Blog: Infrastructure Performance

The Real Cost Data Loss Has on Your Business

October 21, 2019 - by Tim Becker

In a digital world where businesses are struggling to respond to change and drive agility, success comes to those who are able to operate 24×7 – without interruption. Any kind of data loss – either due to malware, security breach, human error, power outage, or a natural calamity can result in a domino effect of devastating consequences.

Since data loss knows no boundaries and can strike anyone, anywhere, and at any time, it is important you have a robust data protection plan in place – with clearly defined RPO and RTO to restore and recover data that is critical to the functioning of your business.

Cost of Data Loss and Business Disruption

For organizations struggling to streamline business operations, keep pace with the changing market and be a step ahead of customers and competitors, the aftermaths of data loss are far-reaching: from disruption of operations to damage to reputation, exposure of intellectual property to loss of customer loyalty and even permanent business failure.

Given the average cost per lost record is $148 billion, companies that experience a severe data loss are never able to recover; in fact, many go out of business just within a year of a massive data loss incident. That’s exactly why you need a data protection solution in place, so you can reduce the chances of data loss, and minimize its impact.

However, the only way you can determine the right data protection solution to implement is by accurately defining the business impact. This is done by determining the cost of data loss and business process disruption.

Price of Data

The cost of lost data is measured in the value of the data itself. For instance, Intellectual Property data such as source code, business plans, financial records, customer data, etc., all are highly valuable and need to be protected for business and compliance reasons. Therefore, protection solutions need to employ to prevent the loss of data due to corruption, malicious destruction, or disaster.

Business Process Disruption

Measuring the disruption of the business process is typically done through the revenue lost over time due to unavailability of critical IT or the operational expenses accrued because team members cannot continue with their daily duties. Therefore, availability solutions need to be employed to ensure continuity of business operations.

The Role of RPO/RTO

Two SLAs that can help you understand business impact and cost of lost data(while learning how to mitigate corresponding risk and determine the proper data protection solutions for your business) are Recovery Point Objective (RPO) and Recovery Time Objective (RTO):

Recovery Point Objective

RPO refers to the maximum amount of time that can be tolerated for data loss. With most general IT infrastructures, one day RPO is common. In mission-critical infrastructures, minutes or hours RPO is more common because every minute or hour of lost data can have a substantial impact on revenue.

RPO typically dictates the protection method and cadence for the movement of data to redundancy targets. For example, a daily RPO requirement is typically met with backup methods. Hourly RPOs typically rely on continuity solutions such as continuous replication.

Recovery Time Objective

RTO refers to the maximum amount of time to restore a business operation to its original operating state, typically from either a data loss, IT unavailability or security incident. RTO includes not just the time to recover data, but also the real-time necessary to restore a business process.

For example, for critical and time-sensitive processes, an RTO of 0 hours is common. In such cases, systems must be in place to ensure they never go down. However, if you choose RTO that is extremely short, you will spend more time and money than required to protect yourself from disruptions; and if you make the RTO too long, the disruption can cause serious impact. Therefore, it is important to assess the criticality of your systems and applications and choose an RTO that is optimum.

Choose the Right Solution

Data loss is a critical incident that disrupts day-to-day functioning and can cost businesses an average of $3.86 million; when important files and documents are lost, businesses end up spending time and resources in recovering them and thwart further damage. Data loss also greatly affects productivity and can cause you to lose customers; even if you do recover from data loss, there’s a lot you will need to do to rebuild client relationships.

That’s why having a well-thought-out data protection strategy that clearly defines RPO/RTO SLAs is important. Since a lower RPO requirement typically is associated with a more expensive implementation from an OpEx and CapEx standpoint, it’s important to match the risk tolerance with a solution that is not over-engineered. When on the lookout for a data protection solution, make sure to choose one that matches your business requirements. Select a data protection partner to get assistance on what solution is right for you and never lose a single byte of data – ever!

Looking for solutions to minimize and prevent the cost of data loss? Schedule a call with one of our data experts today.


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