The business impact analysis provides an empirical basis on which to determine business aligned recovery services and their attributes – Part 2

21. Oct, 2009 0 Comments

dickb2 Build an excel table and enter each of the business units along with the revenue and contribution (ie the contribution to the organization’s bottom line). Enter projected revenue and contribution as well. Now you have an empirical basis for ranking business units based on their revenue and/or contribution to the organization. BIA calculations often include not only lost sales and revenue, but costs of operating during the down time. These costs often include a per hour loss based on what it costs to maintain head count and other internal carrying costs during the disaster period. Enter head count and average carrying cost to your spreadsheet.

Costs based on lost customers also need to be taken into account. Add columns to calculate impact such as 5% loss of customers permanently, or perhaps 2% of the biggest customers are lost and 10% of the remaining customers too. The revenue loss for the major and minor customers can now be calculated into your model.

You now have the ability to run some calculations that indicate the impact of a disaster on each of these business units. The prudent DR planner will seek Finance Office assistance and guidance during this process. If you can get Financial Office buy in it makes life much easier for the prudent DR planner. Often times the calculated Business Impact will grow exponentially over time. The longer the outage, the more lost budiness.

Now you have the key elements to help you understand the cost to the organization for each business unit in the event of a disaster. This information allows you to align your DR plans with business impact using business numbers that have been blessed by the finance office.

By Dick Benton, Principal Consultant with GlassHouse Technologies Inc.