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Business Continuity, Part 1: The Risk of Poor Planning

 

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Barely a month into hurricane season, we’ve already had one storm leave its mark as Hurricane Arthur left hundreds of thousands of people without power in the U.S. and Canada. If your data center experienced an outage, how much time would it take to recover and access the data and applications required to operate? How much would it cost your organization?

 

While hurricanes and tropical storms aren’t the only causes of disaster, they serve as a stark reminder of the importance of business continuity and disaster recovery planning. The statistics show most organizations are unprepared even though unplanned downtime is virtually inevitable. Research from the Ponemon Institute found that 95 percent of companies experienced a data outage within the past 12 months. Another study from Gartner revealed that approximately one in four organizations have experienced a full data disaster.

Without a documented and tested business continuity and disaster recovery strategy, the financial impact can be staggering. According to Gartner, downtime costs $70,000 per hour for midsize organizations, which have 16 to 20 hours of network, system or application downtime per year. The cost to repair damaged relationships and a tarnished reputation could be even more expensive. In fact, PwC found that seven in 10 organizations that suffer a major data loss shut their doors permanently within a year.

Many organizations confuse the concepts of business continuity and disaster recovery. While definitions may not seem important on the surface, understanding the distinction between the two can help organizations plan more effectively and minimize the risk and impact of downtime. Disaster recovery is one component of business continuity.

Disaster recovery is the process of storing data at a secondary site so this data can be first recovered and then accessed when a disaster occurs. The speed of this process is critical. If disaster recovery isn’t well-planned, or if you have no plan at all, it could take days or weeks to recover and access data. Some data may need to be re-created, which costs thousands of dollars, and other data may be permanently lost. If your organization is subject to regulatory compliance requirements, the failure to produce data could result in severe penalties.

While disaster recovery focuses on data, a business continuity plan includes the processes and procedures that enable an organization to operate during and after a disaster with little or no downtime. Business continuity involves hardware and software that are used to store data in at least two locations simultaneously. A failover mechanism makes it possible for users to access data and applications from a secondary source when the primary source goes down. Business continuity planning also prioritizes what data and applications need to be recovered based upon the needs of not only the organization, but also customers, business partners and vendors.

In Part 2 of this post, we’ll discuss what a business continuity plan should include and why proper planning is more important than ever.

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