There can nothing more frustrating to a company than a data loss. Most companies may suffer a great loss of business in case certain vital information is lost from their computer.
You may eventually recover your lost data after some time, but your loss of productivity or opportunity because of not being able to access the data can be very high at times.
The following are a few real-life data about what various companies lost because of their data loss:
- About 93% of companies were compelled to file for bankruptcy because of data loss
- 94% of companies after suffering from data loss could not survive
- 30% of various businesses were out of business just within a year and about 70% failed within 5 years.
- 25% of all users of PC suffer from loss of data almost every year.
The following are few major ways such data loss can impact your business.
When your company loses its data then productivity will be the first casualty that you may suffer, which can be due to an unplanned network outage, malicious cyberattack, or hardware/software failure.
Often your lost files may take a few hours or even a few days to recover. As a result, your staff face downtime and lost sales. As per the Strategic Resource Institute, any company that cannot resume its normal operations within ten days of their data loss incident may not possibly survive.
As we are living in the digital age, hence news travels quite fast. If your company cannot serve its clients then it can become a major headline as due to your data loss incident, all these negative publicities can damage the reputation of your business permanently.
Few companies spend hundreds and thousands of dollars to repair their brand after any such data loss event occurs.
Exposure of confidential information
If any data gets lost either due to negligence or theft, then it may lead to exposure of your confidential information. You may be heavily fined if your customer data or any employee records get compromised.
Your financial consequences can get compounded if affected people sue your company.
Loss of customer loyalty
Your loyalty to the customer may also get tarnished in case such a data loss event ever take place, especially if your client data is compromised. In case your customers cannot trust your company about their data protection, then they may transfer their business elsewhere.
Also, once the word gets circulated, it may take you to face an uphill task to search for new business clients.
Permanent business failure
Also, data loss has several other economic impacts on your company. There can be a permanent business failure and each year, a handful of companies have to finally close their doors after suffering a major data loss.
When your financial impact along with hidden costs due to data loss gets combined, they can create a perfect storm, from which it is impossible to recover.
Fortunately, most businesses can prevent such data loss risks with proper planning and also a professional help.