StreamALERT AP: January 2006

Disaster Recovery:  Is AP Ready?

The terrorist attacks on the World Trade Center on September 11, 2001 clearly demonstrated the need for every organization to institute a comprehensive disaster recover and business continuity plan. However, terrorism is just one threat that could disrupt business. In today’s world, organizations are faced with a number of internal and external threats: natural calamities, public health crises, technology and infrastructure breakdowns, workplace violence – the list goes on.

The costs associated with these disruptions can be significant. A recent study revealed that the average disaster-related cost to businesses, in terms of lost revenues, is more than $1 million per hour. Multiply that by the amount of time it takes to get an organization up and running after a disaster and the losses are overwhelming. Given that the costs of lost business are staggering, it is no surprise that disaster recovery planning is considered a best practice.

The advantages of a well-designed disaster recovery plan are obvious. Disaster planning encourages employees to think ahead and minimizes bad decision-making in the event of a disaster. Additionally, a good disaster recovery plan enables organizations to recover from a disaster quickly and mitigate the costs associated with downtime. In some cases, disaster recovery planning can have an immediate monetary benefit in terms of lower insurance premiums and reduced legal liability.

Disaster recovery planning, however, is extremely proactive and extends beyond merely picking up the pieces after a disaster. A comprehensive disaster recovery plan should have two components – preventive measures to avoid certain foreseeable disasters and a set of strategies to recover from an unpredictable disaster.

Here are a few tips to help your AP organization move in the right direction:

• Set up brainstorming sessions with key employees to periodically discuss preventive measures and steps to be taken in the event of a disaster. Cover all possible internal and external threats.
• Identify potential impacts and underlying risks. Separate the issues that can be controlled and those beyond your control to prioritize actions that need to be taken.
• Establish pre-determined policies and communicate these to all employees to reduce confusion and minimize bad decisions.
• Determine the actions you require from key suppliers if a disaster occurs, and establish the necessary Service Level Agreements (SLA). SLAs play a key role in disaster recovery.
• Use the above elements to create a documented disaster recovery plan.
• Test the plan under a number of scenarios to ensure that it works as expected.
• Revisit the plan regularly and update it according to changes in the business environment. A disaster recovery plan should be a dynamic, ongoing process. 

To  learn more about how PayStream Advisors can assist you in researching disaster recovery plans for your company, call Mark Colwell at 704-523-7357 x223.