White Paper - e-Continuity: The New Imperative

I. Trends and drivers that impact continuity
Powerful forces have transformed the business
landscape during the last five years.These include
globalization of the economy, deregulation of key
industries, wide adoption of Internet technology,
and the accelerating pace of change. Taken
together, these developments have profound
implications for business continuity.
EExxppeeccttaattiioonnss aarree hhiigghheerr tthhaann eevveerr bbeeffoorree
At a time of fierce competition and lowered
barriers to brand switching, customer loyalty
is a critical success factor for every industry
and organization. Yet customers are more
demanding than ever. Many technology users
now expect 24 x 365 access to all IT-driven
business processes, transactions, and inter-
actions — whether that expectation is reasonable
or not. Soon, they will expect access by any
device, including wireless phones, PDAs, and
Internet TVs.
Access isn’t enough, however. Speed is important
too. GartnerGroup reports that when response
times for a Web site rise above six to ten seconds,
many users will consider a site unavailable and
will leave. Gartner advises that “poor performance
over a tolerance threshold should be considered
downtime.”
2
In this demanding environment,
concepts of availability and continuity are being
expanded to encompass the quality of the user
or customer experience as well as the availability
of the application.
In response to these increased expectations,
enterprises have raised the bar for internal IT
organizations and third-party communications
service providers.They are now requesting (and
in some cases, demanding) service-level agree-
ments (SLAs) that guarantee a specified level
of performance and availability for IT infrastruc-
ture, including systems, networks, and — most
recently — enterprise applications such as ERP
and CRM
3
.
TThhee iimmppaacctt ooff ddoowwnnttiimmee iiss mmaaggnniiffiieedd
As a growing percentage of applications come
to be viewed as business-critical, manual
workarounds cease to be a viable option.When
infrastructure or applications fail, a company can
be instantly paralyzed. For example, in March 2000,
a backhoe cut through a fiber optic cable operated
by a major U.S. telecommunications carrier.
When the carrier’s backup systems failed, regional
operations for an international airline came to a
standstill for three hours, affecting 17,000 passen-
gers and resulting in 130 cancelled flights.
Depending on the type of application and scope
of an outage, the cost of an interruption can run
anywhere from tens of thousands of dollars to
several million dollars an hour. Immediate and
measurable costs typically include:
> Lost revenue; for example, from an e-commerce
site or a flight reservation system
> Lost profit opportunities, as in a commodities
trading environment
> Reduced productivity for skilled employees (legal
staff, design engineers, researchers) and costly
capital equipment (for example, semiconductor
or pharmaceuticals manufacturing equipment)
2
2
GartnerGroup, Business to Consumer — Cost of Downtime Considerations, March 2000.
3
ERP = Enterprise Resource Planning; CRM = Customer Relationship Management.
Customer
Customer
CompanyCompany
Customer
Customer
SSP
ASP
ISP
SC
Today
Yesterday
FFiigguurree 11.. TThhee ddeecceennttrraalliizzaattiioonn ooff IITT
As enterprises grow more reliant on supply chain (SC) partners and service
providers — such as ISPs, ASPs, (Internet and application service providers) and
SSPs (storage service providers) — they become vulnerable to IT interruptions
that may strike those entities.