Five Essential Elements of Business Recovery
The article re-printed courtesy of IBM ForwardView eMagazine
reprinted with permission from the HP Small Business Center
www.ibm.com/expressadvantage/forwardview

In the current business environment, the old adage "time is money" applies now more than ever. So what happens when everyday operations are disrupted? According to the U.S. Labor Department, more than 40 percent of all companies that experience a disaster never reopen - and more than 25 percent of those that do reopen after a disaster occurs will close down for good within two years. But even if your company doesn't go through a major disaster, chances are high that it will experience the negative consequences of unplanned outages that make business as usual impossible.

The problem is amplified in challenging economic times, says Warren Sirota, a segment executive with IBM Business Continuity and Resiliency Services. "If the business is already suffering from lower revenue because of the economy and a significant outage occurs, the impact can be much more dramatic than during good times," he says.

Downtime quickly becomes revenue loss
Even though a crippling outage is almost certain to hit most companies someday, many executives running midsized organizations adopt an "it won't happen here" attitude. They would be wise to think again. A business may not be located on the coast where hurricanes strike, but power outages can still occur. According to Infonetics Research, most companies suffer between 300 to 1,000 hours of downtime a year.

"Resilience is the ability to take a blow and keep on going." Wildfires may not be prevalent where a business operates, but no company is exempt from the risk of a building fire. And while Mother Nature is responsible for many outages, downtime can also be caused by air conditioning failures, coffee machine malfunctions, bursting pipes, human error, insects, roof cave-ins and vandalism.

No matter the cause of a disaster, the accompanying costs quickly add up. In some industries, says Infonetics Research, downtime costs can equal up to 16 percent of revenue. And according to the analysis firm Meta Group, every hour of downtime carries an hourly cost of more than $200 for every employee on staff.

Unfortunately, many routine security and business continuity precautions are of little help once disaster strikes. For example, a high-availability server system is a great investment for protection against many types of outages. Yet if all of its components are located in the same area as the cause of an outage, it too will go down.

Understanding business recovery essentials
"Avoiding lost sales is the most significant benefit of having a good recovery plan," says Sirota, who suggests that understanding the importance of the five essential elements of business recovery can help midsized businesses stay afloat amid outages large and small. These five areas, he says, make up the most important parts of operating a business: people, facilities, information, networks and technologies. Planning for inevitable disruptions requires an understanding of the essentials of each of these five elements:

1. Keep people busy with business as usual
Planning for employees, business partners and customers makes up the most critical aspect of business recovery planning, Sirota says. Depending on the nature of the outage, you may need to figure out how and where people can continue working. For a brief period of time, everyone may need to work remotely, but you'll need to have these contingency plans ready, along with automatic notification to tell employees to work at home.

2. Make accommodations for facilities
Facilities make up an important part of business recovery planning. According to the U.S. National Fire Protection Agency, 35 percent of businesses that experience a major fire are out of business within three years. So, if having everyone work at home is not the best option for your business, recovery vendors can provide interim workplaces such as prefabricated mobile offices or buildings designed specifically for use in times of crisis.

3. Secure information before the storm hits
Data can make or break a business. According to the U.S. National Archives and Records Administration, 80 percent of companies without well-conceived data protection and recovery strategies go out of business within two years of a major disaster.

Backup tape and storage testing services can help ensure that critical data will be available after a major outage. Ideally, says IBM's Sirota, backups should be performed offsite, preferably at a facility far away from everyday operations. "The best way to protect the information for a small business is to use a remote data backup facility, which actually transmits the data either overnight or at scheduled times to a remote site where it is stored."

4. Prepare alternate networking routes
Can you keep networks open - or restore them quickly? What happens if you don't have local area network (LAN) or wide area network (WAN) connectivity for an extended period of time? Or phone connections and e-mail? In the worst-case scenario, your business may not have access to any of these vital services.

LAN and WAN contingency plans can include services such as remote data access so critical information can be managed and administered from any location. A failover system for e-mail is also highly recommended by Sirota, who notes that keeping in touch with partners and customers can make all the difference in remaining in business. These solutions can be activated in seconds, but keep in mind that these systems need to be in place prior to an outage.

5. Keep technology up-to-date and aligned with recovery plans
Keep tabs on how technology is applied within your organization. This can be as simple as making sure a security patch has been correctly applied. Otherwise, recovery plans can be easily derailed when new software and hardware is added or upgraded without testing the potential consequences of changes to business technology. That's why experts like Sirota recommend routine system checkups, as well as longer-term business continuity and resilience planning services. "Resilience is the ability to take a blow and keep on going," he says.

Regular checkups provide the best results
Sirota suggests that business recovery plans be tested annually. "Plans go out of date very quickly," he says. "Exercise your plan once a year. People find that's when they realize what they really need to do to improve their plans."

Many of these activities are best done with the assistance of an outside specialist company, Sirota explains, "A small business doesn't have the staff and the in-depth expertise available to do a full-blown plan." He adds. "Obviously they have some people responsible for their IT infrastructure, but typically those people are focused on the day-to-day operations and not all the ins and outs of what could happen in a disaster scenario."

But when the ins and outs of continuity planning are taken seriously, midsized businesses can bank on being competitive - which beats flirting with disaster when it comes to the inevitable periods of unexpected downtime.