Data in today’s digital world is so important that its loss translates to closure of businesses. The day is not far when data losses of great magnitude might pull down governments.
Data Is Important!
Value of data differs according to its nature. Information contained in home pc is most likely to be a few financial statements relating to taxes, banking accounts or the assets and liabilities of a family, downloaded music files, games and family photographs.
Data loss from a home pc might not lead to disastrous consequences, for such data can be recreated. However, the loss of photographs would be deeply painful for they are priceless.
Data loss from the home pc has high emotional costs, while the loss from business pc entails great economic costs. So severe is the financial cost of data loss that 93% of business enterprises close within a year if they are data deprived for a 10-day period. There are many more similar statistics that might frighten an entrepreneur; however, the message that is delivered is ‘protect your data or lose your business.’
Why Does Data Loss Lead To Financial Bankruptcy?
Losing data is expensive for it results in a loss on many fronts. The initial expenditure begins with notifying customers about the loss.
Informing Clients of Data Loss
After losing data, customers have to be informed about business closure for some time and this requires many man-hours of effort. However, this cost is less compared to the bigger loss resulting from lost business opportunity.
Lost Business Opportunity
Companies cannot fulfil client orders when they are devoid of the requisite information. Subsequently, customers are forced to go elsewhere and this translates to a huge monetary loss.
Moreover, modern consumers are an informed lot. When the organisation they do business with loses their data, they lose trust in the company and terminate all business links.
Rebuilding Reputation
No organisation can afford to lose customer trust. When faced with such a situation, they make all effort to rebuild their lost reputation though this process might be costly. However, modern day consumers do not take kindly to data loss; they file lawsuits against the data loser.
Lawsuits and Damages
Charges filed by irked customers cost the company much. Though clients filing charges is a probable expenditure that has been reckoned here, the other loss to a business enterprise results from downtime costs.
Downtime Costs
Absence of business information results in diminished or nil productivity of employees (till data is made available.) Such downtime costs are high and vary according to the nature of the business or the sector the company belongs to. The data losing company has to then either recreate data or retrieve it.
Cost of Recreating Lost Data
Data that has been protected in a backup should be taken out of the identified backup media and re-entered in the system. This process requires many man-hours and employees have to be paid overtime. These costs escalate, when lost hours of productivity are also factored in. The manpower that was employed in re-entering the recovered data from backup media could have otherwise been productively employed. Alternately, new employees would have been inducted on a short term basis for running the business, while employees were recreating lost data.
Some companies feel that it might cost them $50,000 per hour to recreate lost data. If recreating data is so costly, then another option worth trying is recovering it by availing the services of data recovery service providers.
Cost of Recovering Lost Data
Data recovery experts charge high, for data recovery involves working in class 100 clean rooms and the usage of specialised tools. Important data has to be handled by experienced data recovery experts who ensure higher recovery rates, but they charge high.
Digital data is precious, yet it cannot be insured! This confirms how volatile it is.
Data loss has become frighteningly common, and the advent of laptops in the computing arena has increased data loss cases, for they frequently get damaged or stolen. Seek easier backup methods that ensure quick data retrieval if you want to ensure long-term survival of your company.