What Happens to a Company After Data Loss?

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Imagine this scenario: You walk into work one day, ready to start the project you’ve spent weeks working on with the deadline fast approaching. Then, you discover that not only is your data missing, but your whole company network is missing huge chunks of data from its system. Was it a virus? A hacker? A system glitch? Whatever the cause may be, your data is now missing and there might be no way to recover it.

This is the worst-case scenario for any company, regardless of size, and we’re not even considering data theft yet. But no matter how little or how much data was lost, it will cause negative effects on your company either way–and yet still so many companies fail to realize the importance of Office 360 backup restore solutions and other backup practices.

If you are one of those companies, then it’s time that you find out about the possible consequences of a data loss:

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Business disruption

No matter what caused the data loss, one thing remains certain: loss of data is going to cause a disruption in your business. If you’re an online retailer, lost order sheets mean you can’t fulfill your most recent orders. If you’re a marketing agency, missing working files mean days–or even weeks–of work lost that you have to start over again. In any way you put it, data loss is going to put your business to a halt until you recover your data–if you can even recover it.

Depending on the severity of loss, it can take days to restore data on your devices, assuming that you have data back-ups on hardware. And if data wasn’t backed up before the loss occurred, that also means more time required to do redo the lost work. As a result, you’re very much likely to lose sales, which will continue until you’re up and running again.

Worst-case scenario? Your data loss is so significant that you don’t get back up on your feet again. Of course, this can be avoided by proper backup practices and good security measures.

Confidential information leak

Another potentially devastating consequence of data loss is the leak of confidential information. Aside from losing business from your customers who entrusted their data to you (which you failed to protect), you may also be liable for huge fines levied by the Information Commissioner’s Office. The financial consequences are going to be even worse if affected customers decide to file lawsuits against you.

Reputation damage

Data loss can put you in the bad spotlight. If you fail to protect your data and compromise the privacy of your customers, the public is naturally going to see you in a bad light, especially if the news makes it to the media. And just like that–years of building your company’s reputation gone in an instant.

Bad reputations don’t last forever for all companies, but it takes a lot of money and time to rebuild a ruined reputation. Of course, this is completely avoidable if you do everything it takes to protect your company’s data.

Permanent data loss

If you’ve lost the data on your computers but have hard disc backup, that’s great. You can get operations up and running again in a matter of days–that is if you regularly back up your hard disks. But if your data was lost due to a malicious attack, you may be at risk of permanently losing more than a third of your data, even if you have a digital backup.

Permanent data loss is potentially devastating, especially if what you’ve lost were your most important files. At best, it can take a few weeks to redo the work you’ve lost and recover what you can. But some data cannot be replaced–and losing them permanently can be catastrophic for your company.

Business closure

The absolute worst thing that can happen to a company after data loss is business failure. Some businesses that lose a lot of confidential data can end up paying hefty fines for the damages, eventually leading to bankruptcy and closure. Others suffer a significant blow to their reputation and never really recover from it. Either way, this proves that data loss has a very real possibility of leading to business failure.

The consequences of a data loss can range from mild to severe. But regardless of the amount or type of data lost, the consequences can have negative impacts on the business–from a few hours of productivity lag to complete business failure.

One of the main priorities of a company, whether big or small, should be the protection of their data. The more effort you put into keeping your data safe, the less impact would a data loss have on your company’s operations and reputation.

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