Protect Your Business & Avoid a Disaster

by Robert Driscoll on September 3, 2009


Your company’s data might be your most valuable asset, and with our ever-increasing dependence on IT systems and digital data, it is becoming even more important to protect it in the event of a disaster.

There are a number of reasons why companies haven’t initiated a disaster recovery plan.  It could be:

  • Lack of resources (both internal and external)
  • Limited budget
  • Don’t feel there is a need for one

According to a 2008 study done by KPMG, only 5-6% of a company’s IT budget was allocated to disaster recovery planning and preparation.  At the same time, according to another study done by Janco Associates, only 6% of companies who suffer a catastrophic data loss survived, 43% of these companies never re-open and 51% close within 2 years of the disaster.  In this same study, it was found that 93% of companies went out of business that didn’t have their data backed up at all in the event of a disaster.

Even an event that disrupts your business for a short period of time can have catastrophic consequences.  The chart below outlines the costs associated with computer downtime and lost data for businesses.

Industry Sector




Financial Institutions

Information Technology





Lost Revenue Per Hour

$2.8 million

$2.0 million

$1.6 million

$1.4 million

$1.3 million

$1.2 million

$1.1 million

$1.0 million


The primary threats to a company’s data are:

  • Hardware or system problems
  • Human error
  • Software Corruption or program problems
  • Computer viruses
  • Natural disasters

What they all have in common is that they are unpredictable and possibly unavoidable, but with a good disaster recovery plan in place, these threats can be minimized or completely eliminated.  If you don’t have a disaster recovery plan in place, there are several sites that you can go to that provide free templates to help get you started, but ultimately, you should contact a 3rd party who has expertise in designing and implementing a disaster recovery plan that meets your companies requirements.  As you start designing your disaster recovery plan, it is important to weigh the risk of financial loss vs. the cost of creating a contingency plan.

Whether you spend the money or accept the risk, it has to be an executive decision.  Not understanding your risks at all could be the biggest risk for your business.

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