The cost of not being prepared

We’d all agree that our memories of the last few years will stick with us for a long time. While Australia is a remarkable country, we’re also vulnerable to disaster – from bushfires to drought to storms and floods. As of 2020, we were one of the top ten nations in the world for economic damage caused by disasters.

In 2021 alone, natural disasters cost the Australian economy $38bn, and that jaw-dropping figure is predicted to rise to $73bn per year by 2060. While we can’t stop events such as the 2022 floods or the COVID-19 years, we can (and must) focus on mitigating their impact on our business, employees, customers, and partners.

Of course, as we keep reminding you, we’re also a prime target for cybercriminals. While not a natural disaster, the wave of cybercrime has become an unstoppable force of nature in its own right.

Let’s have a look at some of the most significant disasters down under over the last few years and their impacts.

In February 2022, eastern Australia endured three intense weather systems. The record rains and flooding that followed resulted in Southern Queensland and parts of New South Wales each receiving over a year’s worth of rainfall by the end of the first week of March.

The financial impact on the regions was significant. An independent Deloitte Report on the floods revealed an estimated total cost of $7.7 billion to Queensland alone due to damage to residential, commercial, and public infrastructure, road and public transport closures, industry disruption, emergency response and clean-up, and environmental factors. The report noted, “The economic impact on Queensland small businesses was significant with more than 4500 affected and total damage of approximately $324 million.”

For those businesses forced to close temporarily or relocate due to the flooding, their disaster recovery plans were tested to the max. Under pressure to move physical assets to higher (and drier) ground and implement flood barriers, they had their hands full. In many cases, neither employees nor customers could get to the premises, and returning to business as usual, let alone continuing day-to-day operations was near impossible without easy remote access to business systems and data.

Despite the ‘19’, the COVID-19 pandemic began for Australia in early 2020. In all fairness, after all the scares about bird flu and the like, COVID-19 and its genuine personal and business impact was hard to second-guess at the time.

Teams and Zoom were in use, but COVID sent them skyrocketing to the top of the popularity charts. There was more to working remotely than that, though. Processing orders and generating invoicing still needed to happen, payrolls needed to keep rolling out wages and salaries, customer proposals and quotes needed to be prepared, customers kept happy, and everyday services delivered. For those who couldn’t access their line-of-business applications and had to rely on a skeleton staff of essential workers, it was a well-documented nightmare.

The Australian Bureau of Statistics (ABS) reported a loss of 577,000 jobs between March and May 2020 alone. More than half of those losses came from small business owners, many of whom had to close their doors due to government restrictions on movement. While the final number of COVID-created closedowns hasn’t been officially announced, financial experts predict the wave of business closures will continue for some time.

The pandemic underscored the importance of having a flexible disaster recovery plan that allowed businesses to adapt to or pivot to meet unforeseen events. Those who could rethink how they work and move to a remote model for their employees (and cover the gaps left by those who were ill) were far better positioned to weather the storm.

The media labelled the Black Summer a ‘megafire.’ It was one of Australia’s most intense and catastrophic fire seasons on record, with tragic fatalities, a sadly decimated wildlife population, and the loss of homes and businesses. It almost instantly ripped $2.8bn from our tourist economy and an estimated $4-5bn from agriculture. Even supply chain businesses in areas unaffected by the fires were affected.

In its 2021 report on the Townsville floods and Black Summer bushfires, insurer IAG said, “On average, between 65% and 72% of total economic impact on businesses from the floods and bushfires is attributed to small businesses.” They made the telling observation that small businesses don’t always realise that the cost of business interruption can be as high as – if not higher – than the direct damages.

Being large is not a place of safety either. In May 2020, Toll Group, a large Australian logistics company, suffered two major cyberattacks that forced it to shut down many systems across multiple sites and business units. The ransomware attack disrupted Toll’s operations and caused significant delays in deliveries. People on both sides of the Tasman were apprehensive due to their reliance on couriers for food and other essential deliveries from online purchases during the COVID-19 lockdowns.

Toll Group’s estimate of ‘several months’ to recover from the incident proved true. However, the time taken to investigate the problems and bring services back online added to their woes, causing some of its biggest customers to take their business to rivals.

The incident highlighted the importance of having robust cybersecurity measures in place and a comprehensive disaster recovery plan to ensure business continuity in the event of a cyberattack.

These recent disasters from our own backyard demonstrate the high cost of being unprepared. When you fail to invest in disaster recovery planning, you risk financial losses, reputational damage, and even permanent closure.

So, what can you do to make sure that you’ve maximised your ability to protect your business when under fire from Mother Nature or cybercriminals? And of course, to ensure you can recover quickly?

With a comprehensive disaster recovery plan and the technology needed to protect you and help you pivot, you can minimise downtime, mitigate the impact of disasters, and ensure the continuity of day-to-day operations. So, you’re back on your feet faster – which is great for your employees, customers, and community.

Find out more. Give us a call at The Big Colton.