The Economics of Business Continuity

In the daily rush of “important” business functions like sales, accounting and other hard-dollar activities, it’s easy for business owners to cross their fingers and dismiss disaster recovery and business continuity concerns, figuring that the odds are in their favor. After all, the Small Business Administration reports that only 25% of businesses that experience a disaster fail to reopen. Surely you will not be one of them, right?

The problem with such reasoning is that in today’s data-dependent business environment, “business continuity” doesn't mean keeping your business open after a disaster. True business continuity from a technology perspective means keeping your business and its digital assets functioning and available even during a minor IT disruption, and these are more frequent than you might think.

A 2013 Ponemon Institute survey of nearly 2,400 business continuity and IT professionals found that almost 70% of them anticipate a minor IT disruption (fewer than 20 minutes) over the next 24 months. (Approximately 23% of them expect to experience a major disruption―seven hours or more.)

Do you consider an outage of less than 20 minutes to be acceptable? Before you say yes, consider these scenarios. What if that outage happens when your sales manager is developing the most important proposal in your company’s history, and the file he or she has been working on for days is irretrievably lost?

What if your dependable, weekly backup solution did not happen to capture any of that work? Moreover, what if the IT outage is not minor, but rather, it involves a server crash or some other event that takes more than 20 minutes to resolve?

Do you have a plan to be up and running within minutes of the event, no matter what, perhaps with the help of cloud computing? Could you or your Managed IT Services provider restore that lost file―the one your newest, biggest customer is expecting by day’s end?

This may sound like an unlikely scenario, but it happens every day. In fact, unless you have redundant, cloud-based systems in place, your team is likely experiencing outages and data losses of which you are not even aware.

For example, are you aware of every occurrence where an employee experiences a file corruption―or accidentally deletes a file? Often, workers do not report these losses if they can hide them from their superiors, fearing retribution for careless behavior. Instead, time is wasted recreating the file, which drains productivity and erodes the bottom line.

In reality, the biggest “cost” of IT outages is not the time to diagnose problems, get systems back online, or purchase new hardware. The results gleaned from those surveyed IT professionals (whose jobs rely on having a good handle on this issue) found 75% of the costs from an IT outage, cyber attack or other IT-related problem are business-related―from productivity drains to loss of customer confidence, to cancelled or abandoned sales.

Understanding the true financial consequences of an IT disruption is vital to making meaningful risk calculations. We hope this information will help you do just that.