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Data Loss: The Severity of Impact

By: James Wallis

The digitalisation of data has merely compounded the fact – the annual growth rate of digital data is more than 51%. This means that more and more business organisations and personal users are storing important information on digital storage devices. Digital storage technology enables the organisation or the individual to store more than 20 million paper sheets on a single digital tape. In other words, data loss is expensive costing UK businesses billions of pounds in lost revenue every year. Computer hard drives now have the ability to store more information in smaller spaces amplifying the impact of a failure. Research indicates that the loss of data hits companies badly leading to the closure of more than 6% of established small manufacturing enterprises annually. Thus, the impact of data loss is more severe in small companies as compared to huge corporations as data is stored in different departments on different devices.

In addition, huge corporations have the advantage of a secondary backup, storing information at a secondary remote site. But the biggest adverse impact is felt on the UK broadcasting industry. Data loss results in sluggish broadcasting schedules and a consequent downward tilt in performance.

Loss of Information – a Vicious Cycle: The loss of digital data paralyses channels and MDS codes. Research suggests that broadcasting performance is closely linked to data reliability. In short, more than 43% of broadcasting stations experience computer failure due to natural disasters and virus attacks. A loss of 100MB of data amounts to more than 40,000 pounds resulting in catastrophic monetary losses. The loss of revenue stops incoming demand and the broadcasting station suffers.

Loss of important data such as performance figures and schedules, advertisement ratios and scripting material leads to low employee morale. This negatively effects performance and productivity. Thus the vicious cycle begins and the station is sucked into borrowing financially to boost production and profits. On the other hand, data loss requires data recovery or recreation is a costly affair. It indicates that a broadcasting station finds it difficult to survive in the organisational world. Figures indicate that more than 43% of broadcasting companies which experience severe data loss close within two years of the loss. These broadcasting companies find it tough to survive in cut-throat competitive business arena. In short, data loss leads to:

Low employee morale leading to job stagnation. This further leads to lack of focus and commitment resulting in low employee morale.

Loss of revenue

Declining performance and production

Lack of workplace flexibility

Loss of financial stature within the business arena

Loss of goodwill and financial credit status

Small Manufacturing Enterprises (SME): Data loss hits small manufacturing enterprises hard. A recent survey by Ontrack in 2002 uncovered that data recovery programs are usually purchased by manufacturing companies. The reason often cited for the frequency and magnitude of these data losses is data concentration. It is difficult for small manufacturing companies to store crucial data at remote sites offsetting the impact of man-made and natural disasters. Small manufacturing firms are prone to data loss 25% more than automobile companies. These manufacturing firms suffer from data hacking and computer failures due to electrical surges.

Fashion Industry: The third largest storage consumer of data is the fashion industry. The loss of data in one fashion firm paralyses the entire network of UK fashion industry. In short, the impact is catastrophic and intangible.

Loss of revenue

Data sharing

Loss of privacy

Production suffers as employee commitment and focus slips

Data Security

The volume of crucial organisational data has suddenly made companies extremely vulnerable in terms of storage equipment. A company is faced with data privacy loss as it exposes data to vendors, shareholders and customer networks. Thus, data security has become paramount as the impact of data loss filters to every organisation chain resulting in permanent closure of the company.

RetroData: It is an organisational data security package having a level of security and another of retrieval. In other words, organisations can use this application as a preventive measure to protect data and also to use it for data recovery in the event of its loss. Thus, it strives on human data security and hardware security such as confidential passwords, automatic data lock systems and screening systems. It has the ability to recover data from memory cards to workstation drives, RAID arrays and mass storage devices.

Backup: The Data Protection Act makes it compulsory for all companies to back up every small bit of data. Organisations usually employ three types of backup: