Valuing Business Continuity

Communication systems are critical for 3pL Corporation, an Urbandale, Iowa–based third-party logistics company that manages freight for its clients. When power went out at the company headquarters for two hours recently, clients didn’t even notice. That seamlessness was due to 10 3pL employees working out of an Altoona, Iowa, business continuity workspace operated by LightEdge Solutions during the outage. LightEdge is a managed-services provider headquartered in Iowa with offices in Minneapolis. Another eight employees worked on laptop computers at 3pL headquarters and connected to the Internet via a backup data link that operates wirelessly.

3pL’s business continuity plan worked the way it was supposed to. As soon as the outage occurred, 3pL called LightEdge. Personnel began configuring 10 desktops to 3pL’s specifications—a task simplified by the fact that 3pL outsourced many of its critical applications to LightEdge, which hosted those applications at the Altoona location.

3pL may have saved thousands of dollars in lost revenues. But that wasn’t the most important benefit. As 3pL vice president of technology integration Carl Waldenmaier puts it, “If we can’t move loads, our reputation is destroyed, and that’s something you can’t put a price on.”

Travis Thompson, vice president of engineering for LightEdge, defines business continuity as “how to keep a business as a whole going in times of crisis, including how to get payroll out and how bills are paid.” He contrasts it with “disaster recovery,” which he views as a more limited IT term that encompasses “what it takes to bring e-mail and other systems back on line.” In addition to fiber optic cable getting cut or power outages, which typically are of limited duration, business continuity looks at factors that could have a longer-term impact, such as the complete destruction of a company’s office building.

Of course, no two companies have the same continuity plan. Another business that relies heavily on communications is Fallon, a Minneapolis-based advertising agency. “One of our mission-critical systems is the ability to communicate with clients and vendors,” says Rich McGeheran, Fallon’s director of information technology. Accordingly, a key element of Fallon’s business continuity plan is an agreement with its telecommunications service provider to re-route calls to a different number, such as a cell phone or another company location, if phone service is interrupted.

Another important consideration for Fallon is data archiving, as the agency’s contracts with clients often include a commitment that the agency will retain client files for seven years. Off-site data storage helps ensure that Fallon can meet that goal, even in the event of a disaster.

Perhaps the biggest business continuity challenge is not finding a way to address every possible incident that could occur but rather, determining how much a company can afford to spend on protection. Making judgments about what risks can and cannot be tolerated is part of a process called business impact analysis, which drives a company’s business continuity plan.