By Al Cooper
Disaster Contingency Planning is a term that is popular in today's world, both from the aspect of natural disasters (fires, floods, earthquakes, etc.) and terrorist acts.
Disaster Contingency Plans, a.k.a. Disaster Recovery Plans or D/R, are almost always highly visible in computer operations environments, while Output Factories often take them for granted. Why is this? Most companies believe (rightly so) that their customer and product data is their most valuable asset. As such, they go to extensive, and often very expensive, measures to protect and back up that data in their computer environment. Quite often this involves total redundancy and the ability to switch over processing in a short period of time in the event of a disaster in a data center.
However, what about an Output Factory?
Some print facility management continue to ignore the possibility that their facility is at risk, or are afraid to ask their corporate management for funding to back up their facility due to the expected increase in costs.
Some people ask ?Why should we pay for backing up our print facility, when our printer vendor can have new printers here in a week or so?? The answer to this question will vary depending on the type of business involved and the nature of the materials being printed.
Let's look at two diametrically opposite examples of high volume computer printing. The first is that of a bank statement application.
Let's hypothesize a fire that destroys a bank's statement production facility. We will assume that the bank's computer center is not impacted by this event, so that normal online processing may continue.
What is the impact of delaying the production and delivery of a customer's statement? Typically, this would result in a lot of customer complaints ? phone, face to face, e-mail, etc. Will this result in an immediate financial loss to the company? It is unlikely that this will do more than aggravate the irritation felt by some customers, and the company may loose a customer or two that were probably looking for an excuse to change banks.
Will this cause regulatory issues? A much more likely problem with the interruption (even temporary) in production of bank statements would be the likelihood of intervention by a banking regulatory body, e.g. FDIC, on behalf of the customer base. This pressure should be alleviated by the ability of the banking institution to convince the regulatory body of their ability to recover production in a reasonable time frame.
In a banking environment, production of bank statements is not critical to the ongoing operation of the customer's bank accounts, nor will it normally cause a direct loss of corporate income.
The second example is more likely to be impacted financially be an impact in the production of customer output. This example involves the production of phone bills.
Why is the production of invoices more critical to a phone company than bank statements to a bank? A bank statement represents transactions that have already been completed and is a historical document. An invoice is a notification of a debt incurred, and requests the payment of that debt. As such, the invoice represents a service provided while attempting to trigger payment of the debt.
Delays in producing and delivering invoices will directly impact the cash flow for a phone company. A study of one company indicated that a delay of a half business day in producing corporate account bills for one type of service would result in a loss of $30,000 in bank interest. When dealing with large numbers of customers or smaller numbers of larger valued customers, the losses caused by invoice production delays can be staggering.
As such, the importance of an effective D/R Plan may be interpreted as being higher for an invoicing environment than for a statement environment. However, both environments must be closely evaluated to ensure mission critical corporate business continues in the event of a disaster.
The next column will touch on some of the things to include in a D/R Plan. Contact Al Cooper at ac@888999copi.com.