Studies Show Business Owners Confuse Backup with Disaster Preparedness

In the past few weeks, I’ve received news of two different surveys that reach similar conclusions: businesses are not as prepared to face disasters as they think they are. Here in California—where we have wildfires in the hot season, mudslides and flash floods in the rainy season, and earthquakes all year round—disaster preparedness is a common theme. But disaster preparedness is rather like backup: everyone knows they should do it, but most people don’t. I have a haphazard earthquake kit, myself: some clothes, some blankets, some food, and a multi-wave radio; certainly not enough for more than a day or two. And as far as preparing my business for a disaster goes…

Nope, not even earthquake insurance. Nor specific insurance to cover my computer equipment, though unlike the Ur-Guru, I don’t actually own enough computer equipment to need a separate policy in addition to my renter’s insurance.

And this is a problem. Even though I don’t need very much more than a working computer and my data to run my business and my business doesn’t need to live on after me, the complete lack of a business continuity plan is an issue. Big companies not only have plans, they have drills—like fire drills—to make sure everyone knows what to do and where to go in the kinds of emergencies that the planners can foresee. Even a one-person business can benefit from making a plan about what to do if the house burns down in the middle of a huge project. Or how to get the clients notified if you end up comatose in the hospital.

I have an advance directive to cover health decisions, but I don’t even have someone who knows my computer password to get into Outlook and notify the people in my address book if I die. (I gave my password to the Ur-Guru, but he can’t remember it because it doesn’t mean anything to him. And anyway, he lives too far away.)

My guess is that a lot of sole proprietors don’t have business continuity plans because we don’t really think of ourselves as business owners, even if the IRS does. It seems that owners of slightly larger businesses fall short in the area of disaster preparedness for a different reason. The 2009 Disaster Recovery and Business Continuity Survey conducted by Agility Recovery Solutions (with the aid of Hughes Marketing Group) surveyed 700 small and mid-sized and found that while 94% of them have a plan for data backup, only 42% had tested their business continuity plans, even though 52% of them had experienced unforeseen interruptions to business.

The good news is that 94% of these businesses are backing up their data. That’s a shockingly high number, in fact, compared to surveys conducted by various storage companies over the years. On the other hand, if you read the complete report, it would appear that most of the companies surveyed were financial institutions and insurance agencies, so regulations might have something to do with their high scores in the backup department.

In any case, it’s certainly true that being able to restore your data is only part of what you need to keep your business running. You need the computer equipment, the Internet connection, the phone lines, the office space, the employees…and most of the companies surveyed would have much more trouble replacing those things than restoring their data. The Ur-Guru keeps both a DSL and a cable Internet connection to make sure he doesn’t experience any interruptions to his connectivity, and certainly any business of any size needs more than one ISP, with an automatic fail-over.

Another survey, this one commissioned by SunGard Availability Services and conducted by Harris Interactive, addresses the state of disaster recovery in larger enterprises. The conclusion: the IT department and business management have different ideas about what matters in disaster preparedness and disaster recovery. You can look through the handy slideshow below for the details, but in case you’re reading this on your BlackBerry or the slides don’t come through in the e-mail version, I’ll summarize a few of the key points, kindly provided by the Porter Novelli press release:

• 86% of IT says availability of network, data, systems and applications important—while only 65% of business executives say this is important
• 74% of IT says disaster recovery is important—while only 49% of business executives say so
• Both IT (70%) and business (63%) say the tolerance for IT downtime in their company has grown shorter, but data shows that IT is still not receiving the budgets necessary to achieve rapidly declining recovery timeframes

Backing up data is relatively inexpensive, but replacing network, systems, and applications for a large enterprise—or even one of its local offices—can be pricey and time-consuming. And, again, before you can replace the systems, you have to have an office to put them in. You have to have electricity to run them. You have to have an Internet connection. And you have to have employees to operate them.

It shouldn’t be too great a surprise that the IT decision makers consider inadequate funding a bigger problem for disaster recovery than the business decision makers do. IT often reports to the CFO and is most often thought of as a “cost center.” Never mind the fact that you couldn’t run your business without it, it’s still not creating profit. But I digress.

Now, of course both Agility and SunGard have a vested interest in emphasizing the importance of disaster preparedness. But just because they make their money helping companies set up business continuity plans doesn’t mean you don’t need a plan. Maybe it’s time to do some calculations. How fast could you replace your equipment? How much would it cost? Would your insurance cover it? And what about paper records, and books? Is there anything that you need to make copies of and send off-site? Where do you keep your insurance records? Do you have a sa
fe deposit box? Would you need to rent office space, or could you do your work at the local coffee shop? Is there someone who could take over your work if something happened to you? Is there someone who knows how to reach your clients if something happens to you?

What are your plans to keep your business going in case of disaster? Backup is just the beginning.