IT managers who intrinsically understand the value of a viable DR program are being constantly challenged by a difficult-to-answer question emanating from the executive suite: How much is a DR plan worth to the organization? This invariably leads to the corollary question: How can we quantify and determine how much to spend on DR?
The simple answer is that the value of disaster recovery depends on the particular situation your organization finds itself in. Like insurance, the value of DR comes in the reduction of risk and potential losses in the event of system downtime. And as it is with insurance, the risk of loss is tied to certain variables that need to be established.
The key situational variables that relate to an organization’s potential losses include:
A Greater Range of Potential Threats
Over the past few years, the prospect of a major catastrophic event has emerged as an increasing risk. The threat of terrorism, the possibility of an extreme weather event as a result of climate change, or even the risk of pandemic – all have seen an uptick in potential frequency in recent years.
Correspondingly, we now are able to track major events over decades and sometimes centuries. People and concentrations of population in vulnerable regions are certainly more attuned to these possibilities than ever before.
Aging Civic Infrastructure
This is a problem for most cities and urban areas throughout North America. Organizations simply must take into account possible failures in the electrical grid, water supply or transportation network. For this generation, “end-of-life” should be a major concern as many structures were previously engineered and built for the world view 40, 50, or even 60 years ago when Elvis was King. Catastrophic failures in any of these areas would have an unprecedented impact on both business and community well-being.
Emerging On-site Hazards
The concept of on-site hazards is an insurance term. It can be easily translated into help for determining the value of a disaster recovery plan. The existence of any known vulnerabilities or inherent weaknesses an organization’s physical site will increase the value of their DR plan. Such vulnerabilities include antiquated construction (e.g. old wiring built to old code), being situated on an undetected or long-forgotten flood plain, or possibility next door to a new pipeline right-of-way or corridor for crude oil trains.
Higher Business Values
Organizations located in major, growing urban areas often face increasing density, commercial demand and property values, which in and of themselves increase any potential losses from catastrophic events. Furthermore, the intensity of human activity in and around your location (e.g. high-speed public transit or highways) will expose your organization to greater risk, as will certain natural locations, such as being on a major river, or an ocean shoreline.
Increasing Accountability of Business for Liability
New laws and regulations are constantly emerging in virtually every industry, and shareholders and stakeholders need to be constantly aware of them. The risk of non-compliance with new expectations of care, service performance and availability must be directly and honestly assessed. For example, an operations facility that sits upon a fault line must disclose that earthquake risk to its shareholders, and must take the appropriate DR actions as a response.
The increasing reliance on information technology adds even more value to DR preparations. Businesses today have even fewer means of manually substituting for automated process functionality in the event of IT downtime. The good news is that because of this reality, it is easier than ever before to make the case for a DR plan in the executive suite.
