Disaster Recovery and High Availability have been a pretty common theme in client conversations lately. Most of the conversation centers on the increased awareness of the need by business management and the continued decline in the costs involved in implementing those solutions.
In a blog post I wrote a couple years ago I talked about the need for preparedness – see Can Your Business Survive a Disaster. A big part of being prepared is having a plan. What happens when the lights go out or the roof blows off or there is a fire in the facility? We should all have those plans and they should be up to date. But before we create or even update the plans, what are we planning for, in detail? There are two steps to the plan development process that are important before creating the actionable plan, Business Impact Analysis and Business Risk Assessment. Together these steps will help you focus in on the important details of your plan, be it a DR plan or and HA plan. And the results of your analysis could help you decide which of the two (or both) are important aspects of your business continuity process.
I’m going to focus on the Business Impact Analysis process here. I’ll address the Business Risk Assessment process in a later blog.
Business Risk Assessment: The process of understanding your business functions and analyzing the impact if they are interrupted.
So, to determine the true impact of a disaster or interruption in your business, you need to know, in detail, what business processes are critical to the continued function of the business? What business process loss could create lost or delayed sales, create dissatisfied customers, delay receipt of income, delay the payment of bills or increase expenses. FEMA has a very informative ‘circular’ that can help in the analysis process, Continuity Guidance for Non-Federal Entities: Mission Essential Function Identification Process. In their words, the circular “provides planning guidance and a methodology to assist non-Federal government organizations in identifying and ensuring continued performance of their mission essential functions.” My mind goes to the words “identifying continued performance of mission essential functions.” What are those?
We can measure things like lost sales and increased expenses, once we have them identified. A dissatisfied customer is a bit more difficult to measure. Dissatisfied vendors can be even more difficult to quantify, but can be just as important to your survival. As business people in the day-to-day world, we tend to focus on the things we see and, as a result, make judgments based on what we think we know. How long can we operate with production or shipping interrupted? What can we do to make sure logistics processes are supported? All good impact questions, but what if your business interruption disrupts a major client. What if your inability to manage the now chaotic cash-flow process impacts a critical vendor? What will this do to the long-term survivability of the organization?
Understanding the impact this could potentially have on the business is why Business Impact Analysis is important, and a critical step in the overall development of either a Disaster Recovery or High Availability plan. The circular I mentioned above can help you model the effects of interruptions on your business. A modeling process will allow you to see the impact of a combination of events affecting your business – the roof blows off and you have lost power for an extended period of time, combined with the loss of a vendor or transportation issues. This allows you to start to see the true potential of an impact. Seeing those ‘impacts’ on a timeline can give you a clearer picture of what these potential events can do to your enterprise.
Actionable plans are critical to remaining in business. Creating those plans based on the known impact that events have on the business helps those plans to be effective when needed.
If you would like help in moving forward with a Business Impact Analysis plan, give me a call. I’d love to discuss it with you.
President, Arbor Solutions, Inc.