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A global study into corporate preparedness for disaster recovery and business continuity
November 2011
Half prepared?
The latest global business survey from Regus reveals that companies across the world are almost evenly split between those that do have a disaster recovery plan in place for IT systems or workspace and those that do not. The main reasons for failing to have such a plan in place is reported to be the perceived high cost, although national variations are significant.
This latest Regus survey, which interviewed over 12,000 senior business people in 85 countries, also shows that firms are more likely to have an IT disaster recovery function to help them recover operations within 24 hours than to be able to provide alternative workspace for their staff, should they be unable to access their usual work premises due to a disaster More than half of firms, however, report that they would invest in affordable alternative workplace recovery if the service were suitably priced. Although larger firms are better prepared for disaster recovery (DR) than smaller companies, 26% of larger corporates still remain without a DR facility for their IT systems, and 40% have no workspace DR facility. It is the conclusion of this study that, given the widespread availability and relative low cost of IT and workspace DR, those organisations with none in place are potentially taking an unnecessary risk with their shareholders assets.
Management Summary
Natural disasters, the rising costs of downtime and the increasingly mission critical character of applications have focused company attention towards disaster recovery solutions - yet independent research commissioned by Regus reveals that globally 45% of firms still have no disaster recovery facility for their IT systems. A third of respondents (33%) report that the perceived costs of disaster recovery are prohibitive and more than half (55%) agree that most firms like theirs would buy the option to access a workspace disaster recovery facility if that option were priced at around $100/month. It may be the case that economic pressures are encouraging management to cut costs by reducing spend on DR. However, given the widespread availability of low cost IT system and workspace disaster recovery services and facilities in todays marketplace, this may be an area which shareholders and insurers are encouraged to investigate in the light of this surveys findings. Companies that do have disaster recovery are more likely to have computing systems up and running within 24 hours (55%), than provide an alternative workspace for staff within the same time frame (45%). Some interesting national differences emerge. In particular, in Japan only 37% of firms have a disaster recovery facility for their IT systems and just under a third (32%) have a workspace disaster recovery. More companies in Australia (70%) and Germany (69%) and the UK (67%) are prepared for an IT outage than the global average (55%). Less than half of consulting companies (46%) have workspace disaster recovery, compared with 57% of financial services companies.
Introduction
Disaster recovery is maturing from being regarded as an additional safety net to a must-have business critical function and reports indicate that the global disaster recovery / business continuity market is set to reach $39 billion in 2015.1 With reports indicating that the average incident can cost up to $ 500,000,2 and Symantec revealing that IT is becoming increasingly mission critical to organizations, with 60% of all applications now deemed mission critical, it is not surprising to find that disaster recovery has made it to the forefront of the agenda.3
In addition to causing IT system outages, however, dramatic natural disasters and criminal damage can make it impossible even for staff to access their usual workplace, severely undercutting productivity unless alternative workspace arrangements can be rapidly provided. In particular, recent global events have drawn attention to the importance, not only of providing rapid IT backup, but also of providing for entirely new premises at very short notice in order for businesses to continue operating smoothly. Fires, floods, burglary, criminal damage and natural disasters will all affect both the technology and the actual workspace where business critical activities are carried out, so although personnel may be able to access information within 24 hours, they may well not be able to return to the office for a longer period of time, relying on home internet connections of varying speeds and no access to office facilities such as printers and meeting rooms for example. Larger companies may also be able to rely on their larger property portfolio to relocate staff in the event of an emergency, critically overlooking the fact that offices may be very distant from each other and not provide a suitable space. The tragic tsunami that hit Japan in March 2011, major flooding in Australia in January 2011, earthquakes in Chile and New Zealand and damage caused by Hurricane Irene are just a few of the natural disasters that affected the world in 2011 halting operations and in many cases leaving businesses with damaged premises and no plan B as to where to relocate their staff. Although these disasters had global resonance and businesses often have operations set up in various countries, significant national differences are revealed when analysing how prepared businesses are for disaster and interruption.
1 2 3
Continuity Central, ABI Research estimates business continuity and data disaster recovery market growth, 10th March 2010 Symantec, Disaster Recovery Research Report, 2009 Symantec, Disaster Recovery Research Report, 2009
Introduction
The cost to businesses, but also insurers can be devastating and a joint report by the Business Continuity Institute and the Chartered Insurance Institutes General Insurance Faculties encouraged the insurance sector to recognise and encourage clients in the development of their own business continuity programmes in terms and pricing of business interruption insurance.4 Lloyds of London has also warned that the insurance industry faces significant difficulties after record claims following the Australia, New Zealand, Japan and the US catastrophes in 2011. The first half of 2011 is in fact reported to have been the costliest six-month period in the insurance markets history.5 The latest Acronis report, for example, reveals that Germany is the country where firms are most confident of their back up and business continuity processes, closely followed by the Netherlands. The rest of Europe, however, fared badly with the UK and France scoring below average.6 In the USA, where just over half of companies test their backup facilities annually (54%), less than a third (29%) had work at home days highlighting that the remaining companies have no measure of whether their company can continue to effectively operate with employees entirely working from home and using their own resources.7 In addition to this, a report identifying the US and Japan as the countries most likely to incur huge expenses due to natural disasters, reports that its emerging economies such as China and India that pose a higher risk to investors as they are lacking the capacity to deal with natural catastrophe. Gartner, fortunately, highlights that Indian companies in particular see improving business continuity in the year ahead as an objective second only to achieving business growth.8 Mexico and Canada were also rated as at high risk by the report.9
The Business Continuity Institute and the Chartered Insurance Institutes General Insurance Faculties , Insurance sector views on business continuity, 2010 The Guardian, Lloyds of London hit by record claims for natural disasters, 21st September 2011 6 Acronis, The Acronis Global Disaster Recovery Index: 2011, 2011 7 The Conference Board, Preparedness in the Private Sector-2011, 2011 8 Continuity Central, Gartner survey identifies business continuity as one of the top two priorities for Indian organizations, 8th March 2011 9 Maplecroft, Natural Hazards Risk Atlas 2011 (NRHA),2011
4 5
We have a disaster recovery facility which ensures our computing systems are up and running within 24 hours
Australia Germany UK Netherlands Belgium South Africa Global Average USA India Canada Mexico Brazil China France Japan 0% No 10% 20% Yes 30% 40% 50% 60% 70% 80%
We have a disaster recovery facility which ensures an alternative workspace will be up and running within 24 hours
Netherlands Germany Belgium Australia China UK Global Average France Mexico Brazil South Africa USA India Canada Japan 0% No 10% 20% Yes 30% 40% 50% 60% 70% 80%
Globally 33% of respondents believe that the cost of disaster recovery is prohibitive and the majority (55%) of firms agree that businesses like their own would be willing to invest around $100/month to access a workspace disaster recovery facility in case of emergency.
China Japan Mexico India Canada South Africa Global Average France Brazil USA Netherlands UK Australia Germany Belgium 0% 10% 20% 30% 40% 50% 60%
At the other end of the spectrum, fully 50% of Chinese companies believe that business continuity is too expensive, followed by 47% of firms in Japan, where take up was the lowest, Mexico (45%) and India (44%).
I believe most firms like mine would buy the option to access a workspace disaster recovery facility if that option were priced at around $100/month
China Mexico India Brazil South Africa Canada Japan Global Average Netherlands Australia USA Belgium France Germany UK 0% 10% 20% 30% 40% 50% 60% 70% 80%
Large
Medium
Small
0%
10%
20%
30%
40%
50%
60%
70%
80%
We have a disaster recovery facility ensuring alternative workspace is available within 24 hours We have a disaster recovery facility ensuring IT systems are up and running within 24 hours
Only 51% of small businesses have an IT business continuity plan in place compared to fully 74% of large businesses and, in spite of reliance on alternative offices and buildings, larger companies (60%) are also far more likely to have a workspace business continuity plan in place than small companies (43%). The perceived cost of disaster recovery is a deterrent to over a third of small firms (36%) and less so to larger firms (20%) that have more infrastructure to protect and staff to relocate. Although more than half of all firms would purchase a workspace business continuity plan priced at around $100 a month, larger firms (66%) are more likely to do so than smaller companies (53%).
Media
ICT
Consulting
Finance
0%
10%
20%
30%
40%
50%
60%
70%
80%
We have a disaster recovery facility ensuring alternative workspace is available within 24 hours We have a disaster recovery facility ensuring IT systems are up and running within 24 hours
Conclusion
Across the globe around half of firms have no formal disaster recovery facility in place for their IT or their workforce. This lack of planning for the recovery of IT operations and for relocating staff that cannot access premises could damage businesses irrevocably should they experience extensive downtime or damage to their premises.
Most businesses appear to run this risk due to the high perceived cost of Disaster Recovery, but also report that they would be willing to pay around $100/month to access a workplace recovery facility in case of emergency. This is an important indication that although the majority of businesses are taking a gamble with the resilience of their operations, the main barrier to overcome is one of perceived cost and not mentality. With more and more affordable business continuity alternatives being made available around the globe and national differences in pricing rapidly disappearing thanks to international service providers, it is likely that more businesses will finally stop taking the risk of expensive business interruption and invest in business continuity plans that allow their systems and their staff to continue working seamlessly from fully equipped locations.
About Regus
Regus is the worlds largest provider of flexible workplaces, with products and services ranging from fully equipped offices to professional meeting rooms, business lounges and the worlds largest network of video communication studios. Regus enables people to work their way, whether its from home, on the road or from an office.
Customers such as Google, GlaxoSmithKline, and Nokia join hundreds of thousands of growing small and medium businesses that benefit from outsourcing their office and workplace needs to Regus, allowing them to focus on their core activities. Over 900,000 customers a day benefit from Regus facilities spread across a global footprint of 1,200 locations in 550 cities and 92 countries, which allow individuals and companies to work wherever, however and whenever they want to. Regus was founded in Brussels, Belgium in 1989, is headquartered in Luxembourg and listed on the London Stock Exchange. For more information please visit: www.regus.com
Methodology
Over 12,000 business respondents from the Regus global contacts database spanning 85 countries were interviewed during August 2011. The Regus global contacts database of over 1 million business-people worldwide is highly representative of business owners and senior managers across the globe. Respondents were asked a wide variety of questions including ones about their economic performance and expectation, along with their views of the business continuity market and their use of disaster recovery alternatives within their own firms. The survey was managed and administered by the independent organisation, Mindmetre www.mindmetre.co.uk.
Notes
Whilst every effort has been taken to verify the accuracy of this information, Regus cannot accept any responsibility or liability for reliance by any person on this report or any of the information, opinions or conclusions set out in this report.