Magazine article The CPA Journal

Business Continuity Plans for Disaster Response

Magazine article The CPA Journal

Business Continuity Plans for Disaster Response

Article excerpt

The devastating human and fiscal effects of the September 11 World Trade Center disaster extend far beyond New York City's financial district:

* The airline industry-crippled by a temporary shutdown of U.S. airspace, heightened security, and plunging ticket sales-is suffering significant losses.

* The insurance industry may be facing the largest loss in its history, topping even Hurricane Andrew, which in 1992 cost the industry almost $20 billion.

Continuity Strategy

The events of September 11 have forced CEOs to revisit their preparations for business continuity: the measures an organization takes to operate as normally as possible after a natural or man-made disaster. Today's business environment demands a rapid-response approach that allows for fluid continuity of core business operations in the event of a catastrophe.

Such a strategy involves the development of a business continuance plan that addresses data availability and dependability. It can lower the risk of critical-service and business-function disruption due to disasters or unplanned interruptions. The aim is to resume near-normal operations within an acceptable time period.

The success of a business continuity plan hinges largely on a commitment to an enterprise-wide perspective. Organizations face rapidly changing and growing risks: globalization; e-commerce and cyberspace; new corporate collaborations; the pace of business activity; and, now, international political risks. These new risks have spurred CEOs to scrutinize the threats to their entire enterprise, including to business continuity. Leaders are finding that they can ill afford prolonged downtimes, slow reaction times, expensive system upgrades, or inflexible processes.

An effective strategy for business continuity addresses not only risk mitigation and continuity planning for process disruptions, but also controls over configuration changes and data storage requirements that improve the availability of vital information among process owners. The benefits include

* extending the life of a major system such as an enterprise resource planning package, by controlling configuration changes;

* allowing greater flexibility and faster response time when a key business process needs modification;

* developing a data storage strategy that accentuates information availability and safeguards.

As a result of precautions taken after the 1993 World Trade Center bombing and preparations made for Y2K, it is believed many companies affected by the September 11 disaster were able to prevent critical data loss due to thoroughly planned backup and recovery operations. Companies that were less prepared may need to consider revamping their data infrastructure and backup pol ties. A sound business continuity procedure can help organizations select a data storage technology and structure recovery agreements with third parties.

Research by the Gartner Group indicates that enterprises with prepared business continuity plans are significantly more likely to recover as a viable entity than those without. With corporate risk management attracting increased scrutiny, business continuity planning can satisfy many growing demands. For example, customers expect supplies and services to continue-or resume swiftly-in all situations. …

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