Data Loss

Data Loss – What is your data worth?

Apr 26, 2023

You’re a small to medium business owner, you sit down to start your day, turn on the computer and you are unable to access your data!

In this situation your data becomes more valuable by the hour. The longer you are unable to access your data the growth productivity losses.

Locked out of all your company files is one of the most common causes of cyber disruption today. When unable to access critical files, staff productivity and motivation negatively suffer.

Disruption for the business can come from the loss of one critical file, through to large scale data-loss incident. And in the case of a large-scale data-loss event, like a ransomware attack, the recovery costs can sometimes be overwhelming for smaller companies.

How much does data loss cost?

Calculating the average cost of data loss can be tricky, as it can vary widely depending on the size of the business and how valuable the data is. For those who have gone through it, I’m sure they would agree that a typical data-loss event can be tremendously expensive, frustrating, and painful.

  • A 2022 study by IBM and Ponemon Institute found that the global average cost of a data breach was a staggering $4.35 million, or approximately $164 per data record. However, this research is mostly focused on the costs of data breaches, such as theft of personal user data, login information and credit card numbers.
  • A recent report by Verizon found that “small” instances of data loss (around 100 lost or compromised records) cost businesses an average of $18,120 to $35,730.

Difference between data breach vs data loss?

Data breach – is an incident where information is stolen or taken from a system without the knowledge or authorization of the system’s owner.

Data loss – is where information is destroyed by failures or neglect in storage, transmission, or processing. Specifically, to data that has been destroyed, deleted, or has gone missing.

In a data breach, cybercriminals gain access to your data. Typically, this data is discreetly copied, but not destroyed, to avoid detection and later the data is sold to other cybercriminal groups. In a data-loss event, the data is lost.

What is the cost of downtime?

Again, these calculations can be tricky. It’s not only the missing files, consideration of costs also needs to include the impact of the knock on effects. When data is lost, your team is unable to operate, costs escalate swiftly.

Downtime is defined as the length of time that operations are interrupted (or altogether halted) by data loss.

Why the difficulty in calculating costs?

Every business is unique. Each has their own operational costs. A manufacturing company may be able to keep the factory running for a short period, while a finance company may stop instantly as an example.

It really depends on how the data is used in the business operation and how it’s protected.

Factors that can influence the cost of data loss:

  • Company size
  • Amount of data lost
  • Value of the lost data and/or its impact on operations
  • Length of outage / speed of recovery

Larger businesses naturally have larger datasets, which can increase the costs of a disaster. On the other hand, larger companies tend to have greater financial resources for recovering from such an event, whereas smaller companies face a greater risk of failure.

So, why does data loss cost so much?

  • Often there are direct and indirect cost.
  • Idle employees and lost wages
  • Every hour of downtime, multiplied by the number of idled employees, can become a significant number.
  • When business stops, staff are idled. Often left with nothing to do (not much manual filing occurs in today’s business)
  • Consider a ransomware attack, all your computers, servers and email systems locked. Staff unable to do their jobs. Still being paid, even if you send them home.
  • Disruption to revenue streams. As an example, if the business is unable take orders or process transactions, the loss of revenue is immediate. Or if you have a production line, you are unable to access the system – production stops and the business losses money.
  • Damaged reputation and credibility – what do your clients think?

How often does data loss happen?

A lot (unfortunately). Human error is typically the #1 cause, as data is often accidentally deleted or compromised by user action. Other common causes include:

  • Ransomware, viruses, malware or cyberattacks
  • Hardware failure
  • Software errors, bugs or crashes
  • Operating system failure
  • Physical damage from on-site events, such as fire or natural disaster

Can you prevent permanent data loss?

YES!!!!

Risk and exposure can be significantly reduced with a data backup solution. No business can eliminate the risk of data loss; however, a good backup solution will ensure that lost data can be quickly restored. Real business continuity solutions can back up a business’s entire computing infrastructure every few minutes and enable real time recovery options, on-site or via cloud backups.

Through a well set up data backup system businesses can prevent data-loss from becoming an expensive disaster.

Are there other ways to help prevented data loss?

Yes!!

Stop it before it happens.

Human error is a major cause of data being accidentally wiped out. Organisations can therefore reduce the risk of data loss by implementing education systems. Cybersecurity training for employees is certainly one example of an effective preventative measure.

Other strategies for data loss prevention:

Software Updates

Patches and updates are critical to prevent cyberattacks (many of which take advantage of known vulnerabilities for which patches exist). Not actioning the updates can be viewed as leaving the back door of the house open.

Staff Education

In today’s environment most successful cybersecurity attacks can be traced back to human error. All staff need to be educated (with regular training) about potential risks, recognising scams, and understand how to protect their digital identities.

Access restrictions

The greater the network restrictions, the less damage can be caused by users or malware. Provide users access only to files and folders they need for their day-to-day role. So, if users accidentally delete files or their accounts are hijacked, the damage will be contained to those few directories.

Hardware management

Managing your fleet and keeping current will help prevent unexpected failure by replacing aging drives and other hardware before it begins to fail.

Backup

This is not optional – they need to be part of a larger business continuity strategy. If you’re the casualty of a ransomware attack, having up-to-date, accessible backups can help minimize business disruptions. Obviously, testing and validating the backup and recovery plan is also critical.

Fact – smaller businesses cannot afford the hurtful cost of data loss. Every minute of downtime can impact the business. In the event of a large-scale data-loss event, such as ransomware, some companies may be forced to close their doors permanently.

Again, while no business is completely immune to data loss. Companies can lessen the risks. Start with implementing a dependable data backup system that rapidly restores data after a disaster and empower your staff through educational training.

If you would like to know more about out data loss prevention services, please get in touch with us.

 

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