Morgan Stanley. The 32-story building that it sold is only a block away from Morgan's Times Square headquarters. If the investment bank were to keep both buildings, its trading and backup facilities would be concentrated in two buildings that are dependent on the same transportation and power infrastructures.
Now, Morgan Stanley "will be better positioned from a business continuity standpoint," Philip J. Purcell, its chairman and chief executive officer, said in a statement when the deal was announced.
Mr. DeZabala said most of Deloitte & Touche's large clients did well in terms of recovering their operations, but a lack of geographic diversity was problematic for some. Companies that did not recover so well erred in having too many business units relying on the same backup facility, or in having a backup site too close to the epicenter, he said.
"Nobody had anticipated a disaster of this magnitude," Mr. DeZabala said.
J.P. Morgan Chase & Co. managed to avoid serious operational glitches, even though it has four office buildings in downtown Manhattan. Processing for treasury services, one of MorganChase's largest businesses, is done in Brooklyn, with redundant centers as far away as Tampa and Dallas.
"We were in a fortunate position," said Linda M. McLaughlin-Moore, senior vice president of treasury services and global clearing at J.P. Morgan Chase. Having backup sites in faraway locations makes recovery easier from a staffing, telecommunications, and equipment perspective, she said.
Even though data processing went smoothly at MorganChase, Ms. McLaughlin- Moore is brimming with ideas about how contingencies surrounding one of the company's most vital functions - moving money - can be improved.
The tenuous nature of the links that connect MorganChase to its clients, its vendors, and its competitors became apparent in the aftermath of the disaster.
A number of MorganChase's clients had not tested their contingency sites in a long time and had not accounted for upgrades that were made to software packages, according to Ms. McLaughlin-Moore. Some businesses, for example, had added the capability to access services anytime, from anywhere, but they hadn't upgraded their recovery systems accordingly.
"Contingency can't be built around what was there last year," she said. "It needs to adhere to new capabilities."
MorganChase also found that its competitors' ability to keep their systems up and running was key to its own success. "Banks should be scrutinizing not only their plans, but other banks' plans," Ms. McLaughlin-Moore said. "We're dependent on all the players in the market, so it's incumbent on us to understand how we can assist our competitors so the whole industry stays together."
These realizations have moved MorganChase to initiate frank conversations about contingency planning with its customers and competitors. "We all need to retell our stories with our partners, our clients, our vendors," Ms. McLaughlin- Moore said. "We have a lot of people deployed making sure we are looking at all the angles."
Mr. DeZabala echoed Ms. McLaughlin-Moore's concerns about the impact that third-party providers can have on a company's ability to get back into business. Institutions will take a more exacting look at the recovery capabilities of firms that provide telecommunications, Internet, and other services, he predicted.
"When it comes to third-party service providers, management's disposition in the past has been relatively trusting. In the future, management will trust, but verify," he said. "The resiliency of a company has a lot to do with the resiliency of its providers."
MorganChase expects to see new customers demanding to know more about the company's contingency measures when they submit "requests for proposals" or bids for MorganChase's business. "We're telling clients to ask a lot of questions," Ms. …