Saturday, December 3, 2011

A Computer Disaster Can Put Your Company Out of Business

"93% of companies that lost access to their data for 10 days or more due to a disaster filed for bankruptcy within one year of the disaster, and 50% filed for bankruptcy immediately." (Source: National Archives & Records Administration in Washington.)

Yes, disasters do happen, but we don't need to be helpless victims in the face of every disaster.
To prepare for various causes of computer system disasters there are two important approaches: prevent the disasters you can, and develop a recovery plan for those disasters caused by forces outside your control. There are many computer system disasters that are 100% preventable.  Then there are circumstances that are out of your control like "acts of God"  such as fire, flood, and earthquakes. Under those situations the best you can do is mitigate the consequences as much as possible.  Whether you want to prevent disasters or mitigate the consequences of one you need a plan of action.

Why are so many small businesses ill prepared for a computer disaster?  

This illustration provides an explanation: 3% of all hard drives fail on an annual basis. That statistic is constant whether  you have one computer or 1000. However, there is a difference in perception between the company that has one computer versus a  company that has 1000 computers.  The company with 1000 computers experiences 30 computer hard drive failures each year.  As  result that company will have a process in place to replace those hard drives quickly and with as little disruption as  possible.  Contrast that with the company that has one computer. It may have yet to experience a hard drive failure.   Therefore, there is a perception hard drive failures don't happen and are ill prepared and caught of guard when it does happen.  I'm certain that the functioning of the computer system is just as important to the company with one computer as the one with  1000 computers. The difference is the company with 1000 computers has been taught through experience and developed disaster  recovery process whereas the company with one computer has no experience with such a disaster and therefore is lacking the appropriate level of emergency recovery preparedness.

But, do you have to wait for a disaster to occur in order to learn what can happen and what you need to do to prevent that kind of disaster or be properly prepared with an emergency recovery process?  Obviously, the answer is no.  You can learn from your peers.  What about that 1000 computer company?  Don't you think that company may have some insight you would find useful? It is definitely very important for you to find an expert in this area. Lack of experience or knowledge can be extremely costly if that lack of preparedness results in the loss of your business.

Next: What Computer "Disasters" Can Be Avoided or Prevented

Have you ever lost an hour of work on your computer?

Now imagine if you lost days or weeks of work – or imagine losing your client database, financial records, and all of the work files your company has ever produced or compiled. Imagine what would happen if your network went down for days, where you couldn’t access e-mail or the information on your PC. How frustrating would that be?

Or, what if a major storm, flood, or fire destroyed your office and all of your files? Or if a virus wiped out your server…do you have an emergency recovery plan in place that you feel confident in? How quickly do you think you could recover, if at all?
Many small business owners tend to ignore or forget about taking steps to secure their company’s network from these types of catastrophes until disaster strikes. By then it’s too late and the damage is done.

"93% of companies that lost access to their data for 10 days or more due to a disaster filed for bankruptcy within one year of the disaster, and 50% filed for bankruptcy immediately."
(Source: National Archives & Records Administration in Washington.)

Your first response may be this is an astonishing statistic.  But, is it all that surprising?

Obviously, this statistic would not even exist if all business owners had effective disaster recovery plans in place. I'm sure that these companies that declared bankruptcy after disaster thought their businesses were secure from the consequences the very disaster that put their company out of business.  Unfortunately, there is a huge gap in the knowledge small business owner need to have in order to develop an effective disater recovery plan.    

In the next series of blogs I will go over developing an emergency recovery plan for your business that will keep your business functioning through the loss of your computer systems or communication systems as well as loss of access to your company data and customer databases.

Having a disaster recovery plan is critical to not only your company continuing to conduct business but also staying in business.