5 Scary Consequences of Data Loss That Can Tear Down Any Business
Have you ever thought about the key factors that keep your business running every day? If you’ve really given this question a thought, then it’s likely that data ranked somewhere close to the top of your list. Data acts as a fuel for the modern businesses, allowing them to operate smoothly in their day-to-day functions. So, what would happen if a business is cut off from this essential fuel? What would happen in the scenario where a business has lost all its data due to reasons like a malware or virus attack, server crash, data corruption, device theft, or any other such catastrophic event?
One thing’s for sure, the business will regret not having done enough for its data security. Apart from the obvious regret, following are some of the grave consequences that lie ahead of a business that has just lost its valuable data:
A Hefty Blow to Your Business Finances
If the data that supports your critical business applications and functions is no longer available, then your business would no longer be in a position to work and earn money as usual. Additionally, it’s not only about the money that you lose from not being able to operate. The blow to your finances becomes even more severe if you have no data backups to work with. Recovering from the data loss could take a big toll on your finances. You may have to say goodbye to the money that you had set aside for business expansion and other such ambitious plans, because all that saved up money may be required to ride out the data loss.
Your Business and Employee Productivity Could Get Seriously Affected
In the earlier point, we looked at how data loss has an adverse effect on your business operations, and the financial consequences of the same. But, in addition to the financial aspect, data loss would impair the productivity aspect of your business as well. Since we know how critical data is in driving the daily activities of the business, not having access to this data would make it impossible for your employees to work and your workflows to continue seamlessly. This would continue to be the case until the data has been recovered in entirety. In the absence of the data, you may even find it difficult to take important business decisions, since most businesses today leverage data-driven decision-making. In this way, data loss puts the present as well as the future of your business at high risk.
Your Customers May Lose Faith In You
As we know, it takes years to earn the trust of your customers, but only one unpleasant event (like data loss) to lose all that hard-earned trust. A business that has been a victim of data loss may struggle to retain the trust and loyalty of its customers, because such an event is often perceived by customers as negligence on the part of the business. If the data that has been lost is that of the customers, then their discontentment would only be magnified. Therefore, losing your data could also mean losing your customers. Additionally, a data loss event doesn’t stop haunting your business anytime soon. So, you not only stand to lose your existing customers, but you also run the risk of turning away any new, potential customers.
Legal Ramifications May Follow Next
Data loss exposes a business to all sorts of legal actions, fines, and lawsuits. If the data lost includes customer data, then you may have to face fines for being unable to adhere to the data protection related laws and regulations. Shareholder lawsuits are also a risk. Because your business operations are affected in the event of data loss, you could also be sued for being unable to perform the duties that you are accountable for as a business. Moreover, you may be sued by the customers who have been directly affected by the data loss. Getting caught up in these legal battles can worsen your already weakened business condition.
You Could Eventually Go Out of Business
Let’s hope that it doesn’t come to this, but you can’t ignore the possibility of going out of business because of data loss. We just looked at the various ways your business might face the heat on losing its data. There are plausible issues on every front, finance, productivity, customer trust, and legal. If the data loss was only temporary, then there is still a chance for you to get back in the saddle eventually once the data has been recovered. But if the data loss was permanent, then getting back on your feet would not be so easy. Businesses going bankrupt or permanently shutting down due to a significant data loss event is not unheard of. The reason being, because of not taking enough precautionary measures for protecting their data, businesses are not prepared to bear the brunt of the data loss. Losing customers and significant money all at once can be so detrimental for the business that shutting down remains the only option.
What Can You Do to Avoid These Dire Consequences?
Now that you’re acquainted with the ways in which data loss can wreak havoc on your business, let’s talk about the ways in which you can avoid ever having to face these dire consequences yourself. Given the severity of impact that data loss may have on your business productivity and finances, you should take some measures that can limit this impact in the event of data loss. One such measure would be to hire a reliable and efficient managed IT services provider to manage your data security. The provider will be able to help limit your data loss related costs by restoring the lost data as quickly as possible, through their fail-safe data backup and recovery services. Therefore, your data will be restored and your business will be up and running before you know it.