As more and more African organisations wake up to the need for business continuity, ContinuitySA’s GM: Africa, Willem Olivier, says that while insourcing might seem like the easy option, there are some significant pitfalls–as well as higher costs over the long term.
“If Africa is to realise its massive potential, it has to present itself as a safe place to do business,” says Olivier. “Credible business continuity plans and arrangements are one way of doing that. Based on my many years of working with African companies, I feel that outsourcing to an expert business continuity provider is the smart way to go. African businesspeople have many challenges to overcome, so why add another, especially one that is both important but non-core?
Olivier lists some of the main dangers of insourcing business continuity based on his experience in Africa particularly:
* Lack of process and a corporate champion. Given that the business continuity environment is not yet mature across much of the continent, responsibility for business continuity is likely to be assigned to a relatively junior manager. What this means, says Olivier, is that while companies spend a great deal of money acquiring premises and fitting them out with hardware and furniture, equipment is often “borrowed” from the IT disaster recovery centre when needed, and not replaced. Over time, the disaster recovery capability loses its capacity to provide the company with sufficient backup in an emergency.
* Testing is patchy and lacklustre. The best business continuity plan and facilities are worthless unless they are continuously tested. Most companies lack the discipline to test properly and regularly because they are immersed in their core business, and bad test results are seen negatively.
* Practical issues are often overlooked. It’s easy to see disaster recovery purely as a technical issue. Not so, says Olivier, as many companies find to their cost when they have to move for example 30 or 100 staff members to the disaster recovery site. “At ContinuitySA, we have developed the concept of the ‘battle box’, a physical and virtual store of everything that individuals need to work at a strange site,” says Olivier.
* Incorrect siting of the disaster recovery facilities. A number of important considerations have to be taken into account when siting the disaster recovery facilities, and it’s easy to make errors. These would include ensuring it is far enough away from the production site not to share the same telecommunications, water and power infrastructures, while still being accessible to staff.
* Loss or change in BCM skills profile. Companies that develop their own recovery solution often overlook the skill that is required to build, implement, manage and test a recovery facility.
* Skills profile of the Outsourcer. BCM skills in Africa are extremely scarce and often very expensive. In a company such as ContinuitySA over twenty years of specialising in Business Continuity supplying advisory services, work area recovery, IT disaster recovery (or IT systems continuity), server hosting, data replication, high availability and several other specialised skill comes naturally as this is built into our DNA.
* Syndicated versus dedicated. When companies build their own recovery facilities they will in all cases be dedicated to just that company. This makes the internal solution more expensive over time without the company realising it. When outsourcing there are several options where cost saving can be established through syndicated models.
* Cannibalisation of critical recovery equipment. Companies that insource their IT recovery equipment are often faced with a situation where they need to remove equipment from the recovery centre to put into production to act as a stop gap until the next financial year.
* Financial misconceptions when building a recovery facility in an insourced model. Many companies believe that they can build a recovery facility at a lower cost compared to a recovery company. In many cases this can be achieved by using redundant furniture and computer equipment which is then installed in an old office or branch the business may have. This way the initial capital expenditure is low.
* Influencing factors to consider. When considering insourcing versus outsourcing, companies should evaluate the following factors: Costs hidden and direct, Capex versus Opex solutions; Skills and training of staff to ensure they are specialised in understanding BCM; Experience in testing or performing a recovery when a disaster hits; Available resources in terms of people and intellectual capital; Demands on strategic resources; Redundancy of hardware and staff during period of downsizing; Capacity of the recovery facility to take the full operational load in a major disaster and the capability to scale up after such an event; Infrastructure cost to maintain which include all hidden costs; Maintenance and change control; Measurement, quality and testing.
In conclusion, says Olivier, business continuity is a complex and ongoing process, not a single event. For that reason alone, it makes sense to partner with a specialist. Doing so also has cost benefits because it effectively allows the company to share costs, while moving expenses from its capital to its operational budget.