With the speed and agility of electronic data transfer, not only is the business able to save precious time but also money because as we all know, time is money in today’s competitive business world. Therefore, the value of our data has increased now more than ever. For that reason, data protection and data backup procedures form an integral part of business continuity planning these days.

If you think that a data loss situation is only about recovering lost data, think again. A data loss situation can have disastrous consequences for a business. These consequences can go far beyond only financial implications of data loss. We will discuss the top five consequences of total data loss in the following section to aid your understanding process.

Consequences of Total Data Loss


Loss of Man-hours

During a total data loss event, since most of your operations will come to a standstill, all your employees other than specialised IT staff, will be sitting idle. Data recovery is not a child’s play. Often, it takes days or weeks for the data recovery specialists to recover the lost data. In addition, there may be no guarantee that the data may be completely recoverable. If you are unable to recover your data completely, your employees will end up wasting their time and your company’s resources in recreating the lost data rather than conducting new business. While this is an implicit financial cost, you may not account for it in your financial books of accounts.

Professional data recovery is an expensive affair. The experts work with specialised tools and techniques and since the nature of the service is highly technical, it is extremely expensive. If your business cannot survive without the lost data and recovery is your utmost priority, you may end up paying more to data recovery experts because speedy service comes with an extra price tag. If the data loss situation is such that the data recovery company needs to use a clean room environment, the cost of data recovery is bound to be higher.

Recent studies have proved that if a company is not able to completely recover from a data loss situation within 7-10 days from the date of disaster, it is likely to go out of business within 6 months from the date of disaster. In fact, many companies that were hit by the 9/11 terror attacks filed for bankruptcy because not only did they encounter a complete data loss situation but they also did not have adequate data backup procedures in place. Therefore, the business was not able to recover because the proprietary and confidential data was lost forever.

In the competitive business world, your company cannot expect sympathy from anyone during the time of crisis. Your customers as well as your creditors expect your business to perform as per their needs. If that is not the case, your customers will not conduct business with you and your creditors will pull out their money from your business. In addition, they may also sue your company for delay in payments that may result because of financial loss faced due to total data loss disaster.

Your company’s biggest asset is its reputation. With the huge amount of financial losses, increased business downtime, and hundreds of dissatisfied customers, your business’s reputation is bound to suffer. Many companies are not able to regain their market position after a total data loss disaster because the confidence of the customers as well as the investors gets shaken after the financial losses that result from total data loss disaster. Therefore, the companies are unable to find new business or sustain the existing one.

James Walsh is a freelance writer and copy editor. If you are concerned about data loss and would like more information on Data Recovery see:
http://www.fields-data-recovery.co.uk