The Price of Failure

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Preparing for disaster situations and putting in place plans for recovery can make all the difference between businesses that are able to successfully manage a crisis with minimal cost and impact on their operations, and those that are left to pick up the pieces or, worse, go under as a result.

Here we give some examples of typical scenarios that can have dire consequences on ill-prepared businesses.


Large scale floods in the UK over recent years have caused thousands of homes and businesses to lose irreplaceable data from their computer systems. Needless to say water and technology don’t mix and flood damage to servers and PCs can leave the data contained on them irretrievable.

By taking simple precautions of using remote backups of data and having access to temporary offices can mean a business is able to recover surprisingly quickly. Unfortunately, however, for too many businesses caught up in the floods they either had no off-site backup or inadequate on-site backup resulting in dire consequences for their future.

According to one industry study conducted by The Diffusion Group, 60 per cent of smaller companies that lose all their data go out of business within six months of the disaster while the results of a similar study carried out by the British Chambers of Commerce found that 93 per cent of businesses that suffer data loss for more than 10 days went bust within a year and 50 per cent within weeks of a catastrophe happening.

With today’s automated off-site backup solutions, and options for home working, alternative temporary office space or a mix of the two, there’s little reason why any business should fail as a result of flood, fire or other calamitous event.


By and large, today’s office technology is very reliable and major system failures are few and far between. However, that is not to say that occasionally systems such as hard drives and system software on servers or PCs can, without notice, stop working. And when that happens, a business can also stop working.

However, steps can be taken to minimise the risk of equipment failure and resulting data loss such as using fault tolerant hardware and system redundancy methods to help reduce your overall exposure to system downtime.

One such strategy is to minimise so called ‘single points of failure’; that is points within your IT and network that, if they fail, would result in a serious disruption to your business. Generally, this involves duplication of components such as power supplies, hard drives and network devices.

If your business relies on the use of a database then a replication of the database or use of a technique called ‘log shipping’ is a sound strategy. Last year, a mail order company that had data backed-up but didn’t have any system redundancy nearly went out of business when it took too long to recover from a major disk drive failure.


The accidental loss or theft of personal data held by a company, for example stored on an unencrypted laptop or as a result of malicious access of a company’s server, is a relatively common occurrence. This situation is unsurprising when a recent survey found that 68 per cent of SMEs in the UK do not routinely train their staff on information security procedures.

The Information Commissioner’s Office (ICO) introduced new rules in 2010 allowing companies to be fined up to £500,000 for breaching the Data Protection Act – a ruling that should encourage businesses to take action to ensure they properly safeguard personal data they hold.

Last October, the ICO imposed a £70,000 penalty on a company after highly sensitive information about the care of four young children was stolen. In July last year, a financial services firm was fined £150,000 for the loss of personal financial data held on two backup tapes that were lost.

A security breach may arise from a theft, a deliberate attack on your systems, the unauthorised use of personal data by a member of staff, accidental loss or equipment failure. However the breach occurs though, it is essential to respond to and manage the incident appropriately.   

  • 60% of smaller companies that lose all their data go out of business within six months of the disaster
  • 93% that suffer data loss for more than 10 days went bust within a year

Speak to us today to ensure your business doesn’t fail because of an event you hadn’t planned for     Tel:  0330 2020 340      Email:            Twitter: @Amshire

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