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Calculating The Cost OF Data Loss To Your Business |
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Data loss emergencies can hit any business without any prior indication of a potential problem. Sometimes data loss
issues can be nothing more than a business hiccup and not to much data is lost , or the lost data can quickly be
reworked to get the situation back to normal. Conversely though large data loss scenarios can have an devastating
effect on a business and the more employees they have, or the more reliant they are on their IT infrastructure,
then the bigger the problem.
A typical example of a large data problem would be perhaps a failed disk or raid array on a Microsoft exchange
server. E-mail is becoming the life blood of many organisations and without it effective client and supplier
communications can quite literally cease.
The effect of a data loss will affect companies in different degrees so a larger corporation may suffer from a
great cost due to the loss but a smaller company may struggle to survive the effects or may simply not have the
cash flow in place to cope with a potentially very expensive recovery.
With the ever increasing reliance on IT most business owners will have started to become reasonably educated about
the need for a disaster recovery plan for
their business, and plans may have already been put in place but this does not make the system infallible as if the
plan has note yet been tested, or has not been implemented which often happens if a business waits for suitable
window if a server needs upgrading for example, then the company will still be open to risk
So what is the cost of a data loss disaster? This is a question often asked by smaller business as they need to
establish a sensible return on investment in order to justify the cost of setting up a plan. Unfortunately the
return of investment is a negative one in most cases, that is unless there is a data emergency then there will be
no return on investment. There will on the other side of the coin though be a large risk reduction. A good measure
that could be used for a sales organisation though could be loss of potential sales.
This can give very clear indicators as to potential revenue loss versus business down time and business continuity
investment. For many organisations the loss of a days sales could have a very impact on cash flow and for larger
companies potential loss could have an even greater effect.
Cost of lost sales is only one of the aspects that can be measured but other costs need to be taken into
consideration as well many of which can be swept under the table if not factored. These could include the actual
cost of employing a London data recovery
company in the first place or even punitive fines for missing contractual deadlines depending on what
industry your business is in.
As well as measurable costs a company also need to factor intangibles into any return on investment or risk
reduction calculation. Typical factors here could include activities such as re-population of customer CRM systems,
additional management costs and business costs of running temporary as opposed to automated IT systems etc.
Another crucial factor that needs to be taken into account during any data emergency is the sheer value of your
company data, it is often extremely tempting to follow the path of least resistance and least cost by asking you IT
department to try and rectify the situation, unfortunately history has shown that the chances of corrupting data
even further are very high unless your IT department employs a data or raid recovery specialist.
Also if you are employing the services of a raid data
recovery company you need to check their potential methodology and ensure they will not work on the
actual donor disks as it is crucial to keep the main data source intact at all times.
Specialist business continuity providers will have strict protocols in place to ensure the absolute integrity of
the source data. Working on the original data hard drives should simply not be an option because if the file
structure or data is compromised in any way then your business could experience total data loss.
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