How Data Loss Can Impact Your Business and How to Prevent It
Published: 2019-07-31 13:49:31

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<figcaption>Image by Gerd Altmann from [Pixabay](https://pixabay.com/illustrations/data-data-loss-missing-data-process-2764820/)<figcaption>

I find it appalling that after a disaster, such as a data leak or data loss event, [93% of businesses](https://www.sherweb.com/blog/security/statistics-on-data-loss/) don’t recover and close within a year. In the event of a disaster, having a backup of your files will allow you to recover the data and minimize loss. 

If data loss does occur, the impact on your business will depend greatly on the quantity and quality of the affected data, as well as the strength of your disaster recovery plan. Read on to learn more about how data loss can impact your business and tips and tools to prevent it.
 
## How Data Loss Can Impact Your Business 
The amount of data in the world is increasing exponentially, and the need for backing up all this data in several locations is crucial. If you are not performing daily backups, your risk of losing valuable data are high. The impact of a data loss event can be felt in every aspect of the organization, and the severity will depend on a great measure, on the effectiveness of the data recovery plan. 

Some of the effects of a data loss event are as follows: 
* **Disrupts productivity**—organizations that lack a solid data recovery plan will take a hit in productivity, since there were processes left incomplete for lack of documents and resources. Moreover, the organization needs to redirect employees to recreate lost data instead of doing other tasks.
* **Damages reputation**—many cases of data loss involve losing data from clients, usually sensitive data. This impacts negatively on your reputation, with clients leaving your service as they view your business as unreliable. 
* **Sales loss**—most organizations depend on data to run the sales process smoothly. In the event of data loss, for example, an ecommerce website could be rendered inoperative, losing thousand of dollars in potential sales. Users cannot make purchases until data is restored. 
* **Going out of business**—in the event of severe data loss, for example, a company losing its data center for ten days or more, over 93% of companies don’t survive. This is the consequence of not having a backup and recovery plan. After a data loss disaster, it may take weeks to restore operations, and in that time companies still need to face payroll and other payments even when not generating any income. This results in many organizations eating their available capital, most of them not able to recover from the hit. 
## Causes of Data Loss
The causes of data loss can be from natural disasters to hard drive failure or malicious activity. 
* **Hard Drive failure**—wear and tear can cause a hard drive malfunction, and a decrease in performance is a clear indicator the hard drive is close to fail. At this stage you should transfer the data to a new hard drive before the first one fails. 
* **Hard Drive formatting**—mistakenly formatting the hard drive is a common cause of data loss. Because certain applications require formatting the hard drive before installation, it is important to have a backup done beforehand. 
* **Power outages**—[20% of companies](https://cdn2.hubspot.net/hubfs/3152806/Stealth%20Software%20May%202017%20Theme/PDF/Disaster%20recovery%20preparedness%20benchmark%20survey%20-%20Version%201.0.pdf?t=1495688843930) experience data loss as a result of sudden power outages. A good hosting provider and a generator can minimize the data loss as you can shutdown manually the network to control that all data is saved. 
* **Human error**—many data loss events are the result of an employee deleting data without noticing. Having a backup in place ensures restoring the documents with ease. 
* **Malicious attacks and malware**—external attacks as malware and unauthorized access can result in stolen data used to commit fraud against your organization or clients. Moreover, internal threats are more common everyday, with rogue employees accessing the network and causing internal damage or stealing sensitive data. One solution is to limit to the minimum employees access to data. 

Having a Data Loss Prevention solution in place can help prevent most of these issues, as we will explain in the following sections.
 
## What Is Data Loss Prevention?
Data Loss Prevention (DLP) is the process to ensure that users don’t send sensitive or critical information outside the network. DLP solutions are software products helping organizations to control the data that users can transfer. 

DLP solutions classify and protect confidential and critical information from leakage from unauthorized users. As insider threats continue growing, regulations are becoming stricter about data access requirements. Some DLP tools also can filter data streams protecting data while in traffic. 
 
## How a DLP Solution Can Shield Your Business from Disaster Impact
Implementing a DLP solution starts by monitoring the organization’s data. Determining which is the critical data to protect, establishing rules to protect it and protocols to update the plan are key elements for a successful Data Loss Prevention plan. It is important to involve all relevant stakeholders and permeate a data protection culture across the organization. 

A Data Loss Prevention (DLP) software classifies the confidential and sensitive information of an organization, detecting policy breaches. DLP software often comes with built-in policies reflecting compliance with standards such as GDPR, HIPAA, or PCI-DSS. 

Therefore, once the DLP software detects the breach, takes protective measures such as alerts, data encryption and isolating compromised data. DLP solutions work as endpoint monitoring solutions, protecting data at rest, in use and in traffic. 

Installing a [DLP solution](https://www.exabeam.com/dlp/data-loss-prevention-policies-best-practices-and-evaluating-dlp-software/) requires best practices, such as incident response processes as mentioned in this article. 

That being said, installing a DLP solution is not a magic medicine, and there are some limitations to the technology: 
* **Rich media**—DLP tools cannot parse and classify rich media content such as images and video. 
* **Encryption**—These solutions can only examine encrypted data that they decrypted before. DLP tools cannot detect data encrypted with keys unavailable to the DLP system operators. 
* **Mobile**—a DLP solution cannot track some types of mobile communication such as messages from a private user’s mobile. 

There are three main types of DLP solutions:

**#1. Network DLP**
It is attached to the data points on the network. This solution monitors, tracks and reports on information traffic passing through ports. Protects web applications, emails and FTP processes, since lives in the network. Keeps a database detailing data usage and access.  

**#2. Storage DLP**
Controls the information shared and retained by employees, alerting about the leakage vulnerability of it. Provides information about on-premise and cloud storage. 

**#3. Endpoint DLP**
Due to the ever increasing number of endpoints across organizations, such as workstations, laptops, smartphones and tables, the risk of data leakage has increased accordingly. This solution provides agents in all endpoints to monitor and prevent leakage of sensitive information.  

## The Bottom Line 
A data loss event can prove a real disaster for any organization, putting at risk their very survival. Having a good disaster recovery plan as well as incident response plan is important, but sometimes it is not enough when facing the loss of sensitive or third-party data. A Data Loss Prevention tool can help prevent and minimize the damage, effectively improving the chances of bouncing back after a disaster event.