Study: True financial costs of IT downtime revealed
One of the biggest challenges that business continuity planning faces is measuring the actual costs of downtime and the value of swift recovery. However, a recent study has outlined the true cost of IT failure and downtime that U.K. enterprises have faced over the last 12 months. This data can be extrapolated to provide U.S. firms with a more accurate assessment of the financial risks they face when it comes to disaster recovery and setting up a continuity of operations plan.
According to KPMG's new report, Technology Risk Radar, employers in the U.K. dealt with, on average, more than $643,000 in unplanned expenses related to technology-related problems over the course of 2014. About half of these were avoidable issues, such as software coding errors or failed IT changes, with about 7.3 percent reported as "human error," caused by employers or suppliers, rather than a device or platform. Furthermore, 16 percent were reported as occurring with unintentional data loss.
"Technology is no longer a function within a business which operates largely in insolation. It is at the heart of everything a company does and, when it goes wrong it affects an organization's bottom line, its relationship with customers and its wider reputation," said Jon Dowie, partner in KPMG's Technology Risk practice. "Investment in technology will continue to rise as businesses embrace digital and other opportunities, but this needs to be matched by investments in assessing, managing and monitoring the associated risks. At a time when even our regulators have shown themselves to be vulnerable to technology risk, no one can afford to be complacent."
Dowie noted that increasing complexity in IT systems, as well as the challenges inherent in implementing key IT change, has many firms struggling to manage risk. With the cost of failures outlined for 2014, it is all the more clear that firms have to better understand the risks they face and prepare to optimize disaster recovery efforts every step of the way, if not mitigate and avoid them in the first place.
The continued expectation to minimize continuity risk means companies need to invest more heavily into advanced planning for any and all potential threats to workflow. Public facing companies have the upper hand when it comes to recognizing threats, the report revealed, but firms in all industries need to take a more proactive stance when it comes to business continuity.
If you're looking to up your game with continuity of operations planning, considering hiring consultants to optimize your strategy and help properly manage disaster recovery costs. The right expert advice could save you thousands.