Calculated Risk


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IT managers can't count on a well-timed act of nature to convince executives to invest more in business continuity and disaster recovery; hard numbers are crucial.

Ed Ricks didn't have to manufacture a worst-case scenario to convince executives at Beaufort Memorial Hospital in South Carolina that they needed to boost spending on business continuity and disaster recovery systems.

On his first day as CIO at the hospital, a lightning storm knocked out power. The hospital immediately switched to a generator, but the backup system didn't include power for air conditioning or communications. "Our data center got too warm, and we had to start shutting servers down," Ricks recalls. The hospital also lost communications links to other facilities.

From a CIO's perspective, "It was almost too good to be true for me," Ricks says. "The situation wasn't even as bad as it can get, but it showed what could happen. It was really obvious that we had to do something to make sure that we're always operational."

So, how can IT managers come up with hard numbers to quantify the need for business continuity and disaster recovery spending? Dines suggests that companies take these steps:

Calculate your annualized risk cost. Make a list of each risk in your geographic area. Next, list the likely number of hours of downtime that might result from outages caused by each of those risks. In a third column, list the percentage chance of such an event happening in a year. Finally, multiply all of that by your hourly cost of downtime to arrive at your annualized risk cost.

"That can be a pretty good way of guiding technology investments that can eliminate that risk — such as investing in remote-access procedures for a winter storm," Dines says.

Making the Business Case

Beyond the numbers, IT leaders have been successful in scoring funds for business continuity and disaster recovery projects when the business units and risk management personnel help explain the need in business terms. A survey of 345 Disaster Recovery Journal subscribers showed that about 65% of business continuity management teams work with their business units to determine the impact of risk.

Here are more tips for winning over non-IT executives:

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