Disasters, whether natural or man-made, can result in costly network downtime, breaches in sensitive information and permanent damage to a company’s reputation. For a business to mitigate these issues and maintain business continuity, appropriate disaster recovery (DR) procedures must be in place. CFOs are unlikely to be concerned with what they see as strictly an IT issue, so it is important for CIOs and other IT leaders to position DR as integral to the overall financial health and security of the business.
IT and finance leaders have the same ultimate goal: the success of the company. With that overarching objective in mind, they can work together to help the business move forward. What will help in this endeavor is the old adage of putting yourself in someone else’s shoes: IT leaders must attempt to think like their counterparts in finance.
Think like a CFO
For IT leaders to ensure their requests for DR are heard and acted upon, they must speak the same language as their CFOs. It helps to have a solid grasp on the concerns and priorities of CFOs. Ensuring business continuity is a significant portion of a CFO’s job, but the CFO may not be familiar with how an unguarded IT environment can affect the company’s bottom line. That’s why making the case for DR will be more effective if IT leaders frame it in terms of return on investment (ROI) and cost avoidance.
That requires IT department to document and report on potential costs for downtime in the absence of a DR plan. According to independent research commissioned by CA Technologies, North American businesses are losing $159,331 per year through IT downtime with the average North American company suffering at least 10 hours of IT downtime per year. During these periods when business critical systems are interrupted, companies estimate that their ability to generate revenue is reduced by 29%. 1 Those kinds of numbers can make a CFO take notice.
In addition, there are costs that companies in heavily regulated industries, such as healthcare and finance, can incur where compliance penalties and fines come into play because of unexpected downtime and potential data loss. Don’t forget to take into account potential damage to a company’s reputation. Downtime can result in unhappy customers, bad press and, ultimately, lost business and fewer new customers.
IT leaders should also position DR as an essential element of risk reduction to make its value relevant to CFOs. Understanding the risks to business continuity, customer satisfaction and ultimately, the company’s bottom line, if a disaster strikes can help CFOs be more amenable to investing in DR.
Communicate. Cooperate. Collaborate.
Once the CFO and IT leader agree on the importance of a DR plan, a smooth working relationship must be established. Cooperation and frequent communication are essential to making it successful. IT leaders should willingly team up with their CFOs to achieve overall company objectives, with an emphasis on aligning the finance and IT organizations around key goals.
Clear, concise communication is necessary. CFOs often find that CIOs speak in abstract terms or “technology-speak,” while they would prefer more granularity. Transparency is also important. CIOs should be candid about what works and what doesn’t and what the true benefits of DR are. Some give-and-take will also be required. CFOs are under tremendous pressure, just like CIOs are. Be willing to compromise.
Proposing Cost-effective DR Solutions
DR can be a daunting challenge when creating a business plan, so CFOs tend to procrastinate on the issue. Devoting funds to something that may or may not happen can also make CFOs more willing to put DR on the back burner. To expedite decision-making and keep DR top-of-mind, IT leaders should research several cost-effective solutions and present them to the CFO with any necessary backup documentation, information on best practices and other support.
Explaining the scalability of proposed DR solutions can help sell them. CFOs are likely to be receptive to solutions that allow for reducing or increasing the amount of services as dictated by their business environments, which can generate savings.
Among the solutions should be outsourcing DR. Outsourcing some aspects of IT, such as DR, can lighten the burden on the in-house team and reduce the costs of the IT department as a whole ─ something that will be of interest to CFOs concerned with cost reduction. DR is likely not an area of expertise for the in-house IT department, so shifting it to a provider that specializes in DR can save money in terms of the extra staff required to power an in-house DR program. Freeing the IT team from hands-on responsibility of DR also allows them to focus on endeavors where they can be most effective and positively impact the bottom line.
Reasons to Take DR to the Cloud
The cloud has become an increasingly attractive option for DR, in part because it offers these benefits:
- Cost and resource reduction: DR in the cloud minimizes the need for costly data center space and can cut down on the amount of IT resources needed.
- Simplicity: There is no need for back-up tapes or unnecessary hardware.
- Quick recovery: Information can be transferred from one data center to the next without reloading each server component.
- Scalability: Storage capacity can be quickly scaled up or down to fit a business’s needs.
The options for DR in the cloud are limited only by the needs and budget of a business, making this a highly customizable, nimble option. However, it is necessary to research the quality of cloud services providers (CSPs) and make sure they can meet the needs and expectations of the business before signing an agreement.
A CSP should have geographically diverse data center locations to ensure that, in the case of a natural disaster, the two required data sites will not both be compromised. It is also a good idea to choose a CSP that has significant experience in cloud-based DR. CFOs and CIOs alike feel more confident with proven solutions. A clearly worded Service Level Agreement (SLA) will help ensure that the needs of the business will be met to its expectations.
For healthcare companies and others in highly regulated fields, it is vital that the CSP have a high level of capability in DR for environments subject to regulatory requirements along with the appropriate security protocols and credentials. With a careful vetting of cloud-based DR providers and a solid understanding of the DR needs of the company, the process of finding a provider that will meet the aforementioned requirements will be fruitful.
When a business operates without a DR plan, it is taking a risk. That should be of concern to CIOs and CFOs alike. The key to making the case for DR to CFOs is to speak about it in business terms. Converting the business case into action is then a matter of communication, collaboration and the presentation of options that can meet DR needs as well as provide tangible financial benefits. Cloud-based DR can do both.