In my last post, This Old Infrastructure, I referenced a theoretical model, the “Three Pillars of Technology Investment,” that I created several years ago to talk to audiences about where investments get their “structural integrity.” I wrapped up that post by referencing disaster planning and how important it is to any deployment of new technology. Because disaster planning is so important, I thought you would appreciate more detail around these concepts.
I used to start my disaster planning by daydreaming about “a day in the life” of various employees of my company. I could picture various people doing their jobs and relying on business systems and processes, thinking of all the ways that people relied on specific technology. Sometimes, still in the design phase, I would catch a flaw and simply tweak the design to accommodate it. In other cases, there was no easy way to avoid the design flaw, so I had to ask “what if” and plan for contingencies.
Any new implementation of technology can be a nightmare—keeping CIOs up at night. Disaster planning is all about the “what ifs” vis-à-vis a company’s business processes. The more you understand about your company’s business processes, the better you will do at disaster planning. To be clear, disaster planning is more about knowing your business than it is knowing your technology.
For example, if a business process is as simple as turning on and off a light in a given room, that’s a pretty simple business process—just flip a switch. Disaster planning for such a simple process might involve nothing more than keeping some spare light bulbs on hand as well as a “flashlight” in the event of a power outage. But what if the business process was as complex as the entire supply chain to generate and deliver the electricity itself?
In such a process, the supply chain might start with rain and runoff building up behind a hydroelectric dam. When a mechanical valve is opened, water begins rushing through a series of large turbines. To generate electricity, those turbines have to be properly maintained for the spinning motion to convert physical force into electrical currents. Then, for electricity to be transported, it has to be transformed and stepped-up to an appropriate high voltage to be transmitted over long distances. Once it arrives in your neighborhood, the electricity has to go through a reverse process where it is stepped back down through a series of transformers to a usable voltage for your home or business. Once it passes through the circuit breakers in your power panel, it is available for your general use. Then, and only then, does the process of flipping your wall switch become critical. With such a complex business process, disaster recovery becomes far more intricate.
So how do you plan for this kind of large scale disaster? You start by engaging your functional leadership in the planning and asking the “what if” questions. For example, “If you lost your Internet access tomorrow, how would that affect you and how would you work around it?” If the functional heads or someone on their teams don’t have the answer, that should be a red flag that you have some work to do. Your disaster recovery investment priorities should be based on this kind of prerequisite question.
Investing to recover from or to avoid a disaster is no different from any other kind of technology investment. The ROI of a disaster recovery investment is based on probabilities of certain contingencies occurring and the cost if they do occur. However, there’s one neat twist that not everyone understands about ROIs for disasters: You can actually invest in negative ROIs.
If you are staring at two possible investment alternatives and the ROI of the “purchase disaster recovery” technology is negative 5 percent, that doesn’t automatically rule out the investment. What matters is the ROI of the “do nothing” or “status-quo” scenario. Given the probability and cost of system failure, if the ROI of the status quo is negative 20 percent, then you should always invest in the disaster recovery, even when it is negative.
Calculating the ROIs of specific disaster recovery scenarios can be tricky, but learning a little bit of the basics behind the financial calculations for such scenarios can help you have more meaningful discussions with your company’s leadership team. By converting the technology “what ifs” into hard numbers for executives, you are more likely to get your disaster recovery projects funded. After all, if you know what keeps your CIO up at night, you’ll know where to focus your disaster recovery efforts. I will go into more detail about exactly how to calculate the ROI of specific disaster recovery investments in future posts.