Hurricane Katrina: initial impacts on business continuity thinking

Get free weekly news by e-mailWhat issues does the impact of Katrina raise for the business continuity profession? David Honour reports.


Amongst business continuity professionals, the most commonly expressed sentiment in the last few days seems to be that nothing could have been done to prepare local businesses for the scale of the catastrophe brought upon them by Hurricane Katrina. In many respects, this is true. Some disasters are just simply too huge to expect business continuity plans to enable a rapid return to business-as-usual. But it’s not completely correct:

LOCATION, LOCATION, LOCATION…
The only way that a disaster on the scale of Katrina can be mitigated is to not be there in the first place. The hurricane raises substantial location issues which business continuity professionals need to address. Perhaps the first stage in developing a business continuity plan must be to ask “Is the business located in the appropriate place?” To answer this, the following will be needed:

  • Information on local geographical and physical risks. What is the earthquake risk; the flood risk; the hurricane risk etc for that location? What would a worst case scenario look like if any of these events occurred?
  • Guidance on how the above threats may change over the next few years. For example: will climate change enhance risk levels? Will planned developments in the area affect the flood plain?
  • Market information. Does the business need to be located where it is for specific business reasons?
  • Workforce information. Would relocation mean the loss of key skills and people?
  • Financial information. What would the projected costs of a relocation be, compared to the costs of rebuilding the business following a worst-case disaster?

Although business relocation is a costly and disruptive process, for some companies it may be an appropriate business continuity measure.

As well as the above, there are various issues that the Hurricane Katrina disaster raises which the business continuity profession needs to explore. These include:

LOOTING
Looting is not an issue which appears on many business continuity checklists, but, as demonstrated in the last few days, it is an inevitable consequence of most wide-area disasters. Businesses continuity planners who have not thought through this issue would be wise to do so. What new measures should be put in place to reduce the risk of valuable items being looted? Are current security systems robust enough to cope with determined looters? Have anti-looting measures been included in evacuation plans?

TELECOMS
Time after time in post-disaster reviews it is the failure of the telecommunications infrastructure which has caused some of the greatest difficulties for disaster recovery and crisis management teams. Surely the time has come for business continuity managers to learn the lesson and to explore the provision of robust alternatives. Satellite telecommunications for crisis teams is one obvious solution, at least allowing limited communications with first responders and with the world outside the disaster-zone.

INSURANCE
Hurricane Katrina has shown the value of insurance. Business continuity planning will never, and should never, replace the need for businesses to be protected by appropriate and up-to-date insurance policies. Insurance and business continuity planning work hand-in-hand to ensure business survival. Don’t neglect one for the other. Katrina is a horrendous reminder to business continuity planners to ask questions about their company’s insurance status; to make sure that the company is adequately insured for business interruption and that all claims information is included in business continuity documentation.

ADD YOUR THOUGHTS: e-mail editor@continuitycentral.com

David Honour is editor of Continuity Central.

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Date: 2nd September 2005 •Region: US/World •Type: Article •Topic: BC general
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Updated 8th September





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