Why Is Data Protection Important to the Enterprise?

There are several reasons for spending money, time, and effort on data protection. The primary one is minimizing financial loss, followed by compliance with regulatory requirements, maintaining high levels of productivity, and meeting customer expectations. As computers have become more and more integral to business operations, data requirements from regulators such as the U.S. Securities and Exchange Commission (SEC), as well as from customers, have been imposed on businesses. There is a clear expectation that important data be available 24 hours a day, 7 days a week, 365 days a year. Without a working data protection strategy, that isn't possible.

The single most important reason to implement data protection strategies is fear of financial loss. Data is recognized as an important corporate asset that needs to be safeguarded. Loss of information can lead to direct financial losses, such as lost sales, fines, or monetary judgments. It can also cause indirect losses from the effects of a drop in investor confidence or customers fleeing to competitors. Worse yet, stolen or altered data can result in financial effects that are not known to the company until much later. At that point, less can be done about it, magnifying the negative results.

Another important business driver for data protection is the recent spate of regulations. Governments throughout the world have begun imposing new regulations on electronic communications and stored data. Businesses face dire consequences for noncompliance. Some countries hold company executives criminally liable for failure to comply with laws regarding electronic communications and documents. These regulations often define what information must be retained, for how long, and under what conditions. Other laws are designed to ensure the privacy of the information contained in documents, files, and databases. Loss of critical communications can be construed as a violation of these regulations and may subject the corporation to fines and the managers to legal action.

A third driver, which does not get the attention of the press but is important to organizations nonetheless, is productivity. Loss of important data lowers overall productivity, as employees have to deal with time-consuming customer issues without the aid of computer databases. Data loss also results in application failures and similar system problems, making it difficult for people to do their jobs. A poor data protection strategy may leave people waiting for long periods of time for systems to be restored after a failure. During that time, employees may be idle or able to work only in a reduced capacity, further diminishing productivity.

The demands of a 21st-century business are such that customers expect the business to operate at all times. In an increasingly global economy, downtime is not tolerated by customers, who can readily take their business elsewhere. The inability of a business to operate because of a data loss, even a temporary one, is driving many businesses to deploy extensive data protection schemes. It is not only the e-commerce world that experiences this situation. All types of businesses including health care, financial, manufacturing, and service operate around the clock, or at least their computer systems do. Even when no humans are around, computers are available to take and place orders, send orders to the warehouse, and manage financial transactions. Data protection strategies need to take into account these 24/7 expectations.