Is Disaster Recovery Really Important to Small-Medium Businesses?

In my last blog I talked about how Disaster Recovery (DR) crosses all vertical markets and is important no matter what your company does.  In this blog I will “cut the pie” a different way and talk about the size of your company and whether or not Disaster Recovery and Business Continuity is important to your business – regardless of the size.

Business Continuity (BC) has been at the forefront of most enterprise companies for a long time.They have the ability to allocate resources to the issues involved with creating and maintaining a complete Business Continuity Plan (BCP).  Many enterprises have a complete department that focus on all aspects of business continuity.  These can be everything from personnel issues and HR announcements to public relations.

A newer trend in the “C” level management has been to create a new position often call the Chief Risk Officer (CRO).  Although Chief Risk Officers have existed for a long time in the financial market they are new to other verticals (such as manufacturing).

Enterprise companies have also assigned Business Continuity and Disaster Recovery to specific individuals OUTSIDE of Information Technology to handle the bigger picture.  These individuals usually have education and training specifically focused on Business Continuity.

This is a luxury that enterprise companies have – the ability to support a resource to own and manage the Business Continuity and Disaster Recovery plans for the company.  Just because the Small-Medium Business can’t fund this type of resource doesn’t make them immune to disasters.

Small-Medium Businesses typically don’t have the luxury (and resources) to be able to create and maintain a Business Continuity Department.This doesn’t mean that Business Continuity isn’t less important. In fact, it is more important to this size business.  A smaller company does not have the resources to weather an event or disasters as well as most enterprises can.

An event that causes an outage for a Small-Medium Business will have a much larger impact on sales that most enterprise customers. Take the recent disaster that happened in southern NH as an example. Nashua is home to 175,000 residents and more than 700 local businesses.

Southern NH experienced an ice storm in December 2008 that left over 200,000 homes without power for up to 12 days.  In this scenario, a small local company ($10 million annual revenue) loses a day’s worth of business it roughly equates to $33,333 ($10 million / 300 days).  A week’s worth of income is $233,331 (or 2.3% of their annual income).  This means that the whole company will be out of work for a week.  An enterprise will have additional sites outside of the region that will be able to cover the outage.  One day’s loss to an enterprise company ($1 billion annual revenue) would be $3.3 million.   this will be reduced by the regional diversity of the company.  The 7 day outage would roughly represent 0.46% of their income.

It is because of this that Business Continuity and Disaster Recovery are more important to the small to medium size business. The task of a Disaster Recovery plan falls to the Information Technology (IT) for many reasons.  They have access to all of the departments’ critical data. They also know how the applications interact dependencies between them. This makes IT ideal to help build the Disaster Recovery Plan – especially in smaller organizations.

A complete Disaster Recovery Plan does not have to be an epic novel. The more complex your environment the larger your plan will be. Having a simple, easy to use instruction manual is critical. Planning and testing is the key to a successfully implemented Disaster Recovery Plan. It should be well documented and clearly identify what, where, when, why and especially who.

Progress Software recognizes that this can be a hard thing for businesses to perform. This is why we have products like Name Server Load Balancing, OpenEdge Management, OpenEdge Replication, and Actional.These help to both proactively prevent disasters as well as allow you to recover and run your business despite the disaster.  They don’t require weeks or months to learn and implement and they make your life easier to manage.

Unfortunately, there is nothing we can do about the weather, yet…In my next blog I will talk about documenting your Disaster Recovery Plan.  Until then, if your DR plan isn’t broken then you probably haven’t tested it lately…

Brian B