3 types of Technology Risk (and what to do about them). Post 3 of 3

by Michael Anderson

August 20, 2010

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In this series, we’re looking at the different types of technology risk. Our last post covered Unauthorized Access to Corporate Information, and the need for well-managed access policies. A recent study indicates that 30% of departing employees would take corporate files with them – protecting your corporate data is absolutely critical.

Today’s topic…

3. Loss of Use / Downtime

I would argue that our third technology risk is both a) the easiest to protect against; and b) the most costly.

Downtime can range on a wide spectrum in terms of severity – from temporary loss of use of an application or device to a catastrophic system failure.

The reason for the high cost of downtime is that it impacts the highest cost in any business – labour. The internet is full of tools and calculators to help you determine the true cost of downtime in your company.  The basic formula is this:

Cost of downtime = Outage hours * (Lost productivity + Lost revenue)

At 365, we believe companies can protect themselves against the risk of downtime by practicing the 2 Rs:  Redundancy and Recovery.


Companies can greatly reduce their risk of significant downtime by identifying the critical failure points in their network, and building redundancy in these areas.

For example, many small businesses have moved to hosted applications to run their operations.  These hosted applications offer low up-front costs in exchange for a monthly fee.  However, they have an inherent risk being delivered over the Internet – any disruption to the company’s internet connection results in immediate loss of use of the application.  By installing redundant internet connections on different providers, companies can effectively eliminate this risk for far less than the cost of potential downtime.

We recently worked with a new client who did not have redundant power supplies on their Email server.  An unexpected failure resulted in corruption of their email database and loss of use of their email application for a day and a half.  By installing redundant power supplies, and proper backup power, we have eliminated the risk of a similar outage in the future.


Redundancy can’t prevent every outage, and downtime can still happen (albeit rarely).  Companies can greatly reduce the cost of any such downtime by reducing the time to system recovery.

Some basic practices which can reduce the time to system recovery are:

– Have a data backup solution which allows immediate data access and restore (365Backup is an example)
– Have cold spares of mission critical hardware on hand (workstations / firewalls / switches)
– Have an offsite disaster recovery plan in place

As with most risks, an ounce of prevention is worth a pound of cure.  Companies who take proactive measures in the areas of redundancy and recovery can significantly reduce the risk of loss of use / downtime, and the corresponding costs of lost productivity and revenues.

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