When considering the return on investment of establishing a Disaster Recovery (DR) plan, your organization needs to ask a lot of ‘what if’ questions. As with many important decisions, the answers lie at the balance point between pro and con.
The penalties of regulatory non-compliance and potential costs & business losses need to be balanced against the investment of doing and maintaining a DR program. But the indirect benefits of a DR plan also need to be factored in to your deliberations.
Business Owners Need To Ask Important Questions
The cost-benefit analysis of a DR plan is an equation where you fill-in values important to you. [see DR Equation below, as a guide] What is the cost of failing to implement a DR plan if nothing happens? Will the business’ credibility suffer if customers find out it has an outdated DR plan, or no plan at all? Are you violating regulations or guidelines by not having a DR plan, and are there penalties involved?
And you would add to the equation: What’s the cost of failing to implement an adequate DR plan if disaster strikes? How much revenue would you lose? How much credibility or market share? How much more, avoidable cost would it take to recover or survive without a DR plan?
Take a Deeper Look At The Costs…
Let’s be honest. The costs of running, managing, maintaining and developing an effective DR program are real. There’s a one-time cost to plan, develop and test a program, maintained with ongoing support review and training. It all costs money.
… Then Look at Some Offsetting Benefits
When you start the DR planning process, you start to focus on the most important elements of your business. You start to simplify and standardize your IT environment, and make yourself more resilient. And then other side benefits start spinning off that wouldn’t have happened without the DR program.
Taking on DR planning will likely mean you will rationalize all your software licenses. You will keep your operating systems more up to date, and you will likely centralize, consolidate and virtualize some of them. And you will also likely review and renegotiate some contracts with key suppliers and carriers to yield higher value for the organization.
It Pays To Keep Things In Order
All these things that pop up when you develop a DR program create additional benefits that offset the costs of a DR program, and provide a better ROI. A DR plan helps keep your entire IT house in order. It’s like cleaning your space before you move. If everything’s well kept, labeled and boxed and neatly managed, the move is easier and many unforeseen incidents during the move are averted.
When calculating the costs and benefits of DR implementation, be sure to step back and get the big-picture view.
DR ROI Equation:
| Non-existent/Ineffective DR Plan | Effective DR Plan | |
|
Penalties of Non-compliance (if requested) + (add) Direct Loss of Business (if an incident occurs) + (add) Reputational Damage (if an incident occurs) + (add) Unnecessary Recovery Costs (if an incident occurs) = (total) |
<–Match?–> | Cost of Upgrading & Maintaining DR Program – (less) Incremental Service/ Revenue Improvement & New Business Wins – (less) Market Advantages – (less) Synergistic IT Improvements & Simplification = (total) |
