Years ago, if a hurricane knocked out a city’s power supply, the resulting effects on businesses, while problematic, were generally surmountable. But these days, if the power goes out, a virus hits or computers crash, the results can be catastrophic: systems go down, crucial data is lost, profits are stalled and business grinds to a halt.
That is, unless companies have business continuity plans in place.
“I think if you go back a few years, the notion of business continuity is something that wasn’t really addressed, certainly not in a technological way,” said Joe Butt, an analyst at Cambridge, Mass.-based Forrester Research Inc. “Once you introduce the 24 by 7 notion into the world and begin to look at larger and larger percentages of your sales beginning to occur in that world – as opposed to the old world, which was more 9 to 5, and you had all night to deal with issues – then business continuity and continuance and disruption issues become far more important.”
John Hickey, vice-president and chief technology officer at Nasdaq Stock Market Inc., said he clearly understands the stakes involved. If Nasdaq’s computer systems were to fail, “it would disrupt the financial markets of the country and the world,” Hickey said.
Nasdaq faced several technical glitches this spring, from a brief inability to update quotes to capacity-related delays during record trading.
But because of its business continuity plans, the stock exchange has managed to avoid any major catastrophes for years, Butt said. The main reason is that it has a Unisys Corp. mainframe computer system based at its data centre in Trumbull, Conn., and a backup system in place in Rockville, Md., Hickey said.
“Fortunately, we’ve only had to invoke [the backup site] once since I’ve been here,” he said.
On Aug. 1, 1994, Nasdaq’s Trumbull site experienced a dip in its outside power source. The company’s uninterrupted power supply detected the problem and kicked in. But as technicians worked to connect the generators, the backup system failed, too. Suddenly, Nasdaq’s uninterrupted power supply became, Hickey said, “a sometimes-uninterrupted power supply.”
As a result, Nasdaq made key changes when it was building a new backup system in Rockville in 1998, increasing its uninterrupted power supply systems from one to four, adding generators and bringing in a second utility feed from another geographic area.
“We’re adding more equipment up here this summer. We’re adding an additional generator,” Hickey said.
Nasdaq also has emergency plans in place should a hurricane, flood or other natural disaster wreak havoc on one particular area.
“If a local office was closed down, there is a procedure whereby adjoining states or offices would pick up the workload,” Hickey explained. “There’s always coverage for the investor. It’s a very comprehensive plan.”
Like the stock market, health care is another industry in which staying ahead in the business continuity planning game is crucial. In a hospital, a system failure could potentially result in compromised patient care.
“It’s rare that a computer will fail so completely that you cannot repair it by repairing a part,” said Tom Coffey, director of network engineering at Cambridge Hospital in Cambridge, Mass. “But we do have a spare server in our data centre for each model of the servers that we use.
“Additionally, if we have a disaster, we have an insurance program with the vendor of our hardware where they will provide a replacement within 24 to 48 hours.”
The hospital also has an aggressive antivirus program and a recently-completed desktop standardization project, which Coffey credits as two of the reasons the hospital was able to remain relatively unaffected by the recent influx of viruses.
Too Often an Afterthought
Business continuity planning isn’t just about making sure systems are up and running.
“The issue is whether I’m up, and it’s also how well I’m doing,” Butt explained.
But analysts still say they see many businesses waiting until faced with a problem to address the issue. “It’s quite often an event that really prioritizes it,” said Stan Lepeak, a vice-president at Stamford, Conn.-based Meta Group Inc.
“You know, key people leave or there’s a trade or patent dispute or there’s a systems crisis. That’s really what spurs people to accelerate and maybe formalize the effort more.”
Once companies decide to establish business continuity plans, they would be wise to follow the examples of those companies leading the charge, Butt said.
“Some of the poster children are companies like Dell Computer Corp., Intel Corp. and Amazon.com Inc.,” he said. “Unless the entire Earth is blown up, they’ll be able to continue to operate.”