Business continuity statistics or scaremongering?

Business continuity numbers can be impressive: $200 billion for damages caused by Hurricane Katrina in 2005, including the disruption to businesses because of destruction of facilities and displaced employees. Then there are the fabled “60-70-80%” statistics that typically look something like this: “70% of companies go out of business after a major data loss”. Yet there are two problems with these numbers. Impressive though blackouts and hurricanes may be, they can’t account for all business interruption.

Images of floods, fires and power reactor explosions are all good for getting attention. Somehow, a semiconductor failing inside a disk drive and stopping it from functioning doesn’t have the same pizazz, even if the disk drive has business critical data on it. However, what are the chances of Hollywood-style disasters hitting your business? When it comes down to instances where companies need to execute on their business continuity plans, fires, floods and similar disasters account for as little as 6% of business disruption. The rest, 94%, is then due to IT problems, purely and simply.

That statistic comes from a business continuity company called ICM that counted the number of times it handled BC plan invocations for customers affected by an IT problem, compared to the number of times other disasters were to blame. It should therefore be verifiable. Other quoted statistics of the “60-70-80%” kind however are not. The example cited in the first paragraph of this post was given by a different company that attributed the quote to the British Government (Department of Trade and Industry). The quote appears to be unverifiable. Scaremongering to advance the cause of BC might be covered by a policy of “the end justifies the means”, but doing it without verifiable statistics may simply backfire in the long run.