As the saying goes, stuff happens. Natural disasters are a fact of life and they can strike at any time. The same is true of man-made disasters; they happen when you least expect them. Your business IT systems are subject to disasters like everything else, and when your computer network goes down, it creates an even greater crisis for your business. That’s why every business needs an IT disaster recovery plan.
Let’s consider the types of disasters that are likely to affect Connecticut businesses. Hurricanes are the biggest natural threat to Connecticut residents. Since 1954 there have been eight hurricanes that have hit the state, the latest being Hurricane Sandy in 2012 and Hurricane Irene in 2011. In fact, the worst Connecticut natural disasters were due to hurricanes in 1938 and 1955, and global warming only promises to make things worse.
Then there are blizzards, like the one in 1978 that dumped up to 36 inches of snow on the state and closed the roads for three days. Connecticut also has had its share of floods over the years. One of the biggest natural disasters to hit the state was the flood of 1955, and there have been plenty of floods since then. Connecticut gets its share of tornadoes as well. Since most of Connecticut’s energy is still delivered above ground, these types of natural disasters can knock out power at any time.
Manmade disasters are also a threat. More than 36 percent of all IT failures are due to simple human error. Then, there are more malicious attacks such as Distributed Denial of Service (DDoS) attacks that can bring a network to its knees, or computer viruses and Trojans that can infect your systems. One of today’s greatest threats to business is ransomware, which has seen a 50 percent increase over the last year. And, of course, there are hardware and system failures.
When you consider all of the things that could go wrong you can see why it is crucial to maintain a disaster recovery plan.
The Real Cost of Downtime
Any business, including SMBs, can lose a lot of revenue from network downtime. According to an IHS survey of 400 mid-sized ($100 million in revenue of 500 employees) to large-sized companies (13,000 employees and $2 billion in revenue), network downtime costs $1 million per year for mid-sized companies and more than $60 million for companies with larger enterprises.
Even if your company is substantially smaller, network failures are costly. Consider this simple formula to calculate the cost of downtime for an online business – Rloss = (Annual Revenue/525,600) x time, where 525,600 is the number of minutes in a year. So, if your operation generates $10 million, then downtime costs you $19 per minute. Gartner estimates that the average large enterprise suffers 87 hours of downtime per year, so that would be almost $100,000 ($99,180 to be precise) in lost revenue for a company with $10 million in revenue.
However, that’s not the whole story. In addition to lost revenue from systems downtime, you also have to consider other losses such as employee productivity, lost sales, lost customers, and the cost of remediation to get the system back online. When you add it all up, chances are that losses will double to $200,000 or more.
Depending on the nature of your business, your losses may not be as dramatic, but putting in safeguards, including a disaster recovery plan, will pay for itself by minimizing losses.
So how do you develop a disaster recovery plan for your business?
The first step is to perform an impact analysis to determine which parts of your IT operation are “business critical.” Then you can establish recovery points, such as how frequently corporate data is securely backed up. Once you have identified critical computing components and recovery points, you can start to develop a disaster recovery plan. Be sure to include:
Communications – Everyone should have a role outlined in the disaster recovery plan. This means maintaining an up-to-date list of company contacts and assigning each employee a job, such as checking that systems are turned off, setting up workstations, etc. Also, make sure you have a primary person responsible for implementing and managing the plan.
Data continuity – Performing a business impact analysis should give you an understanding of what systems are most vital and should be restored first, and in what order. You should have backup systems and data ready to deploy to make sure these critical systems are restored quickly.
Technology capacity – You will need baseline computing operations up and running before you can restore vital systems, so be sure to include technology restoration and redundancy in your disaster recovery plan. For example, do you have a fallback location in the event of fire or flood? If so, does that facility have the right cooling, power, and infrastructure to handle your data center operations? Have you considered migrating business-critical systems to the cloud?
Backup restoration – Data is your most valuable business asset, so your disaster recovery plan needs to have secure data backup and recovery protocols. Be sure to maintain backups in a secure location such as locking disks in a fireproof safe or, better yet, using mirrored data storage at a remote location.
Developing a comprehensive disaster recovery plan can be challenging, so it may make sense for your organization to outsource your disaster recovery strategy and systems. Outsourcing disaster recovery can save you time and money. Managed services providers provide remote monitoring and data storage, as well as cloud services. Most companies can preconfigure systems to be hot-swapped as needed, or even set up redundant systems.
Having a disaster recovery plan is essential to prepare for the next ice storm or hurricane, but a plan only has value if you implement it. Determine who will take responsibility for your company’s disaster recovery plan and management, and implement as soon as possible.
Want to know the other costly IT mistakes that SMB owners should avoid? Download the free guide: 10 IT Mistakes Most Connecticut Small Business Owners Make.
NSI, a CTC member, is a managed services provider based in Naugatuck, and delivers cost-effective computing solutions and services to organizations of all sizes throughout the region. NSI’s specialty is transforming IT systems into virtual ecosystems that simplify IT management and, more importantly, promote business continuity. Disaster preparedness and recovery has to be part of any operation’s IT continuity strategy, and NSI works with its clients on disaster recovery planning, secure data backup and recovery, and emergency preparedness. This blog from NSI founder Tom McDonald outlines the importance of disaster recovery for Connecticut businesses.
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