When starting up a business, most entrepreneurs give IT little consideration beyond having the basic infrastructure in place. However, IT needs to be a key aspect of any business plan: major brand failures in 2012 have demonstrated the critical dependence of business on IT.
It is reported that on average, European businesses are losing £200,000 per year through IT downtime and data recovery. O2, RBS, the BBC and RIM are just a handful of companies to have suffered from major technical glitches in 2012, causing disruption and chaos for customers who are increasingly dependent on an instantaneous service. Indeed, a company’s visibility and reliance to be online has never been more critical to its reputation.
Derek McManus, O2’s chief operating officer, admitted that the IT network faults last summer and again in October had ‘dented’ the confidence and trust of some of its customers.
For RBS, 12 million customers were affected by a failed software update in June 2012 and it was reported that the company has paid out up to £100 million in compensation. But the company’s troubles didn’t end there – Santander cited poor technical infrastructure as a reason for pulling out on the purchase of 316 branches. After a subsequent technical hitch in October with customers unable to access accounts, RBS is now investing £80 million in updating its IT.
Why reputation matters now
Compared to 2011, the public’s trust in business in the UK dropped in 2012 from 44% to 38%, according to Edelman’s brand barometer.
In 2008, a team of researchers at the national Institute for Physiological Sciences in Aichi, Japan, mapped the neural response to reputational and financial rewards. The outcome of the experiment was that, neurologically speaking, our brains compute reputation to be as valuable as money.
This further emphasises the findings of Weber Shandwick’s 2012 report ‘The company behind the brand: in reputation we trust’. Executives surveyed estimate that on average 60% of their firms’ market value is attributable to its reputation.
Rachel Botsman’s TED talk addressed the advent of a new reputation currency, as people engage more and more in collaborative economies. Asserting, “reputation capital creates a massive positive disruption in who has power, influence and trust”. Today, most businesses will host fundamental elements of their company on IT networks, whether it’s call-centre systems, service- delivery, online booking or ecommerce.
While conversations around trustworthiness continue to focus on how businesses are managing their communications, entrepreneurs must remember to invest inwardly and protect their back-office, ensuring their company is always visible and customers are never left in the dark.
IT as an early warning system
Today, crisis management is as much about IT infrastructure as it is about communications. Make sure you have an IT advisor on hand and that they are monitoring the IT network and keeping you aware of any issues as part of your contingency.
For instance, what is your ‘plan C’? In the unlikely event that you lose your whole data centre and can’t just switch to a different server, you should have a ‘plan C’ up your sleeve. At Paessler, we have a replica of our main data centre on another data centre in a different country and constantly replicate the database and it only takes us a couple of clicks to actually serve the website from the other data centre.
Another vital contingency for your business is a reliable disaster recovery plan. In 2008, Sainsbury’s website went down when metal thieves stole equipment from the retailer’s Internet provider. Web traffic analyst Experian Hitwise recorded 8.36% of their usual traffic going directly to their biggest competitor Tesco and a further 1.38% went to ASDA. There was no way of predicting a system failure such as this, so make sure you have the necessary things in place for your business to remain visible and operational.
By monitoring the status of your systems you will be able to detect any network problems that could affect your business before it’s too late. This includes your IT infrastructure, including all crucial hardware components, your network connections and servers. A network monitoring software can work as an early warning system, providing an instant alert when specific thresholds are exceeded. You can also locate the source of unusual
activity, allowing you to deal with any problem before it escalates and affects customers.
Words by Christine Gebauer, UK Manager of network monitoring specialist Paessler