Business of IT: drawing up a business continuity plan

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Severe weather, flu pandemics, power failures and transport chaos: events that disrupt a business come in many guises. And they happen more often than many organisations admit.

Although it is the large-scale catastrophes, such as natural disasters or terrorism, that make the headlines, most of the problems that affect a business’ day-to-day operations are far more mundane. Even the IT industry term “disaster recovery” rather overstates the point. Good business continuity planning is less about reacting to disasters, than ensuring that the organisation continues to operate or trade, even when something goes wrong.

Business continuity planning does seem to be moving back up the agenda. According to Forrester Research, business continuity and disaster recovery planning is now the top priority for small and medium-sized enterprises (SMEs) for 2011, and the second highest priority for enterprises. After a few years where financial constraints limited business’ willingness to spend on anything but the bare essentials, analysts now believe that companies are putting more money into their longer-term survival.

As Forrester researcher Stephanie Balaouras points out, it is not that there are more disasters or disruptive events per se, but that awareness of those events is increasing. The US-based Centre for Research on the Epidemiology of Disasters (CRED) calculates that between 2000 and 2009 there were 392 “disasters” worldwide, on average, costing $102.6 billion annually.

Those figures do not include the thousands of smaller failures, outages and disruptions affecting businesses on a weekly basis. Some events – such as the recent heavy snow in much of northern Europe – are a temporary inconvenience for most organisations. Others, including IT systems failures and virus or malware attacks, have put companies that are not prepared out of business.

[/pb]Low awareness, low preparedness

However, despite the clear dangers, only around half of all businesses are said to have a business continuity plan, and even fewer have one that can really be considered effective. Bharat Thakrar, the global head of BT Global Services’ business continuity portfolio, puts the percentage of companies with that have a BC plan at 48 per cent, with the figure for SMEs “even lower”.

Stuart Hotchkiss, author of the recent BCS book Business Continuity Management: In Practice, believes the problem goes deeper. “My guess is that 50 per cent of businesses have no plans. Of the remainder, half have out-of -date plans, which would never work in practice, and I would guess that only 10 per cent of companies do any kind of yearly testing,” he says.

This lack of preparation comes despite evidence that disruption can be fatal to a business. According to research carried out by RISE, a cloud-based provider of data centres, which recently launched a business continuity service, 20 per cent of companies will suffer an outage. Of those that do not have a recovery plan 43 per cent will never re-open, 80 per cent will fail within 13 months and 53 per cent fail to recoup losses incurred as a result of the incident.

As Forrester Research points out, one reason for low levels of preparedness is that it can take a headline-grabbing disaster to force boards to pay attention to business continuity. But there are other ways to focus directors' minds on the issue, including the risk of falling behind competitors – who will be more attractive to customers and more profitable if they suffer fewer failures – and the pressure of industry regulation.

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