Calculated Risk

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."

Today, the hospital has a disaster recovery site with real-time data backup. Ricks plans to expand the site's capabilities and add virtual servers by the end of this year. Total cost: about $1 million.

For most IT managers, however, it takes more than a well-timed act of nature to convince executives to invest more in business continuity and disaster recovery. It takes a compelling story that's full of the hard numbers that executives appreciate.

In the past, it was hard to make a business case for disaster recovery systems because they were viewed as expensive insurance policies against things that might not happen. But a Forrester Research Inc. report says that's changing because IT managers are getting better at quantifying risks and assessing the impact of a disruption.

"It's more of an art than a science," says Forrester analyst Rachel Dines. "Most executives don't realize how much it costs. We're talking about millions of dollars. So it's really all about how you pitch it."

As the Forrester report puts it: "It's much more likely that a CIO or other executive will approve budget for a [business continuity/disaster recovery] upgrade if you can explain that in the next five years there is a 20% probability that a severe winter storm will knock out power to the data center and cost $500,000 in lost revenue and employee productivity."

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