Risks of Not Having a Disaster Recovery Plan


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Although a growing number of businesses, both large and small, are becoming aware of the need for disaster recovery plans, the vast majority are still falling short in preparedness. Research indicates that 60 percent of organizations don’t have a fully documented disaster recovery plan, while 40 percent of those with a plan admit that it isn’t very effective when a disaster does strike.

With so many companies downplaying the need for a full-fledged disaster plan, it might sometimes seem that your own organization can get by without one, right? Unfortunately, a company that is not prepared for potential disaster faces a wide variety of risksLet’s take a look at some of the ways a lack of disaster recovery planning can be disastrous to any company.

Failure of IT Systems

These days, IT systems are a critical part of any business, from small mom-and-pop stores to large multinational corporations. Regardless of the nature of your business, protection of your IT assets and capabilities should be near the top of your disaster recovery priorities.

Having a disaster recovery plan for your IT systems isn’t just about keeping computers and other hardware safe; it’s also about protecting your ability to provide customer service, to fulfill product orders, keep your website running, and perform any other business-critical task that is made possible by IT.

Not only are IT systems vital to a wide range of business operations, but they can also be relatively susceptible to disaster. Consider the following IT risks:

Human error

People make mistakes, which is part of the reason why viruses and spyware are still so successful. It only takes one employee accidentally downloading a harmful file to compromise your entire organization.

IT systems sometimes fail

Just like all technology, computers, software, networks, and other IT systems are vulnerable to failure. Not preparing for these inevitable problems—through important steps such as cloud-based storage or on-site data backup—puts you at significant risk.

Ever-evolving hacking techniques

If a criminal is going to attempt to infiltrate your company, in many cases, it’s more likely that he or she would hack into your IT networks rather than walk through the front door. For most modern businesses, protecting your company starts with safeguarding IT systems.

Wide-Reaching Consequences

When a disaster strikes an organization that has not developed a recovery plan, the effects can be disastrous. The consequences of being unprepared can take several different forms:


A variety of disasters can impact your company’s ability to operate effectively. Imagine which departments and capabilities would be hampered by a flood in your facility. How would your workers manage to do their jobs? How long would it take for customers to be impacted by the operational slowdown? Crises like this can have a ripple effect, gradually impacting all areas of a business in ways that you may have never imagined.


Most disasters will cause some amount of financial loss. But if your leadership team and employees have to scramble to respond, the business is more likely to lose a lot more money. And the cost of a business-impacting disaster is only increasing. For example, IBM found that in 2016 there had been a seven percent increase in the total cost of a data breach, with a single breach costing U.S. businesses an average of $7.01 million. Other potential crises can be just as costly. It’s no wonder that many companies never recover after being hit by a significant emergency.


Of course, a company can also be hurt in indirect ways, such as when the poor handling of a disaster leads to a damaged reputation. In recent years, we’ve seen real-life examples of this in a wide range of crises, such as the Volkswagen emissions scandal and news of Wells Fargo’s fraudulent customer accounts. Reputational damage can impact your bottom line while also hampering future investment, turning away quality employees, and causing other harm—sometimes for years to come.  

No Company Is Immune

Owners and business leaders at some organizations may have themselves convinced that the above risks do not apply to their business. Maybe your company is small and streamlined, or maybe it operates in an industry with relatively low risk. You might think that your facilities and systems are inherently safe.

However, even “safe” industries and facilities are vulnerable to certain threats, such as human error, severe weather, and electrical or hardware failure. And the chances of a significant business-impacting event occurring in a given year should make you sit up and take notice: The Disaster Recovery Preparedness Council found in a survey that, in the previous year, 36 percent of organizations had lost one or more critical applications or data files for hours. One in five companies lost critical applications for a period of days, outages that cost anywhere from a few thousand dollars to several million.

However, developing a disaster recovery plan can help mitigate these risks and encourage your company to bounce back more readily from potential crises.

Cloud-based crisis management platforms and mobile apps make disaster recovery planning easy for businesses of all sizes while enabling a faster, more streamlined response by providing vital information directly to the people who need it most. As a result, your business is better prepared to take on the challenges that it is sure to face at one time or another.

Audit Your Disaster Recovery Plan