IT related risks to UK companies surveyed
- Published: Thursday, 22 October 2015 08:01
UK specialist law firm, Technology Law Alliance, has conducted research with business leaders within organizations ranging from SMEs to large corporates, in respect of key technology concerns for UK businesses.
The research results have shown that:
- 65 percent of businesses surveyed, had lost business as a result of technology or systems failure in the past year;
- 60 percent of large corporates surveyed, had key projects delayed or halted due to technology or systems failures;
- 70 percent of large corporates who were surveyed, felt that one of the biggest IT related risks for them was being a victim of cyberattack.
Technology Law Alliance’s co-founder and director, Jagvinder Kang, comments: “There are two lines of defence to mitigate against risks such as these, one is through practical measures, and the other is through contractual protection, to provide certain safeguards and remedies.”
Kang continues: “Our research findings interestingly showed that, although certain risks and concerns were shared by large corporates and SMEs in similar proportions, such as Data Protection law compliance issues, other risks showed a more pronounced concern amongst larger corporates, such as cyberattack risks: presumably, as a result of such corporates feeling that they were more likely to be targets, and had more risk of associated brand damage.”
Kang also notes that: “The research results show some correlations between large corporates and SMEs with regard to technology opportunities, such as the use of e-commerce platforms in their businesses. However, certain other technology related opportunities, such as improving operational efficiencies by moving them to the cloud, seem to be regarded as a bigger opportunity for larger corporates than SMEs – this might be possibly explained by the economies of scale which can be achieved, and the initial cost versus cost saving model which certain of the larger corporates feel that they can achieve.”
Kang observes that there are other potential reasons for such a disparity, in respect of SMEs constituting a smaller percentage of companies considering cloud migration: “Cloud is still a ‘buzz word,’ even though the concept has been around for many years, albeit that it was not called the ‘cloud’ then.” He continues: “There are many SMEs who are still concerned about the practical implications of moving to the cloud, including concerns about ‘losing control’ over the infrastructure and possession of data and systems, due to the remote nature of them. However, that will no doubt change as businesses see the maturity of the market, and the efficiencies which it can bring both procedurally and through cost benefits.”
He stresses: “Obviously, it is important to also consider the contractual provisions for any such cloud arrangements, to ensure that measures relating to key aspects, such as: functionality; performance; security; contract duration; renewal arrangements; and charging arrangements; are all properly catered for.”
Customers are often procuring technology to benefit from the efficiencies, functionality and performance associated with it. However, there are obviously risk mitigation measures which must be considered.
Kang concludes: “As the research results show, data protection concerns, business continuity and security safeguards have become a more prominent issue in technology transactions, especially with the growth of big data. It is therefore important that they are properly addressed by businesses of all sizes.”
The research report and findings are available free of charge in the ‘Technology Law Insights Report 2015.’ Click here for more details.
The research was conducted with business leaders within 203 UK based businesses, comprising 131 SMEs (with up to 250 employees) and 72 larger corporates, in respect of key technology concerns for UK businesses.