Measuring the Financial Benefits of a Six Sigma Project
The final step in the metrics is to measure the financial benefits that are accruing to the firm because of the Six Sigma project being undertaken. This is important and is also an area of concern. Most criticisms of Six Sigma say that the benefits that are presented in such analysis are incorrect and actually […]
Benefits of Foreign Investment to Target Countries
Foreign Investment is more stable than fund inflows In recent years, “hot money” or speculative capital has flown into many developing countries leading to their stock markets becoming overvalued. Foreign direct investment on the other had is more stable because the foreign businesses setup physical infrastructure as well as due to the fact that many […]
What is Globalization ? – Meaning and its Importance
We often hear the word globalization in many contexts and repeated frequently as a concept to denote more trade, foreign companies and even the ongoing economic crisis. Before we launch into a full-fledged review of the term and its various manifestations, it is important to consider what exactly we mean when we say globalization. Globalization […]
The Impact of AMLO Win on the Mexican Economy
Andres Manuel Lopez Obrador, popularly known as AMLO, is no stranger to Mexican politics. He has already run for the office of President twice in the past. Both times, he has failed to secure the top job in Mexico. However, in 2018, it was AMLO’s chance to create history. He has become the first left-leaning […]
Service Module – Setting Up and Configuration Control
It is of utmost importance for any business enterprise to maintain their existing customers. A proper after sales service through quick response prompt delivery is needed for enhancing customer satisfaction. Service need may encompass scheduled as well as unscheduled maintenance, warranty management, defect identification etc. Salient feature of a service related module: Proper and Systematic […]
The concept of insurance came about in the business field to cover the risk of loss of assets due to natural and manmade disasters as well as other calamities.
In the current times, Organizations especially those which are dependant heavily on IT systems have begun to look at preventive steps as well as plan for recovery in case of any disaster striking and paralyzing the business. Thus Disaster Recovery and Business Continuity plans have emerged as a Must Have management practice.
When compared to insurance, DR & BC also look at the risk element involved in the business, processes as well as assets and human lives etc. However Insurance aims at making good the loss while DR looks at similar risk elements as insurance but focuses on recovering the assets, data and other processes etc.
Business continuity plan looks at, getting some critical processes and aspects of business up and running as fast as possible in the event of a disaster. While insurance focuses primarily on physical assets, DR & BC focus mainly on preventing any loss or disturbance to the business.
Business Impact Analysis is one of the most important parts of the DR & BC plan. It is here that the estimation and analysis of all possible risks to business is enumerated and identified.
It should be noted here that the BIA analysis risks and measures its impact to the business. Therefore the business loss is identifiable and quantifiable. DR & BC plans do not end with just the Business Impact Analysis (BIA). It aims to calculate and establish limits up to which the losses can be sustained.
Every Business Impact Analysis determines the recovery time objective of a business taking into account each of the analyzed risks. Against each failure or disruption, a calculation of the lead time taken to get the system or process up and running is required to be calculated.
Against the recovery time, there needs to be an analyses and discussion to determine how much time the Organization can afford to withstand the disruption to the business without losses. Such time is known as the Recovery time objective which the DR plan needs to peg on for planning recovery exercise.
Some businesses might withstand a loss of business for one day or in some cases it could be in terms of few hours. The RTO then becomes the primary target to be achieved.
Every business process or system recovery attempted can be started from a fixed point of time. This concept of point of time of recovery can be easily understood with the help of a common example.
If in an Organization, the system back up for financial systems and data is taken every day at midnight and the system fails due to a major disaster on the following morning, then the recovery of data can happen from the point of time when the last data backup has been taken which is the previous night.
Thus when Recovery point objective is determined for each and every critical process, one can then determine which particular process or system requires a closer recovery point and suitable action can be initiated to increase the backup frequency.
The recovery point objective helps give clarity of recovery in terms of the fixed point up to which the recovery can be expected.
An effective DR & BC plan depends largely upon the quality of the Business Impact Analysis. The more time and attention given to analysis and planning helps get better results in terms of estimating all possible risks and prepare for risk mitigation and disaster recovery.
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