Historical Origins of the Present Global Economic Crisis
The Roots of the Present Economic Crisis The global economic crisis that started in 2008 has its origins in the events of the 1970s. That was the time when the United States reneged on its commitment to work under the Bretton Woods Agreement, which stipulated that countries must peg their currencies to gold and must […]
Different Levels of a Process – Viable System Model
An organization can be viewed as a collection of processes. At the grass root level, an organization is nothing but an arrangement of humans and technologies in a specific manner to achieve pre-determined objectives. However, work is divided amongst various processes to increase efficiency and effectiveness. However the functions of all processes are not the […]
Conducting the Knowledge Transfer
The Six Sigma project is not complete until the concerned personnel who have to operate the process have the know-how to do so. Many Six Sigma projects have failed because the project team was overjoyed at achieving success. However, one must not forget that improvements are only on paper until they are implemented. And there […]
The German Small and Medium Enterprises (SME) Story
Germany has the second largest exports in the world. They are second only to China. This is remarkable given the fact that Germany is a first world country with very high labor costs. The Chinese pay slave wages to their workers and make them work for longer hours. On the other hand, the Germans pay […]
ERP Vendors and their Products Catering to Different Verticals
During 1990, ERP market was dominated by few vendors namely SAP, BaaN, Oracle, People Soft and JD Edwards, who were also known as big five of ERP market. The market was, then, was growing at compound rate of approximately 35%. Fortune 500 companies were the major customers. Key focus of ERP vendors, during that period, […]
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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