Most businesses don’t realize they have a single point of failure until something goes wrong.
It’s rarely dramatic at first. One system goes offline. One employee is unavailable. One vendor drops the ball. Suddenly, operations slow, or stop entirely.
A single point of failure is any person, system, or process whose failure would significantly disrupt your business. And while the term is often used in IT, the risk extends far beyond technology. In reality, single points of failure are an operational business risk – and one that small and mid-sized organizations face every day.
What Is a Single Point of Failure?
A single point of failure exists when one component – human or technical – supports a critical business function with no backup, redundancy, or documented alternative.
If that one component fails, the entire process fails with it.
Examples include:
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One employee who “just knows how it works”
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One server running critical applications
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One internet connection
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One admin account with full access
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One undocumented process
Not all failures cause immediate shutdowns, but they often create cascading problems that are harder and more expensive to fix over time.
How Single Points of Failure Are Created (Often Accidentally)
Most single points of failure are not the result of bad decisions – they are the result of growth and trust.
Common causes include:
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Long-tenured employees accumulating knowledge without documentation
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Small teams where people wear multiple hats
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Fast growth without time to formalize processes
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Budget decisions that prioritize speed over resilience
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Technology added reactively rather than strategically
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Shadow IT created to “just get things done”
Over time, convenience becomes dependency – and dependency becomes a single point of failure.
Why Small and Mid-Sized Businesses Are Most at Risk
Small and mid-sized businesses are especially vulnerable to a single point of failure because they tend to operate lean by necessity. With fewer employees, critical knowledge is often concentrated in the hands of one or two people, and systems are built organically over time rather than through formal planning.
Backup strategies and redundancy are easy to postpone in favor of day-to-day priorities, and when things appear to be working, risk can go unnoticed. The real danger isn’t just when something fails – it’s when it fails unexpectedly, leaving the business without a clear path forward.
A single point of failure doesn’t just create an IT problem – it creates a business problem.
Common Examples of Single Points of Failure
People-Based Single Points of Failure
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One employee managing all vendor relationships
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One person who knows billing, payroll, or reporting systems
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One administrator with all passwords
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One decision-maker required for every change
Technology-Based Single Points of Failure
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A single firewall protecting the entire network
- One on-prem server hosting critical systems
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One backup device or location
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Aging hardware with no replacement plan
Process-Based Single Points of Failure
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No written procedures
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Manual tasks with no secondary owner
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Critical workflows living “in someone’s head”
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No tested incident response or recovery plan
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No offboarding process for access removal
The Cybersecurity Risk Behind Single Points of Failure
You don’t need a technical background to spot a single point of failure – many of the most dangerous ones hide in everyday access and security habits.
Shared credentials are a common example: when multiple people rely on the same login, accountability disappears, access becomes difficult to revoke, and the business is exposed if that password is lost or compromised. Over-privileged access creates similar risk, especially when one account has broad control over systems, data, or backups with no secondary admin in place. If that account is locked out, misused, or breached, recovery becomes significantly harder.
Backups are another critical area to examine – having a backup is not enough if only one person knows how it works, if it hasn’t been tested, or if access to restore data depends on a single set of credentials.
When ownership, access, or recovery depends on “that one login” or “that one person,” you’ve identified a single point of failure.
How to Identify a Single Point of Failure in Your Business
You don’t need a technical background to start identifying risk.
Ask simple questions:
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What happens if this person is out tomorrow?
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What breaks if this system goes offline?
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Who else knows how this works?
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Is there a backup – and has it been tested?
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How quickly could we recover?
If the answer is “we’re not sure,” you’ve likely found a single point of failure.
How to Reduce or Eliminate Single Points of Failure
Eliminating every single point of failure isn’t realistic for most businesses but reducing them is both achievable and impactful. The first step is ensuring that critical knowledge and responsibilities are not isolated to one individual.
Cross-training team members and documenting key processes helps prevent operational slowdowns when someone is unavailable and creates consistency as the business grows. Access management also plays a critical role. Centralized credential management reduces reliance on shared logins while ensuring that access can be granted, revoked, or audited without disrupting operations.
Just as important, backups and recovery plans must be treated as living systems, not one-time setups. Regular testing confirms that data can actually be restored and that recovery does not depend on a single person or account.
When IT decisions are aligned with broader business continuity goals, organizations move away from fragile, reactive setups and toward resilient systems that can absorb disruption without halting the business.
A single point of failure is not a sign of failure – it’s a sign of opportunity.
Over time, this shift from reactive problem-solving to proactive planning strengthens operational stability and supports long-term growth.
Identifying and addressing single points of failure is one of the most impactful steps a business can take toward long-term stability and growth.
Have more questions about this topic? We’re here to help. Contact us for answers, guidance, or support.
