Some interesting facts and figures surrounding the current ash cloud crisis in Europe and the cost it is causing to business. Here are some numbers:
- British Airways: £15m to £20m a day in lost business
- TUI Travel: £5m to £6m a day
- IATA: Industry costs of up to £165m a day
Some of the numbers mentioned are staggering, but it does give an indication of what a devastating effect natural causes can have on a business. You can expect to insure against this sort of eventuality, but the premiums would be astronomical. And then bring to bear the human cost of what could happen once companies start failing and jobs are lost and you begin painting a really bleak picture. It may not be as bleak as the current mesothelioma survival rate, but it still pretty ugly.
Have you been affected by the volcanic ash?
We’ve all seen the disastrous consequences of the earthquake in Haiti and it’s nice seeing the response of individuals and communities doing their part and contributing donations and funds to the victims. The corporate world has also been chipping in and we’ve seen donations by Coca Cola and Bank of America of $1 million apiece. Donations by UPS, Walmart and other organisations are also contributing to this pile.
Of course, it’s easy for the corporate world to appreciate the hardship natural disaster can cause. You only need to talk to owners of New Orleans hotels french quarter to get a feel of how helpless once can feel in these circumstances. Business is all about understanding what risks you are exposed to, but sometimes something comes out of left-field that you would never expect.
What’s the worst thing that can happen to your business? If you don’t know, it’s worth thinking about the question for a few minutes, as it helps you focus on what risks your business may be facing. And I’m not talking about day-to-day mishaps, but the catastrophic ones that can kill or main your business.
These scenarios vary from business to business. In today’s world a lot of organisations are data driven, so the loss of their data could be catastrophic. Other organisations are less dependant on data, and more dependant on customer factors, whether it’s sentiment or footfall. Yet others are dependant on source materials and factors of production. The risks will vary from industry to industry, but not being aware of what they are can be disastrous.
If you know what the risks are, you can mitigate against them. Whether it’s a matter of investing in online backup solutions, or making sure you have reserves to cope with a downturn; or having alternative markets you can tap; measures can always be put in place to minimise the impact of one of the risks occurring. But you need to understand those risks to make sure you have the right mitigations in place. So, don your thinking cap, and make sure you’re looking at the big picture.
A website can be a great shopfront for your organisation and every day, new companies join the foray of offering online goods for clamouring online customers. But an online store front needs to be robust, it needs to be designed to run 24×7 .. and it sets new expectations for your organisation to aspire to.
The last few hours have been pretty eventful for the web delivery team down at Sainsbury’s for example. The online store “died” yesterday, and any orders that were booked for today will not be arriving. Instead, customers are being presented with a picture of some lemons and an apology; customers who are missing their deliveries have been contacted and promised a £10 voucher for the trouble.
There are rumours that the problem was caused by a fire in a nearby building, but there’s been no official confirmation of that. The bottom line is that someone screwed up. Whether it was because there were no DR facilities planned that could come into effect, or no backups of the data for orders to be re-instated, the truth of the matter is that Sainsbury’s has been left with a number of disappointed customers who will certainly rethink their positions before placing their trust in the company’s website once again.
I think the damage control probably wasn’t handled too badly. offering customers compensation is a smart move that can help contain the story and reduce the impact of the damage; but I’d be curious to find out what sort of risk profiling had been carried out on their online facility, how much lost revenue this downtime translates into and the overall impact on their customer retention figures. One thing I can say, I’m glad I’m not the person responsible for the outage!