Was it Good Luck or Good Planning? (part 1 of 2)

In August, we (in NY) experienced one of the few earthquakes in our history, followed in September by tropical storm Irene. Oddly enough, September is “National Preparedness Month”. So this is the perfect time to ask how prepared are you for some kind of disaster?

 Most companies believe they have a Business Continuity Plan (“BCP”). I say believe because if you haven’t fully tested it within the last quarter or so, then Murphy’s law may unfortunately prevail – you may find out too late that the plan can be incorrect or incomplete. According to experts 1, despite insurance policies (including business interruption coverage), 43% of companies that don’t have a fully tested plan and experience some kind of incident never reopen; 29% more close within 3 years. Furthermore, 93% that suffer a significant data loss are out of business within 5 years – we’ll cover the Disaster Recovery Plan in a future article.

 A strong Business Continuity Plan is your only defense against the many threats that lurk close by. Whether it’s a natural disaster such as a flood, earthquake, or hurricane; a man-made problem such as a power outage, no internet access, or phone failure; or any other type of catastrophe, the plan must address all needs of your business (not just I.T. as is commonly thought).

 Imagine what would happen under the worst circumstances and your company came to a grinding halt. Could you grin and bear it for a week? A day? An hour? Or is halting operations for even as few as 10 minutes too costly? This is part of the risk assessment process: determining the true cost of the outage and the frequency or likelihood of its occurrence versus the investment to prevent and/or ameliorate it. The true cost includes not only your loss of direct profit, but also additional expenses spent on restoring operations, loss of good will, loss of clients, lawsuits, and other costs.

 For example, is there electricity to run the office and all the equipment? Phone service, so customers and vendors can get through? Internet and e-mail access? Is the building accessible and safe, so employees can do their jobs? If you are a manufacturer, can you resume operations?

(this blog is continued in part 2)

 Matthew H. Stern, CDP CCP CCE is the president and founder of The CIO Source, Inc., a New York firm specializing in I.T. Management and Risk Mitigation. Their offerings include developing and testing clients’ Business Continuity Plans. He can be reached at newsletters@theCIOsource.com

Their website is at http://www.theCIOsource.com

Copyright (c) 2010-2011 Matthew H. Stern, all rights reserved

Note 1: Source: Oregon Information Resources Management Division, Department of Administrative Services

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