Tech failures causing significant disruption to UK business

Posted on 25 Sep 2015 by Jonny Williamson

Technology and systems failures have caused significant disruption to UK business in the past year and yet few companies are taking the necessary precautions to minimise the risk of any loss or damage, says research by Technology Law Alliance.

The research – which was commissioned with business leaders at more than 200 UK companies – revealed that two thirds (65%) of firms have lost revenue as a result of a technology or systems failure in the past year.

Of these, the majority (44%) said that a key project was delayed or halted as a result. Others reported that they were unable to fulfil a customer order on time (38%) or there was an overall dip in productivity (37%).

Director at Technology Law Alliance – a specialist law firm advising companies on IT contracts, outsourcing and e-commerce, Stephen Ollerenshaw commented: “Technology or systems failures can cause considerable business disruption and damage corporate reputation too.

“Businesses should take a preventative approach by ensuring they have adequate protection in IT contracts. The process of agreeing a robust contract often drives out the issues and risks in advance and allows a customer to consider how it would mitigate problems should they arise.

“In particular, these contracts should include proper testing and acceptance provisions, appropriate governance processes, and measures to help a customer if things go wrong. These measures might include robust disaster recover provisions; the ability to step in to a failing contract; and adequate service handover in the event of termination.”

For two thirds of manufacturers (63%), the research revealed that the biggest IT-related risk in the year ahead is an unexpected systems failure causing production downtime.

Other key risks noted by manufacturers include cyberattack (53%), such as hacking or data theft, and data protection law compliance (50%).

Ollerenshaw continued: “Cyberattack is perceived as a growing threat for many sectors and the high-profile attack on Sony in 2014 has emphasised the damage it can cause operationally and in terms of corporate reputation.

“Manufacturers entering into a contract with suppliers of any kind of systems support must prioritise security.”

According to the manufacturers surveyed, the main area of IT-related opportunity for the year ahead is establishing an e-commerce system or up-scaling an existing one.