Be Master of Your Disaster

Original Publication: DICTA (Publication of the KBA)

Author:  Lisa Shell Whitfield

Date Published:  June 2001

“If a man takes no thought of what is distant, he will find sorrow near at hand.”

                                                                                    Confucius

A classic example of mankind’s tendency to place too much confidence in our ability to prevent a disaster: the Titanic.  Why weren’t there enough lifeboats on board?  Because the vessel was unsinkable. 

A plan for effective recovery of business operations must be in place because the chance always exists that, despite all preventive measures, there will still be a failure or disaster. Accidents can vary from a devastating fire, to frozen water pipes, to gas line explosions, to lightning strikes, to an employee inadvertently deleting a crucial block of data. 

Disaster avoidance is the first step a firm can take to enable it to respond to any of the aforementioned events.   Taking certain preventive steps can reduce the likelihood of an electronic disaster.  Unexpected voltage striking computer systems through power or telephone lines can wreak havoc with computer memory and magnetic storage.  To minimize the impact of too little or too much current, file servers should be protected with surge suppressors and uninterruptible power supply (UPS) systems.  A surge suppressor blocks sudden electrical current spikes, while a UPS system is basically a battery system that provides power in the event of a sudden power loss. 

A flood, fire, hardware malfunction or virus attack could destroy the computer systems in the office.  It is important to have a backup copy of the computer data and backup procedures should include periodic testing of backup tapes.  Backup tapes are useless if, when they are needed, the tapes turn out to be defective.  Backup tapes should never be left at the office.  The same fire or flood that destroys your computer system will destroy the backup.  Arrange for backups to be stored away from the office, in an off-site storage facility or bank safe deposit box. 

Disaster recovery plans are essential if a firm wants to limit the damage caused and resume operations as quickly as possible.  Before a problem occurs, firms should designate “teams” that consist of a group of people from all aspects of the business, not just IS personnel.  As your disaster recovery plans are formed, this “team” can express business needs from perspectives other than the IS department.  As administrators, we must ask ourselves whether certain job functions and data are more critical to the continued success of the business than others.  This will determine which functions should be restored before others, assuring that the most important business functions are back in operation as soon as possible.  Recovery specialists suggest that one of the first things to be done is to inform clients of the problem and of the recovery status, thereby avoiding the “grapevine” information that usually embellishes the story with each re-telling. 

Adequate insurance is essential.  The terms of insurance contracts should be regularly reviewed and structured to ensure no cost is overlooked to achieve full recovery.  Also, do not overlook the importance of having the right coverage when your firm is unable to operate.  Business Income Insurance or Business Interruption Insurance replaces lost earnings when your business cannot operate normally because of physical damage to your premises.  Extra expense insurance is often a necessary partner to business interruption insurance.  This coverage provides funds to continue operating until your original premises or your new location becomes available.  A wide number of endorsements are available, including Ordinary Payroll Limitation endorsements and Utility Services/Time Element endorsements.  Some insurance companies provide discounts for businesses that maintain effective business recovery planning programs.  These discounts are usually for business interruption insurance. 

Another consideration is whether your firm may have certain fiduciary obligations and “duties of care” to clients and shareholders.  Current standards of care in business should involve a contingency plan and disaster recovery capability.  As the availability of reliable computer technology makes the problem of computer system downtime less and less excusable, likewise, the availability of disaster recovery capability makes lengthy computer downtime more avoidable, and therefore, actionable. 

Statistics show that many firms simply go out of business after serious disasters.  More than half of the 300 businesses affected by the 1993 World Trade Center bombing closed permanently because they could not effectively recover and recapture market share in time to prevent bankruptcy. 

You cannot predict disaster or how it will affect your firm, but failure to prepare in advance could mean creating your own disaster, instead of being “master of your disaster.”  Remember, one morning your telephone may ring at 6:00 a.m. and you will find yourself listening to a description of the waterfall inside your office.  

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