The Cost Of Data Loss:

What You Need To Know

According to Corporate Finance Institute Data loss is the destruction, deletion, corruption, or rendering of data unreadable by users and software applications. It can be caused by viruses, physical damage, formatting errors, or human error. Human error is still the primary cause of data loss, whether intentional or unintentional. Losing or leaking files and documents can have a lasting impact on your company’s health and reputation. Some lost data can be recovered, but the resources spent to track the leak and obtain the data can cost time and resources that your business could be using elsewhere.

Data loss can be a major inconvenience that affects the day-to-day business function of any business that deals with sensitive data. It can also set back productivity timelines and cause businesses to lose customers, especially if it is accompanied by a security breach. According to a research paper published by the Ponemon Institute:

  • 94% of companies that experience severe data loss do not recover.
  • 51% of these companies close within two years of the data loss.
  • 43% of these companies do not reopen again.
  • 70% of small firms go out of business within a year of a large data loss incident.

An article published by 451 Research suggests that around 20% of respondent businesses claim they have not tested their disaster recovery plans or do not have them. There are several steps that businesses can take to protect themselves from data loss, including:

  • Implementing strong security measures.
  • Regularly backing up data.
  • Educating employees about data security.
  • Implementing a data loss prevention (DLP) software to track leaks and logs of users.

By taking these steps, businesses can help to reduce the risk of data loss and protect their bottom line.

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