Dec 16, 2014
U.K. organizations paid an average of £410,000 for every unplanned technology-related failure they faced over the last 12 months, according to new data.
Professional services firm KPMG said 50 per cent of incidents are avoidable issues, such as coding mistakes and mishandled IT changes. Of these problems, human error was responsible for 7.3 per cent of cases.
The figures also revealed each outage typically affected 776,000 individuals and compromised 4 million credit card and bank accounts.
Jon Dowie, partner at KPMG's Technology Risk practice, said organizations must understand that technology no longer exists in isolation.
"It is at the heart of everything a company does and when it goes wrong it affects an organization's bottom line, its relationship with customers and its wider reputation," he stated.
"Investment in technology will continue to rise as businesses embrace digital and other opportunities, but this needs to be matched by investments in assessing, managing and monitoring the associated risks."
KPMG highlighted staff training as particularly vital for reducing human error, noting that many employers ignore this basic requirement at a high cost.
The research also showed customer-facing organizations are beginning to understand the importance of sophisticated disaster recovery measures.
One particular incident saw a utilities firm facing a £10 million fine when glitches arose after the company switched to a new billing system.
This resulted in customers going months without receiving a bill, as well as inaccurate payment demands. Furthermore, refunds arrived slowly once the errors had been acknowledged.
Dowie stated: "It is crucial for both public and private sector organizations to understand the risks associated with IT and how they can be managed, mitigated and avoided."
KPMG said the financial services sector should particularly pay attention, as technology complexity is set to be the industry's primary risk factor over the next 12 months.