 
  See your link here
|
For more info on a specific newsletter, click the title. Details will be displayed in a new window.
Subscribe to
Computerworld 40 years of the most authoritative source of news and information for IT leaders.
Eye on Offshoring: Lessons From the Tsunami
or
Other Outsourcing Stories
|
|
|
|
February 21, 2005 (Computerworld) --
While government and relief agencies around the world continue to funnel humanitarian aid to the victims of the Asian tsunami, multinational businesses are scrambling to assess their exposure to disasters of this sort, not just in terms of their own people and facilities around the world, but also to the suppliers of services they are ever more reliant upon. Businesses that have offshored services to India, China and other distant locations must understand the impact a natural disaster can have on their suppliers' facilities and infrastructures just as clearly as they understand their own vulnerabilities, and they must make plans to recover from any such disasters, wherever they may strike.
Business continuity planning must be a critical component of all offshoring initiatives. Whether a company uses a strategy of offshore outsourcing or is simply a multinational with offshore facilities, a well-defined and -tested business continuity plan is a must. A fairly common question I hear during the development of such plans is, "What is the likelihood of a natural disaster occurring that will significantly disrupt our operations?" My response is always that there is an exponentially greater potential for disruption from a natural disaster in the developing world because of lower building-code standards, a general lack of preparedness and less mature business models. Recognizing this reality, companies must ensure that their business continuity plans extend to include their suppliers' facilities and infrastructures as well as their own.
The Asian tsunami is a stark example of the potential for widespread devastation, particularly because of the incredible loss of life that occurred. Unfortunately, many people have the impression that this was a once-in-a-century event. While it's true that disasters on this scale are rare, how many people can recall that in 1975 an earthquake hit Tangshan, China, killing 242,000 people and severely damaging or destroying 78% of its industrial buildings? Even putting aside such colossal disasters, total yearly damage from accumulated smaller events is far more than most people think. For instance, the Philippines, on average, is struck by more than 20 typhoons per year, resulting in significant physical damage and loss of life. Unless you are very familiar with the Asian region, you would likely underestimate the chance of a natural disaster disrupting your supplier's operations.
Fortunately, initial reports indicate almost no damage to the Indian Ocean undersea communications infrastructure, other than that part in close proximity to the epicenter of the earthquake that triggered the tsunami. Also fortunate were suppliers of offshoring services in Chennai, India, such as Tata Group and Wipro Technologies, which reported no damage to their infrastructures and no loss of personnel. But several U.S. expatriates, many of who managed or held key leadership positions in offshore facilities for U.S. and Western European businesses, were killed. It's common knowledge within the expatriate community (of which I was a member) that senior-level U.S. executives in the region frequented the devastated locations. With this in mind, a solid business continuity plan must also prepare for the sudden loss of business leadership.
For the most part, companies that choose to offshore, in my view, tend to be myopically focused on the lower cost associated with a given country or geographic area to the exclusion of its ability to meet Western standards for quality, safety, etc. Many governments also offer economic incentives to companies that locate facilities in more disadvantaged areas. As a result, companies that choose to offshore must conduct more extensive due diligence and business continuity planning. If your company contracts for offshore outsourcing services today or plans to in the future, you need to sit down with your provider and review its business continuity plan in detail. Start with these questions, then build upon this list as it relates to your specific industry:
- When was your business continuity plan created?
|
Print this Story |
|
Send Us Feedback |
|
E-mail this Story |
|
Digg this Story |
|
Slashdot this Story |
|
|
|
|
|
 |
| All Zones Application Performance Zone Business Continuity Zone The File Data Management Zone Security Management Zone The SAS Zone Business Intelligence and Analytics Zone Windows Protection Zone The Enterprise Search Zone Software as a Service Zone The Security Zone |
|
See your link here
|
 |
||||||||
| ||||||||
| ||||||||
| ||||||||
|
Long Tail Supplier Collaboration - What's In It For You? 
Download this white paper today!
Download this Computerworld briefing, a $49.95 value free, compliments of Riverbed Technologies. 
Read up on the latest ideas and technologies from companies that sell hardware, software and services. 
- Feds considering changes to H-1B application process in wake of report
- The Grill: Privacy is a thing of the past, says private investigator
- Exploit code loose for six-month-old Windows bug
- More top stories
Go Green with Webroot® Perimeter Security SaaS! Webroot Perimeter Security SaaS is a powerful alternative to obsolete on-premise hardware based security solutions. SaaS allows businesses to obtain flexible protection through an expert security provider, solving the problems caused by software, hardware and appliance solutions. Benefits include easier manageability, better protection and guaranteed performance –all at a lower cost. Register for your free copy of the "Why Security SaaS Makes Sense" whitepaper and Go Green with Webroot! Download this white paper now!
|
 |
 |  Forrester Analyst Report: X86 Server Virtualization For High Availability and Disaster RecoveryDownload this whitepaper |  Yankee Group. "Disaster Strikes! Is Your Business Ready? Disaster Preparedness for Mid-Sized Firms"Download this whitepaper |  VMware White Paper: Transforming Disaster Recovery - VMware Infrastructure for rapid, reliable and cost-effective Disaster RecoveryDownload this whitepaper |