Managing the new IT risk

Connectivity exposure is the new IT risk many businesses are ignoring at their peril.

Utter dependence on a single telecoms circuit for connectivity is the IT risk that the vast majority of Irish businesses are ignoring. They do so at their peril. With even the most basic systems and processes tied to the internet, a network fault has the power to bring companies shuddering to a standstill within seconds.

As professional advisors, accountants and auditors must be cognisant of their clients’ vulnerability to costly disruptions and educate themselves about network resilience, or ‘redundancy’, as a means of mitigating risk, improving controls and guaranteeing business continuity.

Why network outages are the new IT risk

Accountants and their clients are acutely mindful of the threat posed to their security by viruses, malware and fraudulent phishing scams. Yet, even the most informed business owners persist in ignoring single circuit connectivity as their biggest IT vulnerability. 
The move to the cloud has been touted for so long, we would be forgiven for presuming we all work in one centrally located nirvana by now. There are many legitimate business advantages associated with moving to the cloud, but cloud adopters must be aware that the very move that helps their business opens their company up to a new risk. In short, by trusting critical applications to the cloud, Irish businesses render themselves wholly reliant on a fast, secure and dependable connection to the internet.

Head in the clouds

Happily, most companies have a data connection that works for them – most of the time. And many enterprises feel entitled to shrug off the risk of outages, confident that they work in a relatively low-tech environment. A quick look around their operations typically tells a different story. Accounting software, payroll, invoicing, CRM systems, databases, point of sale systems, even Microsoft 365 applications generally all require a network connection to operate, making connectivity junkies of us all.

Counting the cost 

Operating in this highly connected cloud-based reality means that a network fault or outage will bring work in any office, retailer, manufacturing or professional services firm grinding to a halt. Once a connection is cut, the clock starts ticking on missed business opportunities and plummeting employee productivity. VoIP phones go down, along with email and web queries, making it impossible for frustrated clients to get in touch or for a business to respond. This means that the impact of an outage on reputation and client goodwill may reverberate long after the connection is restored.

Faults, payments and penalties

Fault repair time from the country’s largest broadband providers can stretch to over five days as losses continue to mount – not that an outage has to be lengthy to be damaging. Imagine, if you can bear to, a network fault that coincides with a peak ROS deadline, resulting in a 5% surcharge of tax liability for every late filing. Accountants are not alone on this one. A small company that misses a CRO deadline could lose their exemption and find themselves embroiled in an audit with all its associated costs. Meanwhile, the real-time reporting regime coming into effect on 1 January 2019 will impose mandatory online filing deadlines on every PAYE employer nationwide. One suspects that explaining to Revenue that your internet connection failed may go down like a lead balloon – landing somewhere close to “the dog ate my homework”.

Network redundancy 

Why would an otherwise prudent business ignore a risk of this magnitude? Simply put, the larger national and multinational companies don’t. Enterprise-class businesses have led the way in managing exposure in this field. For years, they have protected themselves against network outages by building wired resilience into their infrastructure.

Denis Herlihy, Chief Technical Officer at Ripplecom, feels very strongly about owners, managers and professional advisors who are not countenancing network dependence as a vulnerability. “Any assessment of IT risk that ignores the need for network redundancy in this day and age is quite frankly negligent, in my opinion. One bad experience is more than enough to send companies scrambling for a resilient solution but for a smaller business, one bad experience is more than they can afford.”

Management controls to minimise risk 

No one believes that accountants should advise their clients to shun the cloud and lose all its advantages. So, what measures can be implemented to manage the risk? Disaster recovery plans are on everyone’s risk management radar but while this will protect files, it is powerless to restore productivity or diminish reputational damage. The custom infrastructure built by large companies is beyond the resources of most companies. However, advances in technology mean that more modest-sized businesses can now incorporate a ‘failover’ solution into their IT set-up. A good failover will deliver the type of network redundancy that larger enterprises have enjoyed for years, but at a fraction of the cost.

Failover protection

At its simplest, a failover adds a second ‘back-up’ connection that takes over when a network fault occurs or a circuit becomes unavailable. A resilient business with a quality failover will have two diverse network connections – one primary and one secondary. Usually, all internet traffic uses the primary connection but when an outage strikes, all connected systems and devices switch quickly and smoothly to the secondary circuit. Once the main connection is restored, traffic switches back to the primary route. Linked systems and devices continue to operate normally throughout the outage keeping customers, employees and ultimately the business happy.

Checklist: how to determine the value of a failover

However, not all failover solutions are created equal. When investing in a failover, or advising a client who is, consider that – on top of speed, security and cost-effective pricing – each failover connection should use a distinct access method to reduce the possibility of being impacted by the same outage or physical fault.

To add real value, a failover should be automatic (an auto-failover) so that no physical intervention is needed on the part of the client or their IT services company. A market-leading auto-failover, such as Ripplecom’s Orion, will be engineered to continue in the same IP stream to allow for a truly seamless switch from one connection to another.
Service disruptions and network faults are outside of a business’ control and are impossible to predict. However, a failover solution that meets these criteria will not just mitigate the threat, it will virtually eliminate it. With a suitable failover in place, owners, managers and advisors can relax knowing that, when an outage does occur, their company will stay securely connected and operational.

John McDonnell FCA is a Founding Director of Ripplecom, an Irish telecommunications company specialising in resilient connectivity.