#4 is the best:

Are there products, services, or supplies without which you would be unable to deliver your own products and services?

Common answer: ALL

But they still don't do anything about it...

Eighty percent of companies without well-conceived data protection and recovery strategies go out of business within two years of a major disaster.

(According to the National Archives and Records Administration - US congress approved research which supports the Gulf Coast Back to Business Act of 2007.)

What do Hurricane Katrina, a burn-your-building-to-the-ground fire, and the great San Francisco earthquake have in common with employee turnover or a simple computer crash? Lots. All could severely cripple your business if you aren't prepared.

Companies can be reluctant to pursue comprehensive disaster preparedness because of the perceived cost; however, a monetizing approach to being prepared can actually provide real return on their investment.

This white paper shifts the conventional thinking of disaster preparedness from being a cost (mitigating risk) to an investment (strategy for growth and future capacity). It presents illustrative case studies of companies that have done just that. It also includes the six questions to ask to make sure you are prepared for a disaster, large or small.

Big and Small Can Be Equally Disastrous

Sustaining a major injury like a broken leg creates an immediate urgency for attention and treatment that is directly related to the level and extent of the pain. However, a small cut may go unnoticed (and untreated) and can soon become infected and eventually lead to life-threatening complications. The difference is an awareness of the potential and predictable impact.

Major catastrophes are not the only events that pose real risk to a company's future. Even a seemingly small event can become a disaster if you're not prepared for it. So, how do you know when you are prepared enough, and for the right things?

Answering six simple questions can quickly raise your awareness about the gaps in your preparedness for events that might impact your business on a day-to-day basis:

1. Who are your true customers?

2. Where does this information reside?

3. What documents and information about your customers are critical to continue serving them if access to the normal working environment is no longer available?

4. Are there products, services, or supplies without which you would be unable to deliver your own products and services?

5. Which information would be crippling to your business if lost?

6. Are there government or industry regulations with which you have to comply to avoid costly penalties or legal and business impacts?

Too many times, C-suite and Board members look primarily at disaster preparedness (BCP and DR) in the context of big disasters like hurricanes, earthquakes, fires, etc. Being prepared only for the major disasters leaves giant gaps in true preparedness.

Being prepared starts with recognizing the impact of seemingly ordinary (albeit almost certain) events that may disrupt day-to-day business. For example, the impact of an ordinary event such as employee turnover (in addition to loosing work capacity) typically results in:

• Loss of corporate knowledge
• Incomplete, delayed, or stopped processes
• Frustrated customers and poorer service
• Lower morale and negative customer service feedback.


Everything is Certain, Eventually

Approximately one in four people in professional occupations voluntarily leave their positions in a given year, according to 2006 statistics. Such statistics provide a useful perspective on certainty (the bright side of probability).

Though you might not have the statistical data available for a given risk, the law of probability will tell you, in fact, not if it will happen, but when it will happen. For example:

(Modern theoretical physics and current-century mathematics have shown that on a long-enough timeline, everything is inevitable - eventuality gives rise to certainty).


• One or more of your key employees will leave voluntarily, taking with them critical institutional knowledge.
• One of your suppliers will not deliver critical materials, leaving you unable to meet production commitments.
• A particularly bad influenza seasons will take half the billing and accounting department out of commission for a week.
• Your telecommunications carrier will fail and you will be unable to reach your customers, and they will be unable to reach you, for hours.


Monetizing Preparedness

Selling a business continuity program to a Board or executive team based only on probability and impact is an upstream swim, even for the savvy. What if you could monetize it in a way that shows a tangible return on the investment?

Several weeks ago, my wife and I booked a room for a weekend getaway using an online service that gives homeowners a way to monetize their excess housing capacity (an extra bedroom) by turning their house into an informal Bed and Breakfast.

This is all about duality – leveraging the dual use of resources required to effectively prepare for a disaster, such as extra capacity and under-utilized resources, to reduce the base cost of the preparedness.

Although not a new concept, this may be a new approach to disaster preparedness. Businesses can apply this approach to the entire value chain from supplier to customer.

How To Monetize Preparedness Programs: Two Case Studies

As part of an effort to create (and monetize) disaster preparedness, we discovered that a hardware manufacturer's only supplier was providing the lubricant used in the manufacture of a line of drives. As it turned out, this was a proprietary lubricant formula, ensuring the entire production line depended on obtaining a proprietary formula from a single-source vendor.

Moving to multiple, competing suppliers we were not only able to reduce risk, but also to standardize on a cheaper blend of lubricant that actually reduced the price of production for the finished good.

With another client, we worked with the executive team on cross-training project managers, administrative assistants, and employees in similar mid-level roles to be able to handle contact center phone banking. This allowed greater responsiveness, eliminated the cost of supplemental resources during peak season, and optimized the end-to-end process.

Enterprises have to be prepared, but beyond that, organizations can save costs, increase revenues, and provide better customer service in a single stroke.

Shifting mindsets from enduring the disaster preparedness effort and cost to leveraging continuity solutions is both savvy financially and a great way to gain competitive advantage at a marginal cost.

The resulting process improvements, operational flexibility, and improved sustainability are possibly the biggest gains: how about starting this conversation with your business leaders?