Why are SMEs spending more on business continuity tools?
Business continuity is hugely important for any enterprise. It provides them with reliable and well-thought-out plans for dealing with potential risks – from cyber attacks to fires to a key member of staff unexpectedly leaving an organisation – while continuing to deliver products or services at acceptable predefined levels.
Business continuity is particularly key for SMEs
Of course, considering and planning for eventualities such as these is simply good practice for any business, but for smaller firms it becomes all the more important. A major incident – such as a flood – at one property is unlikely to have disastrous consequences for a large multinational corporation, but for an SME it could mean they struggle to survive. Indeed, the Association of British Insurers claims that as many as four-fifths of small firms forced to stop trading for a period due to issues like flooding ultimately end up going out of business within 18 months of the incident.
Fortunately, it seems SMEs are well aware of the potentially seismic problems that could stem from any failure to be prepared for such a disaster. New global research from Carbonite and the International Data Corporation reveals that four-fifths of small and medium businesses currently using business continuity solutions are thinking about making improvements to their strategy, while nearly three-quarters are expecting to invest more in business continuity over the next 12 to 24 months.
What business continuity solutions are favoured by smaller firms?
IDC discovered that the typical small or medium-sized enterprise has adopted three or four solutions in a bid to safeguard continuity, with different solutions favoured for different applications.
Two-thirds of the 700 respondents used on-site data backup, although SMEs look to be moving towards cloud or hybrid strategies to ensure their operations are able to continue in the event of a disaster. Backup-as-a-service and recovery-as-a-service tools have so far been adopted by 29 per cent and 21 per cent of small businesses respectively, but significant growth is expected in these segments.
The majority of smaller businesses reported an annual IT budget of up $20,000 (£12,800), with those that invest in business continuity choosing to allocate up to 14 per cent of this amount to continuity measures.
What is prompting SMEs to invest in business continuity?
Unsurprisingly, the overwhelming majority of small businesses surveyed said they were prompted to spend on business continuity by the possibility of disruption to their operations. More than three in four respondents cited the threat of downtime as the single biggest driver of their investment.
Being unable to deliver an acceptable level of service for unexpected or unplanned reasons can cause significant damage to a firm’s reputation with customers, partners and suppliers, while the impact on productivity and profits can be even more striking. Indeed, for SMEs, the average cost for a single hour of downtime ranges from $8,220 to $25,600 (£5,300 to £16,400) – a statistic that becomes even more daunting when considering that a typical unplanned event can last for as long as 24 hours.
Mohamad Ali, president and chief executive of Carbonite, said: “When it comes to disaster recovery, the stakes are higher for small businesses.
“SMBs realise that a business continuity solution can mean the difference between staying in business or losing everything they’ve worked for, and the data shows they are investing accordingly.”
Our Market Reports combine our review of the prevailing conditions in the risk management recruitment market together with the results of our 2015 employer survey.