Let’s assume you’ve been in business for a long time. Let’s assume that is because your company is reasonably profitable and it is supporting at least a comfortable lifestyle for you and your family. If that is the case in Victoria, where it costs a lot to live a comfortable life, you have a very valuable asset in your business that is likely worth hundreds of thousands of dollars, if not millions. It is not unlike the value you have in your home.
And of course you insure your home. How is that purchase decision made? Do you look around your house and see, “Gee, there are a stack of papers there that are close to the baseboard heater. I better get fire insurance.” Not likely. Instead, you just understand there are unknown and inconceivable risks that are very small, but that would have a massive impact on your life. You insure yourself against those risks, even though they are not large or tangible. It is common sense and common practice.
What about IT risks?
When we first explore the average, successful small business or organization, management is usually either currently feeling the pain of IT risks that have materialized into painful costs or they feel that their “systems generally run pretty well. Why do we need you when you cost more than my current guy?” Most of those organizations that are “running well” are the equivalent of your house when it is in the state of NOT being on fire.
Actually, most have the equivalent of those stacks of papers next to the heaters (some have gas and matches stacked up around the heater too). In fact, it is rare that we can’t find a significant ticking time bomb. The most common example is a company’s backup. Sometimes backups aren’t optimal, which pose a small risk, but sometimes it isn’t even functioning. Even if it is, will it continue to? How will you not when it stops working?
We still meet with leaders of businesses that backup all of their irreplaceable business data to a USB thumb drive. This is a bad idea and a significant business risk. Granted, there is still only a small chance that this one risk will result in data loss – let’s just say 1% over the next year. But what does that 1% translate to? I’ve read that 70% of businesses that have a major data loss go out of business. So, do the math for a business worth $500,000: that single cost is $3,500 per year = $500K * 1% * 70%).
Please understand that backup is just one example and I use it here because it is one of the more understandable IT risks. We have many best practices checklists that we review with each of our Alliance clients every month or two. Each checklist has dozens of items that identify potential areas of risk. Indeed, there are many risks to a business and each one of those can have a dollar figure attached to them when a successful, valuable business has not mitigated those risks.
All these risks are hard to make tangible (especially because of the complexity of technology), but I hope you agree that doesn’t make them less real. Real businesses suffer real losses because of the very risks that we fight against. None of that seems relevant/real when everything is generally running well. You don’t need car/home/life/business insurance 99.99999% of the time, but we all buy these things to manage real risks in our lives.
Smart Dolphins believes that we’re doing a great job when our clients do NOT need us. We are valuable in what we prevent as much as for what we enable. We have a really strong belief in what we do and HOW we do it. We are not the cheapest guys in town, but we bring a ton of value for valuable businesses. Some (lots) of that value comes from saving clients from the tangible hassles and costs of their computer network. However, the tough value to recognize is the collective risk we take away by approaching your business like we do. We bring an end result that I believe ANY established, successful (valuable) business needs and can justify if they fully understand their risks.
Help us slaughter wasteful IT risks – share this with a friend who owns a valuable business.