Hurricane Ike almost completely submerged the city of Galveston and its 60,000 residents under floodwaters.
Houston received 110 mile-per-hour hurricane-force winds, blowing out windows, knocking down trees and leaving more than 2 million customers without power many for more than two weeks. Flooding rains and power outages extended as far north as Chicago, more than a thousand miles away. Damage estimates from Ike are expected to exceed $27 billion, making it the third costliest U.S. hurricane of all time, behind Andrew in 1992 and Katrina in 2005.
“The prolonged power outages and long lines for basic necessities, including fuel and ice, made recovery even more problematic, causing many businesses to rethink their continuity of operations plan,” says Tim Barto, Executive Vice President of Houston-headquartered DYONYX. “It’s one of the perils of living on the Gulf Coast and it’s not over yet.”
According to forecasters, the Atlantic hurricane season has had 12 named storms, of which six were hurricanes, and the season doesn’t end until Nov. 30.
Smart Business asked Barto for his insight into businesses planning for emergencies.
Particularly on the Gulf Coast, why don’t all companies have a well-documented plan for dealing with emergencies?
It is mind-boggling that despite the man-made and natural disasters that are a reality today, many companies are not prepared to maintain their business operations in the event of an emergency. In fact, according to a recent study on business continuity and disaster recovery preparedness, one in five businesses does not have a business continuity plan developed, and nearly 30 percent do not consider business continuity planning a priority. For those that do have a plan, it is estimated that less than a third enact testing prior to implementing it.
While you may have been considered one of the ‘lucky’ thus far, emergencies come in many forms not just hurricanes. Only 15 percent of declared disasters are weather-related. Another 16 percent are attributed to power outages, which we learned the consequences of during Ike. Forty percent of disaster events are attributed to hardware failure and network outages. According to Gartner, two-thirds of companies without a plan that experience a disaster will not recover and, in fact, will close within two years of the event.
What are others in the Houston business community doing to minimize risk and maintain operations?
Successful businesses understand the need to be resilient regardless if the event is a hurricane, a hacker, hardware failure or system downtime. They have a documented and tested plan that includes business continuity and recovery of core applications. At a minimum, after accounting for the well-being of employees and families, an effective communications plan is key to maintaining operational status of your business. This requires what most companies consider essential for employees and customers alike, and that is your phone system, e-mail and Web-facing applications. Having your core applications and internal/external communication systems in a hardened facility when your business is without power and your servers are down the hall become paramount to being resilient and maintaining operations. Replicating essential data to another geographic location is another consideration.
What’s the difference between business continuity and disaster recovery planning?
A business continuity plan defines continuance of business operations from a business process standpoint. For example, your business might be able to continue using only cell phones and a manual process using paper forms. A disaster recovery plan focuses primarily on the provision of computing and telephony resources used to support business operations. This part of the plan aids in the step-by-step restoral of required computing resources.
A disaster can take different forms and severity and is often subjective based on the impacted business function. A disaster may be as simple as a burst water main or as catastrophic as a hurricane. Regardless of the level of event, the effects must be evaluated and a plan designed to assist in prioritizing continuance or restoration efforts.
Are there other business benefits to disaster recovery/business continuity planning?
Good preparation is good business. Disaster recovery and business continuity are no longer just an IT issue but a business imperative. In addition to minimizing losses, reducing customer impact and preserving reputation, the added benefit of leveraging third-party hosting and management of your core applications include, for example: guaranteed uptime and redundancy, reduced hardware/software refresh costs, fixing your IT spend, leveraging operational versus capital costs, and the benefit of third-party experts to ensure your business resilience. The hard truth is that your customers in ‘unaffected’ parts of the world feel for you, but in this age of global commerce and need for 24-7 operations, the show must go on. Be prepared. Be resilient. You may not be so lucky the next time.
TIM BARTO is Executive Vice President, Sales and Marketing, for DYONYX. Reach him at (713) 830-5910 or email@example.com.