A disaster recovery (DR) plan is a bit like car insurance -- you don't realize its value until you're in an accident. The worse the damage, the higher the cost of repair, the more you appreciate your insurance ... and your DR plan.
But determining your company's specific DR needs is a complicated affair. In formulating comprehensive DR plans, CIOs face a myriad of challenges, not the least of which is determining ROI.
"The cost of creating and maintaining a DR plan is clear, but the ROI will not be tangible until a disaster strikes," said Mike Colesante, president of Terian Solutions LLC, a Houston-based provider of managed backup services. "It is difficult to calculate a quantitative return from a benefit that has a probability associated with it. With a DR plan, you are paying for the peace of mind it brings you."
Measuring ROI of DR
But according to Jeffrey Miller, IT Director at Houston-based Cotton Cos., an organization can measure the ROI of disaster recovery plans, notably data recovery plans, by looking at the cost to the business should a disaster strike.
"If we lost all our data, it would be equal to losing $1 million or so, not counting all the lost productivity and the manpower involved in trying to restore the data," Miller said.
Cotton, which helps restore fire- and water-damaged properties along the Gulf Coast, protects its own data using Terian's Secure Backup service.
It pays $1,200 per month for the service, which provides on-site disk-to-disk backup of 200 GB at LAN speed, as well as the convenience and security of remote data vaulting in two locations. Miller said he is very happy with the overall efficiency of Terian's service, claiming it easily pays for itself each month.
Cotton quantifies the financial consequences of a disaster on the basis of lost revenues per day plus the cost of recovery, he said.
"Without a high-availability solution, the probability of disaster is unchanged whether we have a disaster recovery system in place or not," he said. "The net benefit is the difference between the recovery costs with and without the solution."
DR strategies to maximize ROI
The most important factors a company needs to consider when crafting DR plans are how long it can afford to be down and how current it wants recovered data to be, Colesante said. "These determine the type of plan they will adopt in terms of data restoration."
If we lost all our data, it would be equal to losing $1 million or so, not counting all the lost productivity and the manpower involved in trying to restore the data.
Jeffrey Miller, IT director, Cotton Cos.
Miller noted that companies can also take preventative measures that will lighten the load.
Savings from these types of tools are very real, Miller said. "In addition, the outage window is compressed so that business functions can continue with little or no interruption."
He added that improved operational efficiencies can affect revenues and expenses and contribute cash through sales and savings.
Outsourcing backup and recovery
Colesante said companies are smart to outsource such a vital task as backup and DR to an outside vendor -- a specialist with the right technology, the best practices, the experience and the facilities to manage it successfully.
"A disaster [that causes] data loss or application downtime can result in significant revenue loss, fines or other negative implications for midsize and large companies," he said.
All agree companies that have comprehensive disaster recovery plans in place -- including secure, remote, automatic backup for recovery of business-critical information -– are the companies that will see the highest ROI if and when the worst hits.
Herman Mehling is a freelance writer based in San Anselmo, Calif. He can be reached at email@example.com.
This was first published in October 2007