a year. 70% fail within five years. (Home Office Computing Magazine)
- 31% of PC users have lost all of their files due to events beyond their control.
- 34% of companies fail to test their tape backups, and of those that do, 77% have found tape back-up failures.
- 60% of companies that lose their data will shut down within 6 months of the disaster.
- 93% of companies that lost their data center for 10 days or more due to a disaster filed for bankruptcy within one year of the disaster. 50% of businesses that found themselves without data management for this same time period filed for bankruptcy immediately. (National Archives & Records Administration in Washington)
- Companies that aren't able to resume operations within ten days (of a disaster hit) are not likely to survive. (Strategic Research Institute)
The cost of lost data from computers is substantial. Businesses must be proactive in protecting this important resource! Are you successfully managing your data loss prevention tools?
Advanced Computer Services can help in selecting the right tool for your business! We can help you to put a disaster recovery plan into place for your computers and networks, ensuring that if a crisis does occur your business can get back on its feet as quickly as possible.