Tutorial

ABC: An Introduction to Business Continuity and Disaster Recovery Planning

Good business continuity plans will keep your company up and running. This primer helps make sure you've covered all the bases.

Where do I start?

A good first step is a business impact analysis (BIA). This will identify the business's most crucial systems and processes and the effect an outage would have on the business. The greater the potential impact, the more money a company should spend to restore a system or process quickly. For instance, a stock trading company may decide to pay for completely redundant IT systems that would allow it to immediately start processing trades at another location. On the other hand, a manufacturing company may decide that it can wait 24 hours to resume shipping. A BIA will help companies set a restoration sequence to determine which parts of the business should be restored first.

Here are 10 absolute basics your plan should cover:

   1. Develop and practice a contingency plan that includes a succession plan for your CEO.
   2. Train backup employees to perform emergency tasks. The employees you count on to lead in an emergency will not always be available.
   3. Determine offsite crisis meeting places for top executives.
   4. Make sure that all employees-as well as executives-are involved in the exercises so that they get practice in responding to an emergency.
   5. Make exercises realistic enough to tap into employees' emotions so that you can see how they'll react when the situation gets stressful.
   6. Practice crisis communication with employees, customers and the outside world.
   7. Invest in an alternate means of communication in case the phone networks go down.
   8. Form partnerships with local emergency response groups-firefighters, police and EMTs-to establish a good working relationship. Let them become familiar with your company and site.
   9. Evaluate your company's performance during each test, and work toward constant improvement. Continuity exercises should reveal weaknesses.
10. Test your continuity plan regularly to reveal and accommodate changes. Technology, personnel and facilities are in a constant state of flux at any company.

Hold it. Actual live-action tests would, themselves, be the "disruptive events." If I get enough people involved in writing and examining our plans, won't that be sufficient?

Let us give you an example of a company that thinks tabletops and paper simulations aren't enough. And why their experience suggests they're right.

When CIO Steve Yates joined USAA, a financial services company, business continuity exercises existed only on paper. Every year or so, top-level staffers would gather in a conference room to role-play; they would spend a day examining different scenarios, talking them out-discussing how they thought the procedures should be defined and how they thought people would respond to them.

Live exercises were confined to the company's technology assets. USAA would conduct periodic data recovery tests of different business units-like taking a piece of the life insurance department and recovering it from backup data.

Yates wondered if such passive exercises reflected reality. He also wondered if USAA's employees would really know how to follow such a plan in a real emergency. When Sept. 11 came along, Yates realized that the company had to do more. "Sept. 11 forced us to raise the bar on ourselves," says Yates.

Yates engaged outside consultants who suggested that the company build a second data center in the area as a backup. After weighing the costs and benefits of such a project, USAA initially concluded that it would be more efficient to rent space on the East Coast. But after the attack on the World Trade Center and Pentagon, when air traffic came to a halt, Yates knew it was foolhardy to have a data center so far away. Ironically, USAA was set to sign the lease contract the week of Sept. 11.

Instead, USAA built a center in Texas, only 200 miles away from its offices-close enough to drive to, but far enough away to pull power from a different grid and water from a different source. The company has also made plans to deploy critical employees to other office locations around the country.

Yates made site visits to companies such as FedEx, First Union, Merrill Lynch and Wachovia to hear about their approach to contingency planning. USAA also consulted with PR firm Fleishman-Hillard about how USAA, in a crisis situation, could communicate most effectively with its customers and employees.

Finally, Yates put together a series of large-scale business continuity exercises designed to test the performance of individual business units and the company at large in the event of wide-scale business disruption. When the company simulated a loss of the primary data center for its federal savings bank unit, Yates found that it was able to recover the systems, applications and all 19 of the third-party vendor connections. USAA also ran similar exercises with other business units.

For the main event, however, Yates wanted to test more than the company's technology procedures; he wanted to incorporate the most unpredictable element in any contingency planning exercise: the people.

USAA ultimately found that employees who walked through the simulation were in a position to observe flaws in the plans and offer suggestions. Furthermore, those who practice for emergency situations are less likely to panic and more likely to remember the plan.