Continuing Business in Times of Disaster

One of the key questions to come out in the recovery from the Christchurch earthquake is “can your business go through a disaster and still be in business?”

Following the Christchurch earthquake and storms that ravaged the country, companies are starting to realise the need for business continuity, resilience and disaster recovery planning.

While it is still too early to gauge any long-term effects the earthquake will have on businesses, it can be estimated that a number will struggle to survive and business continuity experts are calling it a wakeup call and a reminder that these things can happen.

Ian Forrester, Managing Director of New Zealand’s largest dedicated business continuity provider, Plan-b, says that any disaster, whether it’s on the scale of the earthquake or localised, affecting only the company in question, is going to have a recessionary affect on a company.

“It’s not so much disaster recovery as it is business continuity, as the real disaster is going to come if the business fails to recover,” he says. “How a company deals with a disaster and if it handles it well gains credibility and is more likely to come out the other side, which is why a detailed recovery plan is essential to any business.”

Forrester found that in the immediate period following the earthquake, companies who had a detailed plan in place had a lot less stress and were able to continue work so customers didn’t notice the interruption, even where offices and premises had been destroyed.

“It’s also important to remember that in an isolated event, where only your company is affected, customers are going to be a lot less tolerant and understanding of a company’s failure to meet its obligations, with the immediate result that they will go to a competitor and of those, some are likely to not return.”

The worst-case scenario after a disaster is that the business is paralysed, and it can no longer operate.

American based CDW Corporation recently released a survey of 200 US IT managers at large and medium-sized businesses that experienced a significant network disruption found that about 30 percent of those surveyed indicated that the businesses lost all data and productivity and their location shut down completely.

The most common cause for a disruption is a power outage, which accounted for 32 percent of disruptions, followed by hardware failure, which caused 29 percent of network troubles.

“This could easily be prevented by regularly testing the company continuity plan and keeping all hardware up to date,” says Forrester.

25 percent of the businesses surveyed experienced an outage of four or more hours, resulting in a profit loss of approximately $US 1.7 billion. The study shows that 82 percent of these disruptions could have been avoided if the businesses had an updated business continuity/disaster recovery plan.

A New Zealand Herald article titled Business at Risk from Slack IT Policies on August 19 highlighted the issue when it surveyed 200 IT Managers in companies with less than 500 staff and found that 49 percent had no documented processes for recovery from an IT outage. The article also found that almost 33 percent of businesses were expecting a technology meltdown in the next 12 months and only 23 percent of companies were confident company information would be protected in the event of a power failure.

“New Zealanders have this ‘she’ll be right’ attitude where it’s not going to happen to them, it's going to happen to the other guy,” says Forrester. “As we’ve seen in the last month, this is not always the case. What companies need to do it is work out who’s responsible; when it all goes to custard, who’s going to be responsible for the core fundamentals of the business and what procedures do we have in place to keep the company running.”



About Plan-b
Plan-b is New Zealand’s largest dedicated business continuity company, providing contingency services to over 500 organisations. This includes managing backup media and online backup, providing standby recovery facilities, server replication, server recovery and an online crisis response guide. Their advisory team can work with clients to review their business continuity management programme and make sure that effective procedures are in place. They have standby customer facilities and offices in three Auckland locations, in Hamilton, Wellington and Christchurch. In addition, their two mobile business recovery units can provide an effective temporary office. Plan-b’s sole aim is to ensure that, should crisis strike, their clients can be back up and running with little interruption and minimal loss.