The Hidden Costs of Not Having a Proper Data Backup Strategy

Imagine losing all your business data with no backups or recovery options available. It’s a nightmare scenario, but without a proper backup plan, it’s a very real risk.

The hidden costs of not having a reliable backup plan in place are real and far-reaching—from unexpected revenue loss to massive damage to your brand’s reputation.

These aren’t just short-term problems. They can have long-lasting effects that any business would struggle to recover from.

This guide will uncover the risks of not having a proper backup strategy in place and lay out some examples of how it has affected real-life companies.

We’ll also explore how you can devise a backup strategy for your business today and avoid the same pitfalls, keeping your valuable company data safe and secure at all times.

Consequences of not having a backup strategy in place

Not prioritising a backup plan for your data can lead to some serious repercussions, including:

1. Operational setbacks: Disruptions and compliance issues

Operational disruptions are a major issue caused by the lack of a backup strategy. Without backups, critical business processes grind to a halt.

Production is delayed, customer service is interrupted, and deadlines are missed. These problems can ripple through the supply chain, leading to even more issues.

Employee productivity also takes a hit during a data crisis. Instead of focusing on essential tasks, teams are forced to scramble to recover lost data or rebuild systems.

In addition, many industries enforce strict data management regulations. Inadequate backups can lead to non-compliance, exposing businesses to hefty fines, legal issues, or even complete suspension of operations.

2. Financial impact: Revenue loss and recovery costs

The financial impact of not having a backup strategy in place can be significant. When data is lost or corrupted, businesses often face revenue losses from downtime. During this time, customers aren’t able to make any purchases which means missed sales opportunities.

The longer operations are paused, the more revenue slips away. Sadly, some businesses struggle to ever recover from the financial damage.

And recovering lost data can be expensive, too. Businesses might need to hire recovery services or pay ransom fees in the event of a cyberattack.

3. Reputational damage: Loss of trust and brand image

Customers, partners, and stakeholders expect businesses to keep their data safe. When a company fails to do so, that trust is tested.

For example, customers might reconsider their relationship with the company, leading to a loss of business. And the negative publicity from such an incident can damage the brand, making it much harder to attract new customers and partners.

This loss of trust can even reach investors and shareholders, potentially affecting the company’s stock price and long-term stability.

Real-world examples: The negative effects of not having a backup strategy in place

The consequences of not having a backup strategy in place are very real—and we have a few real-world examples of businesses who’ve had to learn it the hard way. Learn from these businesses, and don’t let their stories become yours!

The NHS phishing attack

In 2017, a large-scale phishing attack which later became known as “WannaCry” hit the United Kingdom’s National Health Service (NHS). The attack impacted several hospitals and other organisations within the healthcare network.

The attackers sent fraudulent emails to staff, posing as legitimate communications, and successfully tricked employees into providing sensitive login details.

With this unauthorised access, the hackers were able to breach confidential patient information, disrupt vital healthcare services, threaten patient privacy, and potentially jeopardise patient safety.

The aftermath of the NHS phishing incident was extensive, leading to treatment delays, major disruptions in patient care, and a decline in public confidence in the NHS’s ability to safeguard sensitive data.

The Maersk ransomware attack

In 2017, global shipping giant Maersk experienced a devastating ransomware attack due to insufficient backup strategies. The attack caused widespread disruption to their operations, leading to an estimated $300 million loss.

This incident underscored the financial risks and vulnerabilities of inadequate data protection measures.

The Musey data loss incident

In 2019, California startup Musey Inc., known for its interior design app, suffered a significant data loss event. All their crucial business data was stored in Google Workspace and was lost when an administrator accidentally deleted the main account instead of a test user.

Despite immediate efforts to contact Google support, the data was permanently lost. This simple mistake led to a $1.5 million investment loss from venture capitalists, family, and friends. As a result, Musey was forced to shut down its operations.

Creating a backup strategy

Now that you understand the repercussions of not having a backup strategy in place to recover data, let’s look at the key elements you need to include in your own backup plan.

1. Regular data backups

Safeguarding your business from the costly fallout of data loss starts with taking proactive steps. Making regular backups a habit is your best defence..

By consistently backing up your data, you’ll have a fresh, reliable copy of your information ready to restore at a moment’s notice—even in the face of unexpected events like cyberattacks, hardware failures, or human errors.

2. Disaster recovery

But regular backups are just one part of the equation. A comprehensive disaster recovery plan is equally essential.

This plan outlines steps your business can take to recover from a data loss incident quickly, minimising downtime and keeping your operations running smoothly. It should include details like who’s responsible for initiating recovery efforts, how data will be restored, and the timeline for getting systems back online.

3. Third-party backup solution

Regularly backing up data stored on a cloud service to an external location outside the cloud platform is essential for added security. This is where third-party backup solutions come in, offering an additional layer of protection and guaranteeing swift disaster recovery.

Consider the following when choosing a third-party backup solution:

• Reputation: Choose a provider with a strong reputation and plenty of positive reviews.
• Security: Make sure they always use strong encryption to protect your data.
• Compliance: Verify they meet industry regulations like GDPR to avoid legal risks.
• Privacy: Opt for a provider with clear policies on handling and protecting your data.
• Disaster recovery: Confirm they have reliable disaster recovery systems in place to minimise downtime.
• Scalability: Backup data with a cloud storage provider that offers unlimited storage space and can grow with your business’s needs.

Secure your critical business data with BackupVault

Strengthen your data backup strategy with BackupVault, a dependable cloud backup solution provider offering unlimited data storage and bulk recovery for your organisation.

At BackupVault, we’re dedicated to protecting your data and ensuring uninterrupted business operations. Our commitment goes beyond data storage—we safeguard your critical information and promise easy data recovery whenever you need it.

As a vendor-independent solution, we offer cloud backup services from four major vendors: Acronis, AvePoint, N-Able and Redstor. We are able to protect all the major systems, including: Microsoft 365, Google Workspace, Microsoft Dynamics, Salesforce, physical servers and virtual environments.

With over two decades of proven success, BackupVault has earned the trust of countless organisations worldwide. We’re proud to be a leading provider of reliable data backup and disaster recovery solutions.

Make BackupVault a key part of your backup strategy. Sign up for our 14-day free trial today.