9th October 2020

What are the Risks of Not Having a Disaster Recovery Plan?

By definition, disasters are rare and unpredictable. As such, they tend not to be the focus when executives think of day to day operational aspects of their business. It is no surprise therefore that up to 60% of organisations do not have fully documented disaster recovery plans. And even for those who have a disaster recovery plan, 40% admit that it is not effective. With so many organisations having such a casual approach to disaster recovery planning, you might be tempted to think that your organisation can get by without a disaster recovery plan. After all, what is the worst that can happen if you do not have a disaster recovery plan?

Complete Loss of Data

At a time when most businesses are heavily reliant on their information technology infrastructure, data is bread and butter. There is an unlimited number of ways that organisations can lose their data including through natural disaster, human error, security breaches, etc. No organisation is immune to all of these circumstances – 42% of organisation suffered data loss in 2019. A study done by the Diffusion Group found that up to 72% of businesses that suffer a major data loss close down permanently within 24 months. A similar study by the British Chambers of Commerce found that 93% of business have lost their data for more than 10 days file for bankruptcy within a year while almost 50% file immediately. Even for the businesses that do not close down, the loss of data triggers a snowball effect that typically costs thousands of pounds and sometimes millions depending on size and type of operation.

Business Interruption

Any time your organisation is not operating at full capacity, you are losing money. You not only lose revenue but also employee productivity. In the case of any disaster, however minor, and your organisation does not have a disaster recovery plan to enable a prompt resumption of normal operations, in the same location or elsewhere, you will lose money and employee productivity. A disaster recovery plan provides organisations with a smooth and cohesive approach to dealing with any kind of disaster so that operations can resume or continue as usual within the shortest time.

Loss of Clients

People are more aware of information security than ever before. Although your customers might be understanding and not likely to be moved by the fact that you had a data breach, they will demand to know where their information has gone. In addition to that, they will want to know when you will resume normal operations. The customers are invested in you because you help meet their needs. Telling them that you cannot meet their needs or that you need to start from scratch is not something they will want to hear. As such most customers will seek to know beforehand that you have methodically designed a disaster recovery plan that guarantees you will continue to serve them. Customers will lean towards organisations that can guarantee continued service and security of their information.

Damaged Reputation

How a business handles a disaster can either build or hurt its reputation. Poor handling of disasters can have a greater and longer-lasting impact far after the actual disaster. There are real-life examples of this including reports of fraudulent customer accounts at Wells Fargo and Volkswagen emissions scandal. Although these organisations later made up for their earlier mistakes, the initial damage due to poor disaster management was a big stain on their reputation for a while. Such occurrences can happen to any organisation and not having a proper response plan can greatly impact your bottom line, turn away quality employees, hamper future investment and other future prospects.

Business Failure

A huge and widespread disruption in technology infrastructure can well and truly dominate an organisation. Unfortunately, no organisation, however tech-savvy or protected, is immune from such catastrophic disruption. However, with a proper disaster recovery plan that includes measures such as data backup and a secondary data centre, an organisation can survive a catastrophic disaster. It is also important to note that the lack of a DRP does not mean that a business will automatically fail. It is possible to salvage, reconstitute and recreate records. The premise is that the majority of institutional knowledge that makes a business productive over time including processes are stored electronically. If a business loses its institutional knowledge, it might take months or even years to go back to its previous productive state. Some businesses do not have the luxury of operating at sub-optimal levels which is why they fail.

Downtime and IT outages, in particular, are growing ever expensive. It is no secret that disaster recovery and business continuity planning can greatly mitigate these losses. Wondering how you can start protecting your business with a disaster recovery plan, AdEPT can help. We are a leading managed services provider offering award-winning solutions to thousands of UK businesses for close to two decades. Contact us today to learn more about how we can work together to keep your organisation safe with our business continuity management services.

Written by Sami Malik

Marketing Campaigns Manager