Exploring the Cost of Unexpected Downtime
When it comes to protecting your business, you can never be too prepared. In the competitive investment management world, downtime for any reason is not an option. Whether it be a natural disaster, inclement weather, or even a flu epidemic sweeping the office, your firm needs to have both Disaster Recovery and Business Continuity Plans to ensure that your firm doesn’t undergo the costly financial and reputational losses in the case of downtime.
Firstly, it’s important to understand difference between Disaster Recovery and Business Continuity Plans.
Disaster Recovery refers to the policies and procedures to enable the recovery of key technology systems after the event of a disaster. A robust DR program ensures that data centers are highly redundant, have multiple entry fiber paths and multiple power grids, undergoes annual testing, and comes with around the clock support, as outages can easily occur outside of business hours.
Business Continuity refers to a document that outlines how your firm will respond when confronted with unexpected business disruptions. A cohesive Business Continuity Plan has proven methodology to ensure your firm is prepared for the unexpected, includes a detailed risk assessment and business impact analysis, has strategies and plan development, includes testing and training, and is continuously evaluated and maintained. Our new eBook outlines the seven steps to create a BCP, download your copy here.
Now that we've established the differences in the two plans, try to envision what a potential outage would cost your business. Items to consider include:
- How long would it take to get the proper resources in place?
- Who will communicate updates key shareholders?
- Who are the key shareholders both externally and internally?
- If systems are down, how will you communicate?
Not having a plan elongates the recovery process and wastes precious time and money in doing so. However, the financial losses suffered from downtime are only part of the equation. Think of the reputational losses your firm could face without DR or Business Continuity Plans in place - an outage with no plan in place could take days or even weeks to repair, depending on the scenario. Investors want assurance that your firm has plans for remediation, and the long term financial losses from a reputational loss is incalculable.
If you're considering outsourcing either of these plans - it is important to ensure your provider is well-versed in the financial industry, fully understands the regulatory requirements involved, has first-class support, and technology and resources in place to effectively build and manage Disaster Recovery and Business Continuity Plans.