January 14 2019 - There is no question about it, data is at the heart of any business. Regardless of size, businesses rely on data to make informed decisions, track performance, identify solutions, understand customer and market behavior, and improve processes.
Simply put, data is at the core of business decision making.
It is imperative therefore for businesses to ensure its integrity, accessibility, and most of all, protection. Data protection ensures business continuity and establishes a good reputation.
Regardless of the cause, data loss can bring cataclysmic results, especially to small and medium-sized businesses.
While a data recovery service may be able to restore valuable data that has been compromised, deleted, or corrupted, setting up proper data protection or data loss prevention helps prevent these circumstances from happening in the first place.
However, there is more to just safeguarding your valuable data to ensure that there will be no disruption in your business. Here are three reasons why data protection is crucial for any business.
Data is an Asset
Research estimates that connected devices around the world produce a staggering 2.5 quintillion bytes of data; and by 2020, about 1.7 MB of data will be created each second by every person on earth.These numbers include those produced by activities on social media, search engines, communication, services, and the internet of things. That's truly a wealth of information that businesses can harness and extract value from; yet, we are just speaking here of data from connected devices.
Businesses produce, acquire, store, manage, and maintain electronic data that come from day-to-day operation, customers, competitors, suppliers, and employees. The data collected, processed, and analyzed help identify opportunities for growth, changes in customer behavior and preferences, and improve competitiveness.
Like any other asset, data should be managed and protected from theft, deletion, and destruction. Sadly, a number of businesses overlook the value of data and the need to protect it. In fact, a survey on business continuity (BC) and Disaster Recovery (DR)> reveals that only 37 percent of the respondents feel that they are "Prepared" to recover data center in the event of a site failure or disaster event; those who felt they are “Very Prepared”, on the other hand, were a just a mere 18 percent.
Data is not only valuable to your business, but to hackers as well. Financial gain is their biggest motivation - seventy-six percent of them, in fact - and small businesses are the most vulnerable. What is even more concerning is that, 68 percent of these data breaches took months or even longer to discover. That is a long time - long enough to cause serious damage.
Data Loss and its Financial Impact
Apart from the inconvenience, service disruption, and potential damage to your business' reputation, data loss can spell huge financial losses. Depending on the extent of damage, data loss can cripple a business, especially the small and medium-sized businesses who are ill-prepared for the worst case scenario.
A 2014 Data Recovery survey indicated that about 73 percent of respondents failed as far as disaster/outage IT systems recovery preparedness is concerned. The cost of data loss from disaster/outages? About 20 percent of respondents indicated losses ranging from $50,000 to over $5 million.
While a 2018 Cost of Data Breach study involving 477 companies puts the average cost of a data breach to about $3.86 million, forty-eight percent of these data breaches were caused by malicious attacks with an average cost of $157 per record.
Unless you have a backup and recovery system put in place, data loss could be permanent. However, the cost of recovering lost data can be just as financially impacting. Whether it is in-house or outsourced data recovery service, estimated average cost of recovering data would be about $950 and loss of productivity at $1,500.
Other than the cost of data recovery and loss of productivity, affected companies may have to deal with other costs like regulatory fines, hardware replacements, forensic analysis, and even losing valuable intellectual property.
Simply put, when your firm's bottom line is at stake, data loss is an issue that should not be taken lightly.
Your Business Reputation is at Stake
Good reputation keeps the business going. Data breach damages that good perception about your company.
In recent years, we have seen many incidents of data breaches; and some involving large companies like Target, Sony Pictures, and Home Depot. In 2014, thirty-five percent of data breach notifications came from retail stores, while 19 percent and 17 percent were from social media and web retailer, respectively. Needless to say, the reputation of these companies have been damaged, although, major companies were able to recover from such debacle quickly.
However, such may not be the case for the rest of these companies which are not as stable and established as the bigger ones. For smaller companies, recovering from reputational damage may be a long and hard process.
Data protection also matters to your clients/customers, or even your own employees. An overwhelming majority of customers, 86.55 percent to be exact, said that they are "not at all likely" or "not very likely" to do business again with companies who failed to protect their credit card information. Other personal information that customers are sensitive about are email address, home address, and phone number. Moreover, another survey revealed that the fear (both very and extremely concerned) of becoming a victim of identity theft before and after a data breach increased from 24 percent to 45 percent.
Data is more than just numbers; it's the lifeblood of any business, big and small. A business' ability and commitment to protecting its data shows that it cares about its customers' personal and vital information as well.
Businesses spend time, manpower, and money to acquire and maintain data; therefore, it should be safeguarded and managed. It's an investment.
Data loss and damaged reputation can bring down a business, and that is a serious matter a responsible business owner should not ignore.