Real-Life Examples of Business Continuity Plans That Failed

No matter how careful you are, disaster can strike your business at any time. Without a proper recovery strategy, you may not know how to get your business running again – which is why 40% of SMBs fail after a natural or man-made disaster. 

To avoid becoming another statistic, here’s what you can learn from businesses that failed to plan properly for disasters. 

Business continuity planning

In simple terms, a business continuity plan is what you’ll follow to ensure your company stays operational when a natural disaster or some other crisis affects your business. 

Business continuity planning is at the cornerstone of any successful SMB – fail to prepare for a disaster, and be prepared to fail. Given that downtime costs the average US-based SMB around $100,000 per hour, it may be impossible to recover from a disaster if you’re under-prepared. 

The most common reasons why business continuity plans fail

Not all business continuity plans are created equal. Some of the most common reasons why business continuity and disaster recovery planning fail are: 

  • Failure to properly assess risk, particularly when it comes to cyber attacks
  • Never testing the business continuity plan – despite the risks posed by an insufficient disaster recovery strategy, 23% of SMBs are still failing to test their plan
  • Incomplete or unclear strategies
  • Ineffective data backup and recovery strategies

Real-life examples of failed business continuity plans

In order to fully appreciate the value of an effective business continuity plan, it’s helpful to take a look at where real businesses went wrong. 

Delta 

Back in 2016, Delta suffered a critical IT infrastructure outage. There was a severe delay in the backup systems kicking in, which cost the airline over $100 million dollars in lost revenue – not to mention the reputation damage. 

The disaster could have been prevented if Delta had an effective data recovery strategy in place and responsive, modern backup systems. 

California DMV 

The California DMV suffered a serious headache in 2016 when both the backup systems went offline at the same time. The systems went down simultaneously because they ran alongside each other rather than through separate power sources. 

Due to this failure, Californians couldn’t visit the DMV for several days, causing serious reputation damage that any small business would struggle to recover from. 

Breazeale Sachse & Wilson LLP

When Hurricane Katrina affected this law firm back in 2005, the staff members lost access to confidential client information and necessary business data. This happened because they had no data backup strategy and they kept everything on a hard copy on site. 

After the hurricane forced the law firm to shut its critical servers, they realized that they had no plan in place for contacting clients and reassuring them that the firm was still operational. It’s by sheer luck that the firm survived the ordeal, and now, they have an effective backup and remote communication strategies in place.

This is a great example of how a small business almost failed because they didn’t perform proper risk assessments or understand what their operational priorities were. 

What we can learn from failure

When it comes to disaster recovery, security, and business continuity planning, there’s no such thing as being too prepared. Test your business continuity plan before disaster strikes, and always re-evaluate your strategy if there are any shortcomings. For more information on effective business continuity planning and disaster recovery, contact us now.