How can data loss impact your business?*

At first, Joan Horbiak just kept working. Then it became impossible. She could no longer access files on her computer. The screen was seizing up. Data she had just put into her laptop were vanishing like water through a sieve.

Horbiak's computer was crashing. A malfunctioning fan caused her hard drive to burn, and the communications consultant in Alexandria, Va., lost everything. Presentations. Personal files. E-mail.

"I was in a flood three years ago and lost my car, and this was scarier," Horbiak says. "It was very dramatic. I lost almost everything."

It took her three days and more than $6,500 in payments to computer data recovery experts to restore what she could.

Horbiak's story illustrates a growing risk of doing business in today's increasingly wired world. Computers have become ubiquitous in business. The rise in the use of laptops means a greater chance for malfunctions, theft and loss. Laptops also are more likely to lose data due to accidental damage, such as dropping.

Secondly, more data are being stored in smaller spaces as hard drive capacity increases, according to a 2003 study at the Graziadio School of Business and Management at Pepperdine University in Los Angeles. That means that an enormous amount of business data can be stored on a single laptop.

For example, personal data on 26.5 million veterans and some of their spouses were contained on a computer laptop and disks stolen last month from the home of a Veterans Affairs data analyst in Maryland.

The Pepperdine study remains relevant today, says author David Smith, an associate economics professor at the university, and the cost to businesses is also up.

“(The problem) is growing, because individuals are relying on data so much more,” Smith says. “There are backup systems, but people don't use them enough. Hard drives fail all the time.”

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