In a post 9/11-world, security and business continuity have
become the top two spending priorities for IT executives. Although
each organization must develop its own blueprint for business
continuity, certain core components exist.
Warranted concerns
Today's business environment is radically different from only
a decade ago. The lingering effects of 9/11, increased threats
from hackers and the risk of disruption due to everything
from power failures to computer viruses, has many business
leaders deeply concerned. In fact, security and business
continuity have emerged as the top two spending priorities
among IT executives for 2004, according to Framingham, Mass.-based
market research firm IDC.
The concern is certainly warranted. Any disruption in services
can undermine operations and put valuable data at risk. But
it might also result in financial losses, damage to a firm's
reputation, and regulatory and legal sanctions. Last fall's
blackout of the northeastern United States illustrated how
serious an issue business continuity is.
What's more, the affect of a disruption can be far-reaching.
A bank that cannot dispense money from ATMs or an insurance
company that cannot tap into its customer records represents
a serious threat to public well being. Today, it's essential
to have technology and processes in place to manage unforeseen
circumstances.
As a result, IDC forecasts that spending on security and business
continuity could reach $116 billion by 2007. That's twice the
rate of overall IT spending over the same period. Organizations
that do not prepare adequately are at great risk.
A 2002 study by the Stamford, Conn.-based IT research firm
Meta Group found that 30 per cent of businesses suffering a
catastrophic event, brought on by a prolonged power outage,
flood, fire, tornado or earthquake, never reopen their doors;
and an additional 29 per cent see the business fail within
2 years. Often, the greatest losses aren't the result of the
immediate disaster, but ongoing lapses during the recovery
phase. Organizations first lose critical files or information...and
loyal customers follow.
Playing it safe
In some industries, such as financial services, business
continuity is now under intense scrutiny. Last April, for
example, the Federal Reserve, Office of the Comptroller
of the Currency (OCC) and Securities and Exchange Commission
(SEC) jointly issued an inter-agency paper on Sound Practices
to Strengthen the Resilience of the U.S. Financial System.
The joint commission identified three core business continuity
objectives: rapid recovery and timely resumption of critical
operations following a wide-scale disruption; rapid recovery
and timely resumption of critical operations following the
loss or inaccessibility of staff in at least one major operating
location; and a high level of confidence, through ongoing
use or robust testing, that critical internal and external
continuity arrangements are effective and compatible.
To be sure, business continuity and contingency planning
are complex endeavors, involving detailed analysis and preparation.
While many organizations do not demand the safeguards required
by banks, brokerage firms and insurance companies, laxity
can spell disaster. During last summer's blackout of the
northeast U.S., one-quarter of the businesses surveyed (24
per cent) lost more than $50,000 per hour due to downtime,
and 4 percent of businesses lost more than $1 million for
each hour of downtime, according to Strongsville, Ohio-based
business technology consulting firm Mirifex.
© Copyright 2003. Galt Western Personnel
Ltd. Unless otherwise specified, you may reprint this article,
quote from it, use it in research or projects, duplicate it or
distribute it. Credit of authorship and source MUST be given to
galtglobalreview.com. Ownership of Copyright remains with Galt
Western Personnel Ltd.
