Feature

Managers' greatest fear is systems loss

UK managers fear the loss of their IT systems more than any other disaster, according to a survey out this week.

Nick Huber

Organisations with business continuity plans rarely test their disaster recovery arrangements to see if they will actually work, says the survey from the Institute of Management (IoM).

These findings - timed to coincide with Business Continuity Week - follow a new requirement for Stock Exchange-listed companies to outline their business continuity arrangements in their annual reports.

Companies that flout the new reporting requirement risk having investment withdrawn, industry experts have warned.

IT precautions - including effective data back-up and the ability to relocate a business with a business continuity provider in an emergency - should be central to any risk management plan.

Responsibility for meeting the new standards will fall heavily on the shoulders of IT directors, who will usually report to finance directors on the issue.

The loss of IT systems was the overriding fear of 341 UK managers of companies of all sizes surveyed by the IoM.

Eighty two percent of managers questioned said the loss of IT capacity would have the greatest impact on their costs and revenues, followed by fire (62%) and loss of skills (59%).

Despite these concerns, however, 14% of company managers admitted that their company did not have any business continuity arrangements in place.

For the companies that had business continuity arrangements, tests to check the effectiveness of such plans were often non-existent or too infrequent.

Forty percent of managers surveyed admitted that their companies did not test the effectiveness of their plans at all.

Just under half of firms only tested the effectiveness of their business continuity plans once a year. The Business Continuity Institute recommends that companies check their business continuity arrangements every six months.

"A lot of people back up data but never go and test to see if it can reload from the back-up," said John Sharp, chief executive officer of the Business Continuity Institute.

Investors could also reconsider their investment in listed companies if the business lacks proper business continuity arrangements, Sharp added

Be prepared with business continuity plans

"The stock difficult questions are things like what happens if the phone lines go down?" says Steve Vaughan, chief executive at Synstar, the IT services and business continuity supplier.

  • Companies' business continuity arrangements need to focus on the risk of a failed power supply or maintenance contract as well as major disaster scenarios, such as fire and flood

  • Key danger areas to watch are single point failures of IT systems - with knock-on implications - and external security threats, from hackers

  • Many business continuity policies will have acceptable risks in some areas, such as data management, but can be weak in others, such as online security

  • You should allow between three and six months to implement a business continuity plan, according to industry experts.


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    This was first published in January 2001

     

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