Delta, CrowdStrike Fallout Highlights Why Firms Need a Recovery Plan

No one is an island. And in our interconnected and digital world, no company is, either — meaning that the cost of a single facet’s downtime on B2B partners can be catastrophic.

For proof, just look at the ongoing fallout from the July 18 disruption of Microsoft’s Windows operating system caused by cybersecurity firm CrowdStrike’s software update, which disrupted computer systems at businesses and public services around the world, including airlines, banks and hospitals. Microsoft has estimated that about 8.5 million Windows devices were hit by the faulty update.

The latest news from that black swan catastrophe for the connected economy?

CrowdStrike’s legal counsel has struck back at Delta Air Lines with a Sunday (Aug. 4) letter denying it was responsible for the carrier’s own IT decisions and subsequent disruptions, after the airline announced plans to seek legal damages from the outage.

Delta has claimed that the massive IT outage, which canceled over 5,000 of its flights, will cost it $500 million.

In a letter, CrowdStrike’s counsel said that while the company accepts responsibility for the outage, it does not accept responsibility for Delta’s own IT decisions and the subsequent impact they had on business operations, noting that “Delta’s competitors, facing similar challenges, all restored operations much faster.”

“Delta’s public threat of litigation distracts from this work and has contributed to a misleading narrative that CrowdStrike is responsible for Delta’s IT decisions and response to the outage,” the letter said, going on to emphasize that Delta “turned down free onsite help from CrowdStrike professionals who assisted many other customers to restore operations much more quickly than Delta,” as well as the fact that other airlines were able to bounce back in a much faster time period.

“CrowdStrike’s focus remains on its customers, including Delta. CrowdStrike hopes Delta reconsiders its approach and agrees to work cooperatively with CrowdStrike going forward, as the two sides historically have done,” the company’s counsel added.

What the legal bluster ultimately shows is that, in today’s digital age, the ability to recover quickly from an outage and ensure continuity is paramount for business success.

Read more: Managing Third-Party Risks Emerges as Key B2B Issue

When an Outage Becomes an Issue

Reached for comment, a CrowdStrike spokesperson said to PYMNTS: “The letter speaks for itself. We have expressed our regret and apologies to all of our customers for this incident and the disruption that resulted. Public posturing about potentially bringing a meritless lawsuit against CrowdStrike as a long-time partner is not constructive to any party. We hope that Delta will agree to work cooperatively to find a resolution.”

Effective disaster recovery planning requires collaboration between businesses and their B2B partners. This includes sharing information about potential risks, coordinating response strategies and conducting joint drills and simulations. By working together, businesses and their partners can ensure a more comprehensive and cohesive approach to resilience.

Whether it’s due to a cyberattack, natural disaster or technical failure, an outage can disrupt operations, erode customer trust and incur substantial financial losses. For businesses, the ability to swiftly recover from such incidents is a necessity.

The repercussions extend beyond immediate financial losses. In the age of social media, news of an outage spreads rapidly, potentially damaging a company’s reputation and eroding customer trust. B2B partners, such as cloud service providers, IT vendors and supply chain partners, are integral to maintaining resilient infrastructure. These partners must prioritize resilience to support their clients’ continuity and success.

Read more: Crisis as Catalyst: What AT&T, CrowdStrike Incidents Say About Recovery Best Practices

“With complex ecosystems, you have a higher number of partners than you may have historically had” in the past, Larson McNeil, co-head of marketplaces and digital ecosystems at J.P. Morgan Payments, told PYMNTS. “You’ve got to understand your industry and the various players in the ecosystem — and as complexity increases, you’ve got to understand the risk and the opportunities that this creates for the business.”

Digital outages aren’t the only threat to B2B relationships. The latest PYMNTS intelligence report finds that timely and reliable payments are fundamental to strong B2B partnerships and are especially critical for small- to medium-sized businesses (SMBs) on the receiving end.

However, the continued use of paper payments and manual accounts payable (AP) and accounts receivable (AR) processes often leads to payment delays and poor communication, threatening the trust and two-way efficiency vital to these connections.

Good communication is the basis of any effective relationship, and B2B partnerships are no exception, the report noted. However, suppliers’ AR teams must be able to collaborate with buyers’ AP teams to ensure the smooth and swift processing of invoices and payment. However, communication gaps in legacy payment systems frequently short-circuit these connection.