Disaster Recovery - Be prepared for disasters - they keep on happening...

In The Economist last week, Richard Koo – the Chief Economist at the Nomura Research Institute tried to estimate the likely impact of the magnitude 9.0 earthquake that hit the Japanese coast on March 11th. Based on projected damage to the country’s electricity supply from the initial quake, tsunami and subsequent nuclear power plant issues, Koo suggested that Japan’s GDP might shrink by as much as 6 percent following the disaster. That’s a major blow to any economy, and one that will require enormous effort to recover.

For the survivors in the city of Sendai and its surrounding coastal region, now dealing with the loss of loved ones, homes and livelihoods, the immediate prospect is – of course - bleak. Despite this, Western journalists have been impressed by the stoicism and determination displayed by the local population. There’s a Japanese proverb that translates as ‘fall down seven times, get up eight’, and we’re certainly seeing this resilience in how Japanese people have behaved in the face of catastrophe.

Earthquakes of this magnitude – and the tsunami that followed – are of course very rare, and it’s difficult to know just how far individuals, organisations or societies should go to protect themselves from such rare events. In 2007, the author Nassim Nicholas Taleb wrote a book called ‘The Black Swan’, urging us not to rule out the possibility of such extreme, unpredictable risks. Since its publication four years ago, ‘black swan’ events have come thick and fast – the financial crisis, the collapse of the Icelandic, Greek and Irish economies, sweeping change across North Africa, and now the earthquake, tsunami and nuclear crisis in Japan.

Clearly ‘black swan’ events do happen – just ask the people of Christchurch, Port-Au-Prince or New Orleans, many of whom are still recovering in different ways from the natural disasters that affected their cities. These disasters serve to remind us all that, while we can’t completely eliminate risk from our lives, we can work to manage that risk and reduce its inevitable impact.

At Maxima we understand the importance of having fully-tested, effective disaster recovery plans in place. When an organisation can no longer operate effectively due to a crisis event, it’s the degree to which contingency plans actually work that become critical. That’s why we work with our business continuity customers to first establish requirements, then develop and test plans against a range of scenarios. Key to this is the ability to carry out rigorous business impact analysis and site threat assessments.

The Japanese were fully aware of the risk they faced from earthquakes and tsunamis. In the last five years alone there have actually been 13 quakes each with a magnitude greater than 5.0 – so when the tsunami struck earlier this month, the Japanese were about as prepared as they could be. What they couldn’t protect against was the unusually high magnitude of the March 11 disaster, however their foresight and readiness served to reduce the impact of this major seismic event. If you compare the recent Japanese and Haiti earthquakes, for example, there was a dramatic difference between the relative preparedness of both countries. The Sendai earthquake’s 9.0 magnitude was twenty times more severe than Haiti’s 7.0-magnitude quake – yet the human cost in Haiti was more than ten times as high. This differential didn’t occur by chance. Over the last 30 years particularly, Japan has invested billions of dollars on sea defences, on buildings that sway to withstand earthquakes, on tsunami warning systems, as well as rigorously enforced building codes.

The human cost of the recent Sendai earthquake is still being assessed, but the clear evidence shows that without the huge investment in risk management processes and prevention by the Japanese, the human cost of the disaster would have been much, much worse. It’s a striking example of the requirement for essential disaster recovery prepartion, and it shows us clearly that it’s only when you’ve carried out full risk management assessments that you can really start to put business continuity plans in place.

Events in Japan really bring home the need for continuity in a crisis event. If you’re not convinced that you have the right plans in place, then visit our business continuity pages to see how we might help: www.maxima.co.uk/solutions/unified-infrastructure/business-continuity. Maxima can help develop and implement your plans, with advice from initial consultancy through to specific technical input on data centre technology, virtualisation, cloud solutions, connectivity, storage and duplicated failover systems for critical applications.

In Britain we’re fortunate to live in an area that isn’t seriously threatened by extreme events such as earthquakes or tsunamis – however that doesn’t mean we’re not subject to significant business continuity threats. We’ve seen flooding prove an increasing threat over recent years – particularly in areas such as Gloucestershire, Cumbria and the Vale of York, while factors such as fire are ever present, and when the accident happened at the Buncefield chemical plant near Hemel Hempstead in 2006 nearly 400 businesses were affected and the total economic loss was enormous.

At Buncefield most of the affected businesses didn’t have any effective business continuity in place. Businesses today can’t afford to take that chance.