A Business Continuity and Disaster Recovery (BCDR) plan can be created for anything. Natural disasters, business plans, infrastructure projects, daily operations of a business, sports teams, really anything that has the possibility of not running right can have a plan. For this article the term will be project, which is open to your interpretation on what a project actually is.
Who takes the kids to schools when the primary driver has the flu? That is the most basic BC plan.
What do we do when we get a flat tire? That is the most basic DR plan.
These 2 examples may not be written out, but they are just as valid as any other plan, and there is usually a plan in place. And yes, you can have one half without the other or call the plan DRBC if recovering from the disaster is a higher priority than continuing business.
Business Continuity and Disaster Recovery plans are developed for certain circumstances that have the probability of occurring. Spending years of work and millions of dollars to secure a data center in the Atacama mountains desert region against flooding is useless. Equally useless is spending years of work and millions of dollars to prevent a New York snow in the winter.
There are 4 primary categories that are considered important in BCDR; avoidance, mitigation, transference and acceptance. Acceptance is contested as an option because there are not many people want to build a plan that says we accept a risk and a failure and can not mitigate, transfer or avoid it. There are cases when there is no real option other than accepting that there may be failure.
A sample project is to install a new telephone system in my office.
In a Business Continuity and Disaster Recovery plan, avoidance is building steps into your project to eliminate the risk or to protect the project from anything negative by means that you will determine.
My project may be late because it takes place from 15 December to 15 January, a time when many of my staff will take vacation. I can avoid an impact on my project by requesting an extension on the project, requiring additional resources, requesting extra money or many other options – you are limited by your imagination.
The idea behind transference is that the possibility of financial impact to the project is limited by contracting out some aspect of the work. I transfer the responsibility for part of the project to someone else. Transferring responsibility does not transfer accountability. The person in charge still has to accept that a failure is related to improper planning.
My December project may be late so I have hired a company to accomplish 3 critical tasks. If these tasks are not finished on time and in sequence, the project will not finish on time. I have signed a service level agreement with the vendor and the company will put all the resources required to deliver on time. If they fail to deliver on time they will not be paid, it the overall project is late because they fail to deliver on time they will pay me $1000 per day for a maximum of 15 days.
Mitigation is the part of the plan that takes the most thought. If mitigation is done properly then avoidance, transference and acceptance are clear. Mitigation is something you do to reduce the probability or consequences of a risk impacting your project. You may also define an acceptable level of impact that does not threaten the completion of your project Mitigation is very often costly and time consuming.
My December project requires new telephones for each of the 500 desks in our office. My regular supplier can guarantee 400 telephones at an $262.50 per phone, a 25% discount. The supplier is also reasonably sure to deliver the 500 on time and at the same price. To mitigate the risk of having 100 people without phones I agree that the supplier contract with a third party and buy 100 phones at the standard $350 price
- Total cost of 500 phones from one supplier 500*262.50=$131,250.
- Total cost of my phones from two suppliers (400*262.50)+(100*350)= $140,000
- Mitigation cost $8750
- Solution, pay the slight increase.
Second scenario for a larger company:
My December project requires new telephones for each of the 5000 desks in our office. My regular supplier can guarantee 2500 telephones at an $262.50 per phone, a 25% discount. The supplier is unable deliver the 5000 on time and at the same price. To mitigate the risk of having 2500 people without phones discuss with senior management to contract with a third party and buy 2500 phones at the standard $350 price, plus 10% for shipping
- Cost of 2500 phones from one supplier 2500*262.50=$656,250.
- Cost of 2500 phones from second supplier 2500*385=$ 962,500.
- Total budget for phones $ 1,312,500
- Total cost of phones $1,618,750
- Mitigation cost $ -306,250
- Solution – do you have $306,250 spare, or do you delay project completion?
Acceptance is the decision to accept certain risks and live with them. This means you do not change the project plan to deal with a risk or identify any response strategy other than agreeing to accept the risk if it is too costly or time consuming. A decision must be made to accept the risk, and the consequences. This decision must be made by a person with the highest level of authority. If the risk comes to pass and something fails the decision may mean late delivery of a project or failure as a team.
Second scenario similar to the one above:
My December project requires new telephones for each of the 5000 desks in our office. My regular supplier can guarantee 2500 telephones at a $262.50 per phone, our standard 25% discount. The supplier is unable deliver the 5000 on time and at the same price. To mitigate the risk of having 2500 people without phones discuss with senior management to contract with a third party and buy 2500 phones at the standard $350 price, plus 10% for shipping
- Cost of 2500 phones from one supplier 2500*262.50=$656,250.
- Cost of 2500 phones from second supplier 2500*385=$ 962,500.
- Total budget for phones $ 1,312,500
- Total cost of phones $1,618,750
- Mitigation cost $ 306,250
- Management does not have $306,250 to spend on the project and accepts that there may be a late delivery on some phones.
- A mitigation plan will be put in place to make sure that the problem is handled the best way possible.
As stated above, a Business Continuity and Disaster Recovery (BCDR) plan can be created for anything. The coach of a team has a replacement in mind when players are injured, Floridians board up windows when a storm comes. The most important part of your BCDR is realizing that you need one and start defining the actions that people will take when things go wrong, and at one time or another – they will.
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Cindy King
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