Hurricane Harvey took a physical and emotional toll on the city of Houston. Area businesses and families were faced with the overwhelming task of reconstructing their lives, homes and companies. The region has recovered strongly since then. Yet there is always the temptation to relax into complacency and believe that a disaster of this magnitude will never reoccur.
Focusing on short-term vs. long-term objectives is a common trap for many recovering businesses after a disaster. Unfortunately, some organizations don't learn much from their experiences and sit idle until the next event occurs. The key to avoiding this scenario is to have a tested disaster recovery plan already in place.
The first step in creating a disaster recovery plan is to conduct an internal risk assessment to determine the potential impact of a pending disaster on the day-to-day and long-term operations. This will enable you to account for different scenarios that may arise and test the disaster preparedness plan you've selected.
Next, identify the impact that each scenario would have on your business and outline the cost to mitigate the potential risk or the recovery interval after the disaster. Several factors such as flooding, lack of power, and the inability to get staffed were all present during Harvey. How companies responded to those challenges correlated with how quickly and strongly they recovered.
Prioritize the steps within your plan. Look at your organization and understand what components of a disaster would debilitate you, what your internal risks are, and prioritize based on that. For example, the first 24 hours after an event is reserved for making sure lives are in order. To do that, you must have systems in place to keep track of and get in touch with your team. The next 24 hours and thereafter should focus on recovery of data, technology systems and physical assets and transportation network. After you have secured your team, they can get to work on restoring vital information and documents.
While using a cloud-based provider is an effective way to do this, don't rely solely on cloud providers. There needs to be safeguards in place at your office or at remote, satellite locations to account for any anomalies that may arise such as Internet or power outages during a storm.
While it's imperative to have an established disaster preparedness plan in place, it's useless if you have not tested it. For example, if you have sent members of your team to work from higher ground in the event of flooding, have you tested to make sure that they have power where they are located? If they have power, do they have internet? If they have connectivity, do they have access to your network?
For those managing large-scale logistics operations, there should be a plan in place to consider the use and integration of third-party logistics (3PL) providers to fill in gaps created by the disaster. The contracts should include more than the physical aspects such as warehouses, transportation hubs and personnel. It should also encompass a tested and proven data integration model that allows you to electronically route and manage the logistics associated with your business. Make sure to test and validate the service level agreements with your backup 3PLs at least twice a year. All these things must be tested ahead of time for your plan to be effective.
The key metric in your testing process is the interval between the time a disaster occurs and when you can resume normal operations. In other words, if you have backed up your files in the cloud or rerouted operations through 3PLs, how long will it take to fully integrate and assume the operational responsibilities? These processes must be airtight before something happens.
In a crunch, many organizations discover that they don't have the resources they need to get ahead of the chaos. The ongoing trickle of obstacles hits harder and things begin to snowball before management can get a handle on what's happening. Factors such as lost customers, chargebacks and environmental problems take their toll. Many organizations don't survive. Although it will cost more up front, diligent management will prioritize the investment to put safeguards in place, develop a plan for disaster preparedness, and routinely test it.
Organizations cannot afford to function without guidelines on how to operate during and after a disaster. It's an emotional and trying time. Everyone can't help but be distracted. Having a plan in place instills a much-needed sense of control and survivability during a crisis. By consistently testing your plan, your team will also have the trust and confidence that will help them through tough times.
(Peter Edlund is a founding member and executive at DiCentral, a global B2B supply chain integration company based in Houston. He is the host of DiCentral's Connected, a video podcast that discusses current EDI trends with leading supply chain experts. He resides in the Houston area.)