Organisations that fail to embrace disaster recovery solutions and business continuity planning are wasting money and run the risk of jeopardising their future says Mike Osborne, managing director of Phoenix’s Business Continuity Unit, further to a recent report putting economic losses from disasters at US$56bn for the first six months 2013. And while the report says global insurers covered up to US$20bn, this still leaves a US$36bn hole.

Swiss Re’s recent report on the total costs of disasters from natural catastrophes and man-made disasters puts that cost at a US$307,692,300 a day, Osborne points out that which will most likely have been absorbed as an unexpected cost to businesses, as well as failing to account for the disruption and reputational damage these disasters would of inevitably caused.

“The figures released by Swiss Re were staggering. To think that the costs of global disasters comes in at $56bn, which can be broken down to almost a quarter of a million dollars a minute is a terrifying thought and hopefully any organisations that have seen this research will have given serious thoughts to the processes they put in place to protect their business,” Osborne said.

“This really should bring home the importance of effective business continuity planning. Any organisation that does not undertake such practices currently, should use this as a call to action to do so, in order to safe guard their operational and financial futures.”

“When reading figures such as this, it is perplexing to think why some organisations take such an apparent blasé approach to protecting their business. An extremely robust business continuity programme typically costs less than one per cent of turnover, with such a program providing recovery into alternative facilities within four hours and a proactive customer and market communications capability,” he continued.

“Business continuity, amongst some firms, is still viewed with a fail and fix mentality. In fact, some see it as an area in which cutbacks can be made, reducing the amount of funds and specialist staff available to understand and respond to major incidents. In a world where reputation is key, an approach like this can have disastrous consequences with huge financial implications, ultimately leading to businesses failing.”

Osborne concluded: “The figures from the survey clearly demonstrate the obvious benefits business continuity can have to safe guard and ensure continuity of service in the most testing times. Ultimately, there needs to be a shift away from a recovery mentality to one, which focuses on resilience. Disasters do occur and these results demonstrate that they can be costly. Organisations need to act now and not pay later.”

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