Business Continuity Archives - Kaseya https://www.kaseya.com/blog/category/backup-recovery/business-continuity/ IT & Security Management for IT Professionals Wed, 04 Sep 2024 12:55:54 +0000 en-US hourly 1 https://wordpress.org/?v=6.7.1 High Availability: What It Is and How You Can Achieve It https://www.kaseya.com/blog/high-availability/ Tue, 10 Aug 2021 19:27:35 +0000 https://www.kaseya.com/?p=13660 While it is impossible to completely rule out the possibility of downtime, IT teams can implement strategies to minimize theRead More

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While it is impossible to completely rule out the possibility of downtime, IT teams can implement strategies to minimize the risk of business interruptions due to system unavailability. One of the most efficient ways to manage the risk of downtime is high availability (HA), which facilitates maximum potential uptime. 

What Is High Availability?

It is a concept that involves the elimination of single points of failure to make sure that if one of the elements, such as a server, fails, the service is still available. High availability is often synonymous with high-availability systems, high-availability environments or high-availability servers. High availability enables your IT infrastructure to continue functioning even when some of its components fail.  

High availability is of great significance for mission-critical systems, where a service disruption may lead to adverse business impact, resulting in additional expenses or financial losses. Although high availability does not eliminate the threat of service disruption, it ensures that the IT team has taken all the necessary steps to ensure business continuity. 

In a nutshell, high availability implies there is no single point of failure. Everything from load balancer, firewall and router, to reverse proxy and monitory systems, is completely redundant at both network as well as application level, guaranteeing the highest level of service availability. 

Why Is High Availability Important? 

Regardless of what caused it, downtime can have majorly adverse effects on your business health. As such, IT teams constantly strive to take suitable measures to minimize downtime and ensure system availability at all times. The impact of downtime can manifest in multiple different ways including lost productivity, lost business opportunities, lost data and damaged brand image.

As such, the costs associated with downtime can range from a slight budget imbalance to a major dent in your pocket. However, avoiding downtime is just of several reasons why you need high availability. Some of the other reasons are: 

Keeping up with your SLAs  Maintaining uptime is a primary requisite for MSPs to ensure high-quality service delivery to their clients. High-availability systems help MSPs adhere to their SLAs 100% of the time and ensure that their client’s network does not go down.

Fostering customer relationships Frequent business disruptions due to downtime can lead to unsatisfied customers. High-availability environments reduce the chances of potential downtime to a minimum and can help MSPs build lasting relationships with clients by keeping them happy. 

Maintaining brand reputation System availability is an important indicator of the quality of your service delivery. As such, MSPs can leverage high-availability environments to maintain system uptime and build a strong brand reputation in the market. 

Keeping data secure By minimizing the occurrence of system downtime through high availability, you can significantly reduce the chances of your critical business data being unlawfully accessed or stolen. 

How Is High Availability Measured?

High availability is typically measured as a percentage of uptime in any given year. Here, 100% is used to indicate a service environment that experiences zero downtime or no outages. The percentages of the order of magnitude are often denoted by the number of nines or “class of nines” in digits. 

What Is the Industry Standard for High Availability? 

According to the industry standard, most services with complex systems offer somewhere between 99% and 100% uptime. The majority of cloud providers offer some type of SLA around availability. For instance, cloud computing leaders, such as Microsoft, Google and Amazon, have their cloud SLAs set at 99.9% or “three nines.” This is usually considered to be a fairly reliable system uptime.  

However, the typical industry standard for high availability is generally considered to be “four nines”, which is 99.99% or higher. Typically, four nines availability equates to 52 minutes of downtime in a year. 

Availability Measures and Corresponding Downtime 

While three nines or 99.9% is usually considered decent uptime, it still translates to 8 hours and 45 minutes of downtime per year. Let’s take a look at the tabular representation of how the various levels of availability equate to hours of downtime. 

Availability %Class of NinesDowntime Per Year
99% Two Nines3.65 days
99.9% Three Nines8.77 hours 
99.99% Four Nines52.60 minutes
99.999%  Five Nines5.26 minutes 

Although four nines is considered high service availability, it still means you will encounter 52 minutes of downtime in a year. The cost of IT downtime is $5,600 per minute. Considering this, with the three nines uptime offered by most leading cloud vendors, you will still lose a great deal of money through roughly 8.77 hours of service outage every year. 

How Is High Availability Generally Achieved?

Let’s find out what you need to do to achieve high availability. 

Deploy multiple application servers 

Overburdened servers have a tendency to slow down or eventually crash. You must implement applications over multiple different servers to ensure your applications keep running efficiently and downtime is reduced. 

Scale up and down 

Another way to achieve high availability is by scaling your servers up or down depending on the load and availability of the application. You can achieve vertical and horizontal scaling outside the application at the server level. 

Maintain an automated recurring online backup system 

Automating backup ensures the safety of your critical business data in the event you forget to manually save multiple versions of your files. It is a good practice that pays dividends under multiple different circumstances, including internal sabotage, natural disasters and file corruption. 

5 Best Practices for Maintaining High Availability

Here is a list of some best practices for maintaining high availability across your IT environment:

1. Achieve geographic redundancy 

Your only line of defense against service failure, when encountering catastrophic events such as natural disasters, is geographic redundancy. Similar to geo-replication, geo-redundancy is carried out by deploying multiple servers at geographic distinct sites. The idea is to choose locations that are globally distributed and not very localized in a particular region. You must execute independent application stacks across each of these far-flung locations to ensure that even if one fails, the other continues running smoothly. 

2. Implement strategic redundancy 

Mission-critical IT workloads require redundancy more than regular operational IT workloads that are not as frequently accessed. As such, instead of executing redundancy for every workload, you must focus on introducing redundancy strategically for the more critical workflows to achieve target ROI. 

3. Leverage failover solutions 

A high-availability architecture typically comprises of multiple loosely coupled servers that feature failover capabilities. Failover is described as a backup operational mode wherein the functions of a primary system component are automatically taken over by a secondary system when the former goes offline due to an unforeseen failure or planned downtime. You can manage your failover solutions with the help of DNS in a well-controlled environment. 

4. Implement network load balancing 

Increase the availability of your critical web-based application by implementing load balancing. If a server failure is detected, the instances are seamlessly replaced and the traffic is then automatically redirected to functional servers. Load balancing facilitates both high availability and incremental scalability. Accomplished with either a “push” or “pull” model, network load balancing introduces high fault tolerance levels within service applications. 

5. Set data synchronization to meet your RPO 

RPO is the amount of data that can be lost within a period most relevant to a business, before significant harm occurs. If you aim to hit a target of maximum availability, Be sure to set your RPO to less than or equal to 60 seconds. You must set up source and target solutions in a way that your data is never more than 60 seconds out of sync. This way, you will not lose more than 60 seconds worth of data should your primary source fail. 

Comparing High Availability to Similar Systems

Often, high availability is confused with a number of other concepts, and the differences are not well understood. To help you get a better understanding of these differences, here is a comparison of high availability vs. concepts it is often confused with.

High Availability vs. Fault Tolerance 

While both high availability and fault tolerance have the same objective, which is ensuring the continuity of your application service without any system degradation, both have certain unique attributes that distinguish them from one another.

While high-availability environments aim for 99.99% or above of system uptime, fault tolerance is focused on achieving absolute zero downtime. With a more complex design and higher redundancy, fault tolerance may be described as an upgraded version of high availability. However, fault tolerance involves higher costs as compared to high availability. 

High Availability vs. Redundancy 

As mentioned earlier high availability is a level of service availability that comes with minimal probability of downtime. The primary goal of high availability is to ensure system uptime even in the event of a failure. 

Redundancy, on the other hand, is the use of additional software or hardware to be used as backup in the event that the main software or hardware fails. It can be achieved via high availability, load balancing, failover or load clustering in an automated fashion. 

High Availability vs. Disaster Recovery

High availability is a concept wherein we eliminate single points of failure to ensure minimal service interruption. On the other hand, disaster recovery is the process of getting a disrupted system back to an operational state after a service outage. As such, we can say that when high availability fails, disaster recovery kicks in.

High Availability of IT Systems Requires Monitoring and Management 

One of the key strategies to maintain high availability is constant monitoring and management of critical business servers. You must deploy an efficient unified endpoint management solution, like Kaseya VSA, with powerful capabilities such as: 

  • Monitoring and alerting — to quickly remediate problems 
  • Automated remediation via agent procedures (scripts) 
  • Automation of routine server maintenance and patching to keep systems up and running
  • Remote control/remote endpoint management to troubleshoot issues 

Find out more about how Kaseya VSA can help you achieve high availability. Request a demo now!

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Colocation: The Benefits of Cost-Effective Data Centers https://www.kaseya.com/blog/colocation-the-benefits-of-cost-effective-data-centers/ Wed, 09 Dec 2020 16:28:19 +0000 https://www.kaseya.com/?p=12074 With businesses planning and budgeting for their Information Technology (IT) needs for 2021, deciding on whether to build or expandRead More

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With businesses planning and budgeting for their Information Technology (IT) needs for 2021, deciding on whether to build or expand their own data centers may come into play. One alternative to consider is colocation, which is a way to reduce the capital expense (CapEx)of owning your own data center by renting space at a third-party facility. There are significant expenses associated with a data center facility, which we’ll discuss below.

What Does Colocation Mean?

With colocation (also known as “colo”), you deploy your own servers, storage systems and networking equipment at a third-party data center. Simply put, you are basically renting space for your equipment at the colocation facility. That space can be leased by the room, cage, rack or cabinet. However, you get much more than just space. You also get power, backup power, cooling, cabling and more, just as you would at your own data center.

The concept of colocation first emerged in 1998 when businesses moved their racks and servers out of their office locations to colocation centers and were charged on a per-rack basis. Some colocation centers now function at a hyperscale level, catering to the data center facility needs of many large and small businesses alike.

What Is a Colocation Data Center?

A colocation data center is a physical facility that offers rental space to companies to host their servers, storage devices and networking equipment. In addition to the space that is either leased by rack, room, cage or cabinet, it provides facilities such as:

  • Power: Colocation centers typically provide backup power with backup generators and/or uninterruptible power supply to keep your systems up and running 24/7.
  • Cooling: Cooling systems such as redundant HVAC systems, liquid cooling and other technologies are generally provided.
  • Bandwidth: High-speed internet access is provided by all colocation centers so that you have the necessary access to your server processing power.
  • Physical security: Colocation centers typically take stringent measures to protect the IT infrastructure in the building. This could include CCTV monitoring, fire alert, on-site guards and identity authentication.

What Are the Different Types Colocation Centers?

There are a few different types of colo data centers. Let’s take a look at them.

  • Retail colocation center: A customer leases space within a data center, usually a rack, space within a rack, or a caged-off area.
  • Wholesale colocation center: These cater to large organizations and government agencies. A wholesale colocation center client typically requires more space and may prefer that their infrastructure be kept separate from other clients. Due to these reasons, wholesale colocation centers tend to house IT equipment for fewer clients, usually less than 100.
  • Hybrid colocation center: Hybrid, cloud-based colocation is a mix of in-house and outsourced data center services.

Benefits of Using Colocation

Colocation centers offer a number of benefits including the following:

24x7x365 Support and Maintenance

Many colocation centers provide maintenance, monitoring, reporting and troubleshooting to help prevent potential disasters like system failures, security breaches and outages.

Uptime SLAs

Colocation centers provide multiple backup and disaster recovery options to keep services running during power outages and other unexpected events. They also guarantee uptime via service level agreements (SLAs) that can provide a high level of confidence to client companies. In general, colocation centers and data centers are graded on a tier system from Tier 1 to Tier 4, based on uptime.

  • Tier 1 colocation centers provide 99.67 percent uptime, have the lowest amount of redundancy and are expected to have planned downtime.
  • Tier 2 colocation centers provide 99.74 percent uptime with a scheduled yearly downtime required for maintenance.
  • Tier 3 colocation centers provide 99.982 percent uptime. All servers in Tier 3 colocation centers are redundantly powered with two distribution paths. In case of power failure of one path, the servers can still remain online.
  • Tier 4 colocation centers offer 99.995 percent uptime and typically serve large enterprises.

Greater Bandwidth and Connectivity

A colocation center typically offers a broad range of connectivity options to its clients. With multiple internet service providers, cloud environments and other cross connections available, companies can fully optimize their workloads and improve IT operational flexibility.

Lower Costs and Better Ccalability

The cost of managing an in-house data center and IT infrastructure can be higher than the cost of renting space at a colocation center. With colocation, companies can also have a very predictable operational expense model that replaces CapEx with operating expenditure (OpEx). They can also scale quickly and easily, something that cannot be easily achieved with on-premises options since expanding private server rooms and data centers takes months of planning.

Superior Physical Security

As mentioned earlier, many colocation facilities offer multiple layers of security, including authorized access, video surveillance, on-site personnel and mantraps.

Comparing Colocation to On-Premises and Cloud Options

Colocation centers, on-premises solutions and cloud infrastructure all have their own pros and cons. Organizations must evaluate extensively to determine which type of solution best suits their business needs and helps them operate most efficiently.

Colocation vs. On-Premises Solution

Colocation is unarguably cheaper than building and maintaining your own data center. However, in cases where a company has a large amount of legacy infrastructure and/or has complex hardware and network requirements, the on-premises option may be a necessity.

Colocation vs. Cloud

The main difference between colocation and public cloud services (Infrastructure-as-a-Service or IaaS) is that with colocation you own and maintain the hardware (servers, storage, etc.) whereas with IaaS, the service provider owns and maintains all of that equipment. Cloud services provide even greater flexibility to scale up or down as your computing demands change, but could also be more costly. On the other hand, colocation brings with it the risk of vendor lock-in challenges, which can be a drawback for some companies.

Considerations When Choosing A Colocation Provider

With the performance of your business riding on your colocation centers, selecting a provider is an important decision to make. While power redundancy, higher availability, scalability and costs are the obvious factors that influence the selection of a colocation provider, a few additional criteria that can ensure you derive the maximum benefit from your colocation centers are:

Location

The physical location of the colocation center plays a huge role with regards to ease of access and reduction of network latency. Minimizing latency delay is important for application performance. Ask questions like: “Where is your colocation center located?” and “How quickly can you get to it?”

Scalability and Flexibility

What kind of services does your colocation provider offer? Can it address your scaling requirements as your company grows? Can it accommodate any migration demands if required? As your company grows, so does your data. Your colocation facility should be able to cater to any additional capacity needs.

Security Services

What kind of security procedures and protocols are carried out by the colocation provider to protect your company data? For example, some colo centers offer 24×7 network monitoring and provide proactive security alerts and DDoS mitigation services. While all colocation centers provide physical security, you may want to use one that offers more.

Disaster Recovery Preparedness

Companies should align their disaster recovery plans with the colocation facilities they are leasing. Make sure your valuable IT assets are safeguarded against all kinds of disasters and incidents.

Every business strives to reduce its operating expenses and optimize its IT operations to support business growth. With 2021 around the corner, we’re pretty sure your IT budget planning is well underway. Download our 2021 Budgeting Checklist to help you with the planning process so you get a leg up for the new year.

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Business Continuity Basics: Management, Planning and Testing https://www.kaseya.com/blog/business-continuity-basics-management-planning-and-testing/ Fri, 28 Aug 2020 16:32:34 +0000 https://www.kaseya.com/?p=11339 In our previous blogs, we discussed at length about business impact analysis and business continuity and disaster recovery, and howRead More

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In our previous blogs, we discussed at length about business impact analysis and business continuity and disaster recovery, and how these concepts are a part of business continuity in general. Today, let’s take a deeper dive into business continuity and why every organization must have a business continuity plan to survive.

What Is Business Continuity?

Business continuity is the capability of an organization to overcome a disaster, whether natural or man-made, through the implementation of a business continuity plan.

Businesses today are susceptible to all kinds of incidents – breaches, cyberattacks, natural disasters, power outages and more. For a business to maintain its operations in the wake of such incidents, business continuity planning is critical.

Check out this short video on business continuity from BCI:

Business Continuity Management (BCM)

TechTarget defines BCM as a framework for identifying an organization’s risk of exposure to internal and external threats.

BCM provides a framework for building resilience and the capability for an effective response that safeguards the interests of the organization and its stakeholders, which includes employees, customers, suppliers, investors and the communities in which the organization operates.

Why Is Business Continuity Management Important?

BCM is a subset of a larger organizational risk strategy. Its strategies focus on the processes that need to take place after an event or disaster occurs. The aim of BCM is to restore the business to normal operations as efficiently and effectively as possible.

There are a growing number of industry guidelines and standards that businesses can leverage to start the process. Adopting and complying with BCM standards is a good way for companies to put a plan in place that will protect the business and ensure that it can continue in the aftermath of an incident.

Continuity of business operations following a disaster helps retain customers and reduces financial risk.

Who Is Responsible for Business Continuity Management?

A sound BCM strategy requires defining roles and responsibilities and resource planning for specific actions that need to be taken in the event of an incident.

Typically, organizational leaders should create, analyze and approve the BCM strategy and actively communicate the value of BCM and the risks of insufficient BCM capabilities.

All corporate functions and business units, including executive teams, IT teams, finance/accounting and more, must act within their areas of responsibility and help establish continuity response strategies.

Business Continuity Planning (BCP)

A business continuity plan is an integral part of BCM and outlines the risks to an organization due to an unplanned outage and the steps that must be taken to alleviate the risks.

It details the processes and the systems that must be sustained and maintained to allow business continuity in the event of a disruption.

What Are the Key Components of a Business Continuity Plan?

  • Recovery strategies and procedures: The procedures and actions to be taken to maintain system uptime are documented in the business continuity plan. This includes strategies you have in place to keep your business functional and prioritization of assets important to your business. Be sure to also identify potential threats to these assets.
  • Create a response team: This section of the plan deals with the team that will participate in the recovery process and the specific tasks to be assigned to them to get systems back up quickly.
  • Backing up data for recovery: Organizations must strategize how to back up their data – the mediums and locations to be used for backup and recovery for continuous IT operations. Backup options include on-premises appliances, virtual appliances, and direct-to-cloud backup.
  • Employee training: All employees in an organization must be trained to implement a business continuity plan whenever required. They should be aware of their individual roles and responsibilities and must be able to accomplish them in the event of a disaster.
  • Updating and maintaining the business continuity plan: Organizations are constantly evolving, and these changes, if not documented, may cause a ripple effect on outdated business continuity plans.

Business continuity plans must be continuously reviewed and updated for various scenarios. Plans should be tested regularly to ensure they work in the event of an outage.

Business Continuity Testing

BCP is not a one-time task, but rather a continuous process that an organization must undertake. For business continuity plans to be efficient, testing is absolutely essential.

Business continuity testing ensures that your BCM framework works. Regular testing reduces risk, drives improvements, enhances predictability and ensures the alignment of the plan with the ever-evolving business.

How Often Should a Business Continuity Plan Be Tested?

Testing business continuity plans annually or biannually is recommended by most experts. Here are three steps you can take to test the effectiveness of your business continuity plan.

  1. Create a BCP test plan: The first step requires the formulation of a test scenario and the generation of test scripts that should be executed by the response team.
  2. Test the plan: Business continuity plans may fail to meet expectations due to insufficient or inaccurate recovery requirements or implementation errors. That’s why these components are tested by simulating a crisis and getting the response team and the relevant resources to move into action.
  3. Retest after information update: In case of a process breakdown during testing, the test data is analyzed, the situation assessed, functions fixed and retesting is done to avoid the previous malfunction, until the test succeeds.

A well-structured business continuity plan enables organizations to mitigate the negative effects of a natural disaster or any other unexpected event and minimize downtime. Learn how Kaseya can help you keep your IT operations running with its enterprise-class backup solutions.

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What is BCDR? Business Continuity and Disaster Recovery Explained https://www.kaseya.com/blog/what-is-bcdr-business-continuity-and-disaster-recovery-explained/ Thu, 20 Aug 2020 22:19:31 +0000 https://www.kaseya.com/?p=11252 With organizations going through digital transformations and more employees working remotely, cybersecurity is a top priority for almost all ITRead More

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With organizations going through digital transformations and more employees working remotely, cybersecurity is a top priority for almost all IT teams. Businesses have to be prepared for cyberattacks and unexpected IT outages. In fact, in the 2019 State of IT Operations Survey Report, nearly 61 percent of the survey respondents who had a security breach in the past year, had two to four IT outages.

In the event of a disruption, businesses must be able to quickly recover mission-critical data, restore IT systems and smoothly resume operations. A robust business continuity and disaster recovery (BCDR) plan is the key to having confidence in your ability to recover quickly with minimal disruption to the business.

What Is Business Continuity and Disaster Recovery (BCDR) and Why Is It Important for Businesses?

BCDR represents a set of approaches or processes that helps an organization recover from a disaster and resume its routine business operations. Disasters include natural calamities, outages or disruption due to power failure, employee negligence, hardware failure, or cyberattacks.

A BCDR plan ensures that businesses operate as close to normal as possible after an unexpected interruption, with minimal loss of data.

In the past, some companies were under the impression that only large enterprise organizations needed BCDR plans. However, it is just as critical for small and midsize businesses. The 2019 Verizon Data Breach Investigations Report showed that “43 percent of [security] breaches involved small business victims.”

Having a proper BCDR plan in place enables businesses to minimize both the downtime and the cost of a disruption.

What Is the Difference Between Business Continuity and Disaster Recovery?

The business continuity component of a BCDR plan deals with the people, processes and resources that are needed before, during and after an incident to minimize interruption of business operations and cost to the business. It includes:

  • Team – The first and one of the most important components of a business continuity plan (BCP) is organizing a continuity team. Your BCP will be effective only if it is well-designed and if there is a dedicated team to execute it at a moment’s notice.
  • Business Impact Analysis (BIA) – A deep analysis of potential threats and how they could impact the business — usually described in terms of cost to the business. The BIA identifies the most critical business functions that you need to protect and restore quickly.
  • Resource Planning – Identifying resources (hardware systems, software, alternative office space and other items to be used during a crisis) as well as the key staff, and the roles they must play in the event of a disaster.

Disaster recovery is a subset of business continuity planning and involves getting IT systems up and running following a disaster.

Planning for disaster recovery includes:

  • Defining parameters for the company such as recovery time objective (RTO) — the maximum time systems can be down without causing significant damage to the business, and recovery point objective (RPO) — the amount of data that can be lost without affecting the business
  • Implementing backup and disaster recovery (BDR) solutions and creating processes for restoring applications and data on all systems

What Are the Objectives of a BCDR Plan?

A BCDR plan aims to protect a company from financial loss in case of a disruptive event. Data losses and downtime can lead to businesses being shut down. A robust BCDR plan:

  • Reduces the overall financial risk to the company
  • Enables the company to comply with industry regulations with regards to data management
  • Prepares the organization to respond adequately and resume operations as quickly as possible in the aftermath of a crisis

6 Steps to Execute a Robust BCDR Plan

  1. Identify the team: The continuity team will not only carry out the business continuity plan in the event of a crisis but will also ensure that your other employees are informed and know how to respond in a crisis. The team will also be responsible for planning and executing crisis communications strategies.
  2. Conduct a business impact analysis (BIA): A BIA identifies the impact of a sudden loss of business functions, usually in terms of cost to the business. It also identifies the most critical business functions, which allows you to create a business continuity plan that prioritizes recovery of these essential functions.
  3. Design the recovery plan: Determine acceptable downtime for critical systems and implement backup and disaster recovery (BDR) solutions for those critical systems as well as SaaS application data. BDR solutions can be appliance-based or in the cloud. Consider Disaster Recovery as a Service (DRaaS) solutions as part of your overall strategy.
  4. Test your backups: Disaster recovery testing is a vital part of a backup and recovery plan. Without proper testing, you will never know if your backup can be recovered. According to the 2019 State of IT Operations Survey Report, only 31 percent of the respondents test their disaster recovery plan regularly, which shows that businesses usually underestimate the importance of BDR testing.
  5. Execute the plan: In the event of a disruption, execute the processes that get your systems and business back to normal.
  6. Measure, review and keep the plan updated: Measure the success of your execution and update your plan based on any gaps that are uncovered. Testing the BCDR plan beforehand is recommended for better results.

Learn more about BCDR planning and its importance to successful business operations by downloading our eBook Business Continuity Planning to Combat a Crisis.

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Business Impact Analysis: An Integral Part of Business Continuity Planning https://www.kaseya.com/blog/business-impact-analysis-and-business-continuity-planning/ Mon, 06 Jul 2020 15:53:34 +0000 https://www.kaseya.com/?p=10988 IT teams in most organizations are familiar with disaster recovery and business continuity processes. However, some may not be awareRead More

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IT teams in most organizations are familiar with disaster recovery and business continuity processes. However, some may not be aware of the importance of conducting a business impact analysis (BIA). A BIA is one of the most important elements of a business continuity plan. It helps companies determine the financial impact of outages or any other disruption to their business.

What Is a Business Impact Analysis and Why Is it Important?

A BIA identifies the impact of a sudden loss of business functions, usually in terms of cost to the business. A BIA also identifies the most critical business functions, which allows you to create a business continuity plan that prioritizes recovery of these essential functions. However, the reason behind the business disruption is not important. It could be due to negligence, natural disaster, cyberattack or other causes. Instead, it looks at the business impact of the disaster, prioritizes resources and determines the best approach to recovery.

A BIA is comprised of three key components:

  • Business impact
  • Time frames
  • Dependencies

Each of these is discussed further below. As a part of the foundation of a business continuity plan, a BIA is essential to business recovery in the event of a disaster.

Business Impact

Determine the most critical business functions based on cost to the business

A BIA determines a company’s most important functions that keep it afloat — its comprehensive set of business processes, the resources needed to execute these processes and the systems required for these. The potential cost associated with a business disruption, such as loss of revenue, regulatory compliance penalties, contractual penalties due to missing service-level agreements (SLAs), increased operational costs, etc., is calculated in terms of real dollars for each business function.

To assess the financial impact, one approach is to use a questionnaire to ask questions, with answers rated on a scale from 1 to 5. For example:

  • What would the potential loss in revenue be if this business function went down?
  • What fines and penalties would the business incur?
  • What increase in operating costs would the business experience?

There could be non-dollar costs to the business as well. These include reputation damage and loss of goodwill. Your questionnaire could also include questions such as:

  • What would be the potential damage to the business’ reputation?
  • What would be the impact on customer service?

Identify potential threats to these functions

Once your BIA identifies the critical business functions, it determines the risks associated with them as well as the conditions that may trigger a business process outage and the probability of the recurrence of the risk.

Timeframes

There are three timeframes that your BIA should address:

  • Recovery Point Objective (RPO) — Typically the time between data backups that represents the maximum time during which data may be lost during a disaster.
  • Recovery Time Objective (RTO) — The time it would take you to recover from backup.
  • Maximum Allowable Downtime (MAD) — The maximum tolerable period of downtime a particular business function can afford. It should include the time it would take to restore the function to full operation after a backup has been restored.

Dependencies

A BIA should determine the dependencies between business processes and systems. This helps prioritize the systems that need recovery first. A BIA helps you discern the order in which lost functions or processes must be restored. A business function that has more business processes relying on it to be operational will have a higher priority in the recovery process than others.

There could also be dependencies regarding certain vendors that you’ll need to work with to restore various systems and functions. These could include IT vendors, and Internet service providers, and should be documented in your BIA.

Are There BIA Standards?

Several standards provide guidance on how to create a BIA. These include the International Organization for Standardization (ISO) 22301, National Fire Protection Act 1600 and the Federal Financial Institutions Examination Council’s (FFIEC) BCP standard for financial institutions.

Business Impact Analysis as Part of Business Continuity Planning

A business continuity plan (BCP) describes what steps must be taken in case of an outage or disruption, whereas a BIA identifies the risk that could prompt the outage as well as the critical business functions that could be impacted by the outage and prioritizes these for recovery. A BIA lays the foundation for a solid business continuity plan and prepares an organization for the inevitable effort required to recover from a business disruption. BCPs not only focus on technical operations (hardware/software issues) but also take into account the personnel and other resources associated with business continuity.

Once your BIA is in place, it is a good practice to periodically review and update it, as your business changes over time. This allows you to leverage the BIA effectively to handle new risks and challenges. It is recommended that you do this at least every two years. A BIA, in conjunction with business continuity planning, enables an organization to minimize downtime and ensure workforce productivity even in the event of a crisis.

Learn more about business continuity planning in our ebook Transforming a Crisis Into an Opportunity.

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