Counting the cost of ineffective business continuity

The report shows that having in place an effective business continuity management programme can spell the difference between organizational resilience and financial ruin. A single incident can cost an organization millions and can rapidly demolish its reputation.

Some of the key findings of the report include:
· According to a recent IBM study on professionals dependent on high-availability IT, the cost of an IT/telecommunications outage can vary from US$1.04 million to US$14.25 million over 24 months. Minor incidents, on average, cost US$53,210 per minute of downtime. Further losses due to reputation-related costs can add up to US$5.27 million for substantial incidents.
· Analysis by the Ponemon Institute reveals that the average cost of data breach and cyber attacks stands at an average of US$11.6 million annually. Organizations report costs ranging from US$1.3 million to US$58 million to resolve these incidents. Case studies reveal staggering losses of up to US$4 billion due to severe incidents of data breach and cyber attack.
· A Munich Re report shows that combined household and corporate insurance payouts for weather-related damage in the United States alone cost US$12.8 billion in 2013. Extreme weather phenomena have increased the severity of damage and value of insurance claims.

Patrick Alcantara, Research Associate at the BCI and author of the report, commented: "The aim of the report is drive home the message that business continuity is not the sole domain of an organization’s BC professional. Ensuring an effective, robust BC programme is also the responsibility of management, budget holders and the rest of staff. In a time where cutting budgets is the norm, it is important to be reminded of the cost of being caught flat-footed in an incident. The false economy created by cutting down on business continuity may create bigger problems that may impact on organizational resilience and viability."