half prepared?: business survey on disaster recovery

Half prepared?

A global study into corporate preparedness for disaster recovery and business continuity

November 2011

Half prepared? | 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

• Naturaldisasters,therisingcostsofdowntimeandtheincreasinglymission 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.

• Athirdofrespondents(33%)reportthattheperceivedcostsofdisasterrecovery 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.

• Itmaybethecasethateconomicpressuresareencouragingmanagementto 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 today’s marketplace, this may be an area which shareholders and insurers are encouraged to investigate in the light of this survey’s findings.

• Companiesthatdohavedisasterrecoveryaremorelikelytohavecomputing systems up and running within 24 hours (55%), than provide an alternative workspace for staff within the same time frame (45%).

• Someinterestingnationaldifferencesemerge.Inparticular,inJapanonly37%of firms have a disaster recovery facility for their IT systems and just under a third (32%)haveaworkspacedisasterrecovery.

• MorecompaniesinAustralia(70%)andGermany(69%)andtheUK(67%)are prepared for an IT outage than the global average (55%).

• Lessthanhalfofconsultingcompanies(46%)haveworkspacedisasterrecovery, comparedwith57%offinancialservicescompanies.


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 andmeetingroomsforexample.Largercompaniesmayalsobeabletorelyontheir 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.

ThetragictsunamithathitJapaninMarch2011,majorfloodinginAustraliainJanuary2011,earthquakesinChileandNewZealandanddamagecausedbyHurricane 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.

1ContinuityCentral,ABIResearchestimatesbusinesscontinuityanddatadisasterrecoverymarketgrowth,10thMarch20102 Symantec,DisasterRecoveryResearchReport,20093 Symantec,DisasterRecoveryResearchReport,2009


Introduction

The cost to businesses, but also insurers can be devastating and a joint report by theBusinessContinuityInstituteandtheCharteredInsuranceInstitute’sGeneralInsurance 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.4LloydsofLondonhasalsowarnedthatthe insurance industry faces significant difficulties after record claims following the Australia,NewZealand,JapanandtheUScatastrophesin2011.Thefirsthalf of 2011 is in fact reported to have been the costliest six-month period in the insurance market’s history.5

ThelatestAcronisreport,forexample,revealsthatGermanyisthecountrywherefirms are most confident of their back up and business continuity processes, closely followedbytheNetherlands.TherestofEurope,however,faredbadlywiththeUKand France scoring below average.6IntheUSA,wherejustoverhalfofcompaniestesttheirbackupfacilitiesannually(54%),lessthanathird(29%)had‘workathomedays’ 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

Inadditiontothis,areportidentifyingtheUSandJapanasthecountriesmostlikelyto incur huge expenses due to natural disasters, reports that it’s emerging economies suchasChinaandIndiathatposeahigherrisktoinvestorsastheyarelackingthecapacitytodealwithnaturalcatastrophe.Gartner,fortunately,highlightsthatIndiancompanies in particular see improving business continuity in the year ahead as an objective second only to achieving business growth.8MexicoandCanadawerealsorated as at high risk by the report.9

4 TheBusinessContinuityInstituteandtheCharteredInsuranceInstitute’sGeneralInsuranceFaculties,Insurancesectorviewsonbusinesscontinuity,20105 TheGuardian,Lloyd’sofLondonhitbyrecordclaimsfornaturaldisasters,21stSeptember20116 Acronis,TheAcronisGlobalDisasterRecoveryIndex:2011,20117 TheConferenceBoard,PreparednessinthePrivateSector-2011,20118 ContinuityCentral,GartnersurveyidentifiesbusinesscontinuityasoneofthetoptwoprioritiesforIndianorganizations,8thMarch20119 Maplecroft,NaturalHazardsRiskAtlas2011(NRHA),2011


In order to shed some light on to the level of preparedness of global businesses and their take up of disaster recovery Regus commissioned research canvassing the opinions of over 12,000 senior managers and owners of businesses from 85 countries and found that there is a close to 50-50 divide between businesses that have a plan allowing their IT systems to return to normal operation within 24 hours and those that do not.

The same almost even split is also revealed when respondents were asked whether their business had workspace disaster recovery ensuring that staff could effectively return to work within 24 hours.

The Regus Study

0% 10% 20% 30% 40% 50% 60% 70% 80%

Japan

No Yes

France

China

Brazil

Mexico

Canada

India

USA

Global Average

South Africa

Belgium

Netherlands

UK

Germany

Australia

We have a disaster recovery facility which ensures our computing systems are up and running within 24 hours


Although it is an old adage the most important asset to a business are its people, it would seem that little attention is devoted by businesses to ensuring that staff are provided with a suitable work location in case of emergency. In fact, 45% of businesses globally do not have vital IT back up and even more, 55% are not prepared to relocate their staff within 24 hours of a disaster taking place.

In particular the IT systems of more than half of companies in France (54%), China(52%),Brazil(51%),Japan(63%)andMexico(51%)arenotreadytoreturnoperationalwithin24hours.Countriesthatareparticularlyunpreparedtofindalternativeworkspacefortheirstaffincaseofemergencyare:Japan(68%),Canada(65%),India(60%)andtheUSA(59%).Whileitmaywellbethathighlevelsofinternet penetration in some countries has led business owners to believe that home access is a suitable substitute to the office in case of an emergency, connection speeds may vary, access to office supplies and technology and the reduction of collaborative working could become critical.

Globally33%ofrespondentsbelievethatthecostofdisasterrecoveryisprohibitiveand 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.

The Regus Study

0% 10% 20% 30% 40% 50% 60% 70% 80%

Japan

No Yes

Canada

India

USA

South Africa

Brazil

Mexico

France

Global Average

UK

China

Australia

Belgium

Germany

Netherlands

We have a disaster recovery facility which ensures an alternative workspace will be up and running within 24 hours


While a third of companies believe that the cost of disaster recovery is prohibitive, the research suggests that there are strong divergences in pricing or perceptions of cost acrosstheglobe.LessthanaquarterofcompaniesbelievethattheseareprohibitiveinAustralia(23%),Belgium(16%),Germany(22%)andtheUK(23%).

Attheotherendofthespectrum,fully50%ofChinesecompaniesbelievethatbusinesscontinuityistooexpensive,followedby47%offirmsinJapan,wheretakeup was the lowest, Mexico (45%) and India (44%).

The Regus Study

0% 10% 20% 30% 40% 50% 60%

Belgium

Germany

Australia

UK

Netherlands

USA

Brazil

France

Global Average

South Africa

Canada

India

Mexico

Japan

China

I believe that the cost of formal disaster recovery facilities is prohibitive


A number of workspace disaster recovery solutions are available on the market giving organisations immediate access to a network of temporary premises, fully functional in terms of IT, internet and office services. These are often structured on the basis of a small monthly fee that buys the option to access such workspace and facilities the moment a disaster strikes. In other words, the monthly charge contributes to the cost of providing Workplace Recovery space. In other instances, a larger monthly feeincorporatestenureforagivennumberofdaysfollowingthedisaster.InChina(70%),Brazil(66%),India(66%),Mexico(67%)andSouthAfrica(61%)amajorityofrespondents believe other firms like would buy the option to access a workspace disaster recovery facility if that option were priced at around $100/month. In other geographies, demand for this kind of facility is expressed by a significant proportion of respondents.

The Regus Study

0% 10% 20% 30% 40% 50% 60% 70% 80%

UK

Germany

France

Belgium

USA

Australia

Netherlands

Global Average

Japan

Canada

South Africa

Brazil

India

Mexico

China

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


0% 10% 20% 30% 40% 50% 60% 70% 80%

Small

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

Medium

Large

Disasterrecoverybysizeofcompany

The survey also analysed the impact of company size on the existence of a 24 hour disaster recovery function and found that as companies become larger they are more likely to have a solution in place both for their IT and for their staff.

Company size variations

Only 51% of small businesses have an IT business continuity plan in place compared tofully74%oflargebusinessesand,inspiteofrelianceonalternativeofficesandbuildings, larger companies (60%) are also far more likely to have a workspace businesscontinuityplaninplacethansmallcompanies(43%).

The perceived cost of disaster recovery is a deterrent to over a third of small firms (36%)andlesssotolargerfirms(20%)thathavemoreinfrastructuretoprotectandstaff 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 likelytodosothansmallercompanies(53%).


Understandably, the sector most likely to have an IT disaster recovery plan in place is the financial services sector.

Inmanycountries,havingacontinuityplanorsysteminplaceisaformalrequirementfor financial organisations, but the results suggest that the speed at which businessescanrecoveroperationsvariesasonly71%offinancialservicesfirmsdeclared that they have an IT disaster recovery plan that ensures they are up and runningwithin24hours.Anothersurprisingfindingisthatstrikingly,only66%ofICTbusinesses actually have an IT disaster recovery function in place.

Consultancy(51%)andmedia(49%)firmsrevealanalmost50/50splitamongcompanies that have an IT continuity plan and those that do not. Media firms are also the least likely to have a workspace disaster recovery alternatives in place (40%), followed by consulting firms (46%). Highlighting their greater awareness of the businesscontinuityissuefinancialservices(57%)andICTbusinesses(55%)aremorelikely to have a workspace recovery system in place ensuring staff can return to their normal operations within 24 hours.

Company sector variations

0%

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

10% 20% 30% 40% 50% 60% 70% 80%

Finance

Consulting

ICT

Media

Disaster recovery solutions by sector


Media companies, are the most likely to be put off by the perceived cost of disaster recoverywith43%declaringthattheybelievethecostisprohibitive.Thiscontrastsstronglywithonlyaroundaquarterofrespondentsinthefinancialservices(24%)andICT(25%)sectorswherecompaniesaremorelikelytohavepurchasedoratleastinvestigated the option of purchasing a solution.

Company sector variations


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 allowtheirsystemsandtheirstafftocontinueworkingseamlesslyfromfullyequippedlocations.

Conclusion


Regus is the world’s largest provider of flexible workplaces, with products and services ranging from fully equipped offices to professional meeting rooms, business lounges and the world’s largest network of video communication studios. Regus enables people to work their way, whether it’s from home, on the road or from an office.

CustomerssuchasGoogle,GlaxoSmithKline,andNokiajoinhundredsofthousandsof growing small and medium businesses that benefit from outsourcing their office and workplace needs to Regus, allowing them to focus on their core activities.

Over900,000customersadaybenefitfromRegusfacilitiesspreadacrossaglobalfootprintof1,200locationsin550citiesand92countries,whichallowindividualsand companies to work wherever, however and whenever they want to. Regus was foundedinBrussels,Belgiumin1989,isheadquarteredinLuxembourgandlistedontheLondonStockExchange.Formoreinformationpleasevisit: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. Respondentswereaskedawidevarietyofquestionsincludingonesabouttheireconomic 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.

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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.