Valuing Business Continuity

Calculating Business Impact

Companies that undertake business impact analysis should expect to spend at least a few weeks on the process. For large organizations, the time frame could be several months. A consulting firm can organize the process, but the client’s top management, including the president, the chief financial officer, the chief information officer, and others also will need to be involved.

“The first thing that should be done is a telecommunications audit that looks at systems, circuits, and who the providers are,” notes Marc Agar, president and CEO of CA Communications, Inc., a Wayzata company that advises companies on business continuity. “Then you try to figure out what’s mission-critical.”

Impact analysis involves considering recovery time objective, or how long an organization will accept a system being down, and recovering point objective, or the amount of acceptable data loss.

3pL, for example, determined that certain operations systems, such as freight tracking systems, were mission-critical, while accounting and some other systems could afford to be down for a few hours.

And indeed, impact analysis involves considering recovery time objective, or how long an organization will accept a system being down, and recovery point objective, or the amount of acceptable data loss. A critical health care system might rate both acceptable downtime and data loss at zero, notes Steve Lazer, principal consultant for Midwave, a technology-system builder in Eden Prairie. In contrast, an insurance company also might have a short downtime threshold, Lazer says, but, because data is also stored on paper, its acceptable data loss might be relatively high.

Fallon is more aggressive about its downtime than data loss, and for similar reasons. The agency sends backup tapes to its off-site storage location once a week, which means that, in the event of a major disaster, the agency could lose, at most, one week’s worth of data. In reality, much less data would be lost, McGeheran explains, because employees work in independent teams and store most of their work on their laptop computers.

Shorewood-based Technology Management Corporation helps clients, including Fallon, with business impact analysis. After auditing the mission-critical systems, Technology Management works with clients to create a matrix showing all client touch points, such as Web sites, call centers, and communications links between offices, says company president and founder Cheryl O’Brien-Wilms.