A data disaster can have a domino effect on your entire operations that stretch far beyond the loss of files or inability to access applications. In our experience, companies are often surprised by the second wave of issues that are caused by a data disaster.
Here is a quick look at 5 common fallout factors that can be just as disruptive as the disaster itself – all the more reason to partner with a trusted data protection provider.
1. Unexpected Staffing Costs
If your back-up has a recovery-point of many hours ago (or days?) then your staff may have to invest all of those same hours in manually re-entering transactions, accounting entries, inventory adjustments, CRM notes or other data elements that are now lost since the last back-up was performed. The cost of overtime for your staff could be a significant blow to your operating budget.
Similarly, if the recovery time it takes to restore your systems and data is measured in hours or days, you can’t simply stop paying your staff while they sit inactive. Productivity is the first victim of a data disaster and the labour costs can add up quickly.
2. Potential Client Loss
Once productivity suffers, customer satisfaction is sure to follow. How can you service clients without access to your data or systems? The expectation today is that service providers should be able to respond immediately and accurately. If your product is not available right now, there is always a competitor out there that can take your place.
Furthermore, if you have to divulge to your clients that a system failure that is keeping you from serving them, you may be losing their confidence as a provider. Any investor who receives a notice from their financial advisor about a potential breach of secure data is likely to be switching advisors soon. A data disaster can easily result in the loss of your key clients and have a serious impact on your top-line revenue.
3. Disruptions to the Recovery Plan
What is your communication plan for the recovery? Often overlooked as an important step in disaster recovery, the way you keep your staff informed about the process can make a big difference in the speed and success of your IT team.
Having 20 people ask your IT staff when things will be back online will only slow them down and create frustration for everyone involved. A poorly managed data disaster can be very stressful for your entire workforce. Corporate culture and employee morale could become collateral damage in a prolonged downtime.
4. Compromises to Other Areas
If you have been hacked, the perpetrators may have gained access to more than just your data. With access to your systems, they may have compromised the security and camera systems at your various locations. Part of your recovery costs could now include updates to your access control systems and a complete replacement of all security access passes.
Think about what other areas could be affected by a systems breach and the cost of returning to a secure state. If you are not sure, speak to your data protection partner today.
5. Reporting Costs and Fines
In the event of a data security breach, who do you need to notify? The Digital Privacy Act of 2018 requires organizations in Canada to notify affected individuals, as well as the Office of the Privacy Commissioner of Canada, of any data breach that creates a “real risk of significant harm to the individual.” They must do so “as soon as feasible” or face fines of up to $100,000 per violation.
Even without punitive fines, there is still a cost to involving your legal counsel and mailing notifications to all affected parties. The investment of time in dealing with a privacy breach alone is a significant fallout cost for your management team.
How to Avoid These Fallout Factors
The best way to mitigate data disasters – because they do happen – is to partner with an experienced DRaaS company that knows how to implement key safeguards. Ensure that your RPO and RTO are strong enough to turn catastrophes into hiccups (or test drive our service for FREE if you aren’t sure). And finally, be aware that Cyber Insurance doesn’t cover everything so check your policy.
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