As of early October, the US has already experienced 11 weather disaster events in 2018 alone. These events caused losses of over $1 billion in damages each.
And then Hurricane Michael, a Category 4 storm, made landfall in the southeastern United States. Losses attributed to the storm, currently stand at:
- 50 deaths, 35 in the US and 15 in Central America.
- Insurance losses, in the US, are estimated between $8 – 11 billion.
- Losses to agriculture and timber exceeded $3.7 billion.
And it’s not over yet as the hurricane season is still in full swing, and is expected to come to an end in late November.
With the continued threat of economic disruption due to extreme weather events, it’s no surprise that the World Economic Forum’s 2018 Global Risks Report has classified weather events, like Hurricane Michael as the most prominent risk facing businesses.
But it’s not only natural disasters that can wreak havoc on your organization. There is also the threat of fraud, system failures, cyber attacks, human negligence and acts of terrorism.
In 2017, companies were primarily affected by three major threats:
- Cyber attacks: On average, a cyber breach costs over $1 million to rectify.
Can your business afford that?
In 2017’s Wannacry ransomware attack, hackers gained control of over 200,000 computers in 150 countries. They targeted businesses that were using outdated software, and thus were able to hold them to ransom for huge sums of money. Leading consumer credit reporting agency, Equifax took three months to discover a breach in their systems. By then, the firm had compromised the sensitive data of over 140 million consumers.
2. Unplanned downtime: In February 2017, hundreds of sites went offline when an Amazon Web Services (AWS) employee made a mistake while debugging a web hosting server. Studies show that employee error or negligence is responsible for 19% of all unplanned downtime.
A whopping 45% of all unplanned downtime can be attributed to hardware failures, and outages can cost businesses at least $20, 000 for every day of downtime. One must also consider the attendant costs of system downtime including its impact on employee productivity, missed sales, penalties incurred etc.
Can your business afford downtime?
3. Data Loss: With the rise of big data and cloud computing, it’s becoming increasingly challenging for businesses to protect their data. Research by Security Week, shows that the total volume of data loss has increased more than 400 % over the past few years. With the average cost of a breach costing $ 7 million (in 2017), it’s no wonder that 60% of companies that experience data loss close within six months.
Knowing the negative impact of disasters on businesses, it’s shocking that 71% of businesses still do not have a disaster plan in place, according to a report from Office Depot. Studies show that 54% of companies experienced a downtime event that lasted more than 8 hours, in the past 5 years. According to the Federal Emergency Management Agency (FEMA), almost 40% of small businesses don’t re-open after a disaster.
Benefits of having a Disaster Recovery Plan
Those are scary statistics. It’s clear that a disaster recovery strategy is a must-have for growing and established businesses. Let’s review some of the top benefits why disaster recovery is crucial for your growing business.
1. Downtime is really expensive: Have you really considered the actual costs of downtime? I’m not talking about just the loss of access to business-critical applications and data, and its impact on productivity and revenue.
According to the National Archives and Records Administration, over 90% of companies that experience at least seven days of data center downtime go out of business within a year.
2. Client data safety: It takes years to build a brand reputation, but the loss of confidential client or customer data can destroy that reputation within minutes. Having a disaster recovery plan in place, ensures confidential client/customer information is properly stored and controlled.
Humans make mistakes, too: Occasionally, the Micheals, Irmas, Harveys and Marias in your office are the biggest threat to your business. Employees can be responsible for the largest data losses. Humans are error-prone and can make poor decisions, which can end up compromising data. It’s one thing to invest in training your employees to avoid data breaches, but you should also invest in backup solutions.
3. Systems will fail: Your on-premise backup systems can and will fail. No solution is 100% perfect and machines wear down, causing hardware and other systems to falter.
What can you do now (before it’s too late)?
Businesses can proactively prevent downtime, protect against data breaches and ensure the safety of mission critical information by leveraging secure virtual servers on a robust cloud platform like Microsoft’s Azure.
No one wants something bad happening to their business, but it’s best to be prepared for the eventuality that your business will face such disasters. They will happen, but you can protect your business, by assessing and investing in a disaster recovery solution.
The right solution for your business will depend on your resources and objectives. If you are interested in implementing a practical and efficient disaster recovery plan, contact an Admiral executive today.