While IT systems failures remain the biggest threat to a business' operational success, few small firms have effective disaster recovery and risk management systems in place, a new report suggests.

The research, carried out by the Economist Intelligence Unit, found that managers feared the collapse of their IT systems more than terrorism, natural disasters, financial risk or regulatory constraints.

Despite this, just 13 per cent of company bosses thought that they had IT risk management structure and disaster recovery plans in place.

Businesses also feared that future expansion of complex IT systems meant that the risks they will face will also increase. Indeed, complexity of IT systems was ranked as the number one reason for potential failures.

Other risk factors included regulatory systems to support data privacy and the expansion of IT outsourcing.

"Many senior managers still view IT risk merely in terms of security,” said Rama Ramaswami of the Economist Intelligence Unit.

"This perspective is too narrow.

"IT risk should encompass possible damage to the full range of IT-related activity, including all aspects of business continuity, the impact of delayed IT projects and how IT failure affects customer service, revenue and productivity."