Cost of Disaster Preparedness

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A just-released disaster preparedness survey by Symantec paints a less than encouraging disaster preparedness picture of small and midsize businesses (SMB). As it turns out, half of those surveyed don't have a disaster preparedness plan and almost 15 percent have no plans to create one. Disaster preparedness in this case focuses on data and systems protection and recovery.

The study surveyed over 1,200 businesses worldwide. Small businesses are those with fewer than 100 employees; midsize businesses range from 100 to 999 employees.

Half the respondents have a plan, up slightly from 47 percent last year. Of those who don't have a plan, 52 percent didn't think computer systems were critical to the business. How long do you think finance would function without its systems? How long would you go without email?

Of those respondents, 41 percent said that it never occurred to them to put together a plan, and 40 percent said that disaster preparedness was not a priority.

Not a priority! Just in the past few weeks, the South was lashed with crippling snow and ice storms. New York City was shut down by a snowstorm, and California was hit with massive floods, mudslides, and snow. A report just this week noted that 49 of 50 U.S. states had snow coverage. The one state that didn't is Florida, and it regularly gets whacked with devastating hurricanes.

Disaster preparedness is about protecting the organization's data and systems so the organization can continue to function. It also is referred to as disaster recovery or business continuity. Maybe the thing confusing these managers is the term "disaster," which conjures up thoughts of earthquakes, which, granted, are not frequent enough to be a big concern in most places.

A disaster, however, is anything that can bring down your systems or make your data inaccessible. A careless employee or an incompetent contractor can trigger as bad a disaster as a blizzard, tornado, or hurricane in terms of bringing down your data and systems for the full count, however many hours, days, or weeks that might be.

The Symantec study found that SMBs experienced a median of six outages in the past year. The top reasons for the downtime included cyber attacks (even a software virus), power outages, employee errors, and upgrades, with each occurring a median of once per company in the past year.

Downtime hurts. Symantec found that downtime costs SMBs a median of $12,500 per day. For small businesses, the median cost was $3,000 per day, while midsize businesses experienced a median cost of $23,000 per day.

Your customers also are impacted by your downtime, as Symantec surveyed customers, too. SMB customers reported that outages cost them $10,000 per day, and 29 percent said that they lost some or a lot of data as a result of disasters impacting their SMB vendors. Downtime also causes customers to drop a supplier, with 54 percent reporting having switched SMB vendors due to unreliable systems, a 12 percent increase compared with last year's survey.

Disaster preparedness shouldn't be hard or expensive to do anymore. Between cloud-based services and low-cost, easy-to-deploy appliances, any business can execute disaster preparedness plans. wiredFINANCE will look at some of those solutions in coming weeks. ###

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