Half prepared? A global study into corporate preparedness for disaster recovery and business continuity

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1 Half prepared? A global study into corporate preparedness for disaster recovery and business continuity November 2011

2 Half prepared? The latest global business survey from Regus reveals that companies across the world are almost evenly split between those that do have a disaster recovery plan in place for IT systems or workspace and those that do not. The main reasons for failing to have such a plan in place is reported to be the perceived high cost, although national variations are significant. This latest Regus survey, which interviewed over 12,000 senior business people in 85 countries, also shows that firms are more likely to have an IT disaster recovery function to help them recover operations within 24 hours than to be able to provide alternative workspace for their staff, should they be unable to access their usual work premises due to a disaster More than half of firms, however, report that they would invest in affordable alternative workplace recovery if the service were suitably priced. Although larger firms are better prepared for disaster recovery (DR) than smaller companies, 26% of larger corporates still remain without a DR facility for their IT systems, and 40% have no workspace DR facility. It is the conclusion of this study that, given the widespread availability and relative low cost of IT and workspace DR, those organisations with none in place are potentially taking an unnecessary risk with their shareholders assets. Half prepared? November 2011 Page 2

3 Management Summary Natural disasters, the rising costs of downtime and the increasingly mission critical character of applications have focused company attention towards disaster recovery solutions - yet independent research commissioned by Regus reveals that globally 45% of firms still have no disaster recovery facility for their IT systems. A third of respondents (33%) report that the perceived costs of disaster recovery are prohibitive and more than half (55%) agree that most firms like theirs would buy the option to access a workspace disaster recovery facility if that option were priced at around $100/month. It may be the case that economic pressures are encouraging management to cut costs by reducing spend on DR. However, given the widespread availability of low cost IT system and workspace disaster recovery services and facilities in today s marketplace, this may be an area which shareholders and insurers are encouraged to investigate in the light of this survey s findings. Companies that do have disaster recovery are more likely to have computing systems up and running within 24 hours (55%), than provide an alternative workspace for staff within the same time frame (45%). Some interesting national differences emerge. In particular, in Japan only 37% of firms have a disaster recovery facility for their IT systems and just under a third (32%) have a workspace disaster recovery. More companies in Australia (70%) and Germany (69%) and the UK (67%) are prepared for an IT outage than the global average (55%). Less than half of consulting companies (46%) have workspace disaster recovery, compared with 57% of financial services companies. Half prepared? November 2011 Page 3

4 Introduction Disaster recovery is maturing from being regarded as an additional safety net to a must-have business critical function and reports indicate that the global disaster recovery / business continuity market is set to reach $39 billion in With reports indicating that the average incident can cost up to $ 500,000, 2 and Symantec revealing that IT is becoming increasingly mission critical to organizations, with 60% of all applications now deemed mission critical, it is not surprising to find that disaster recovery has made it to the forefront of the agenda. 3 In addition to causing IT system outages, however, dramatic natural disasters and criminal damage can make it impossible even for staff to access their usual workplace, severely undercutting productivity unless alternative workspace arrangements can be rapidly provided. In particular, recent global events have drawn attention to the importance, not only of providing rapid IT backup, but also of providing for entirely new premises at very short notice in order for businesses to continue operating smoothly. Fires, floods, burglary, criminal damage and natural disasters will all affect both the technology and the actual workspace where business critical activities are carried out, so although personnel may be able to access information within 24 hours, they may well not be able to return to the office for a longer period of time, relying on home internet connections of varying speeds and no access to office facilities such as printers and meeting rooms for example. Larger companies may also be able to rely on their larger property portfolio to relocate staff in the event of an emergency, critically overlooking the fact that offices may be very distant from each other and not provide a suitable space. The tragic tsunami that hit Japan in March 2011, major flooding in Australia in January 2011, earthquakes in Chile and New Zealand and damage caused by Hurricane Irene are just a few of the natural disasters that affected the world in 2011 halting operations and in many cases leaving businesses with damaged premises and no plan B as to where to relocate their staff. Although these disasters had global resonance and businesses often have operations set up in various countries, significant national differences are revealed when analysing how prepared businesses are for disaster and interruption. 1 Continuity Central, ABI Research estimates business continuity and data disaster recovery market growth, 10th March Symantec, Disaster Recovery Research Report, Symantec, Disaster Recovery Research Report, 2009 Half prepared? November 2011 Page 4

5 Introduction The cost to businesses, but also insurers can be devastating and a joint report by the Business Continuity Institute and the Chartered Insurance Institute s General Insurance Faculties encouraged the insurance sector to recognise and encourage clients in the development of their own business continuity programmes in terms and pricing of business interruption insurance. 4 Lloyds of London has also warned that the insurance industry faces significant difficulties after record claims following the Australia, New Zealand, Japan and the US catastrophes in The first half of 2011 is in fact reported to have been the costliest six-month period in the insurance market s history. 5 The latest Acronis report, for example, reveals that Germany is the country where firms are most confident of their back up and business continuity processes, closely followed by the Netherlands. The rest of Europe, however, fared badly with the UK and France scoring below average. 6 In the USA, where just over half of companies test their backup facilities annually (54%), less than a third (29%) had work at home days highlighting that the remaining companies have no measure of whether their company can continue to effectively operate with employees entirely working from home and using their own resources. 7 In addition to this, a report identifying the US and Japan as the countries most likely to incur huge expenses due to natural disasters, reports that it s emerging economies such as China and India that pose a higher risk to investors as they are lacking the capacity to deal with natural catastrophe. Gartner, fortunately, highlights that Indian companies in particular see improving business continuity in the year ahead as an objective second only to achieving business growth. 8 Mexico and Canada were also rated as at high risk by the report. 9 4 The Business Continuity Institute and the Chartered Insurance Institute s General Insurance Faculties, Insurance sector views on business continuity, The Guardian, Lloyd s of London hit by record claims for natural disasters, 21st September Acronis, The Acronis Global Disaster Recovery Index: 2011, The Conference Board, Preparedness in the Private Sector-2011, Continuity Central, Gartner survey identifies business continuity as one of the top two priorities for Indian organizations, 8th March Maplecroft, Natural Hazards Risk Atlas 2011 (NRHA),2011 Half prepared? November 2011 Page 5

6 The Regus Study In order to shed some light on to the level of preparedness of global businesses and their take up of disaster recovery Regus commissioned research canvassing the opinions of over 12,000 senior managers and owners of businesses from 85 countries and found that there is a close to divide between businesses that have a plan allowing their IT systems to return to normal operation within 24 hours and those that do not. The same almost even split is also revealed when respondents were asked whether their business had workspace disaster recovery ensuring that staff could effectively return to work within 24 hours. We have a disaster recovery facility which ensures our computing systems are up and running within 24 hours Australia Germany UK Netherlands Belgium South Africa Global Average USA India Canada Mexico Brazil China France Japan 0% 10% 20% 30% 40% 50% 60% 70% 80% No Yes Half prepared? November 2011 Page 6

7 The Regus Study Although it is an old adage the most important asset to a business are its people, it would seem that little attention is devoted by businesses to ensuring that staff are provided with a suitable work location in case of emergency. In fact, 45% of businesses globally do not have vital IT back up and even more, 55% are not prepared to relocate their staff within 24 hours of a disaster taking place. In particular the IT systems of more than half of companies in France (54%), China (52%), Brazil (51%), Japan (63%) and Mexico (51%) are not ready to return operational within 24 hours. Countries that are particularly unprepared to find alternative workspace for their staff in case of emergency are: Japan (68%), Canada (65%), India (60%) and the USA (59%). While it may well be that high levels of internet penetration in some countries has led business owners to believe that home access is a suitable substitute to the office in case of an emergency, connection speeds may vary, access to office supplies and technology and the reduction of collaborative working could become critical. We have a disaster recovery facility which ensures an alternative workspace will be up and running within 24 hours Netherlands Germany Belgium Australia China UK Global Average France Mexico Brazil South Africa USA India Canada Japan 0% 10% 20% 30% 40% 50% 60% 70% 80% No Yes Globally 33% of respondents believe that the cost of disaster recovery is prohibitive and the majority (55%) of firms agree that businesses like their own would be willing to invest around $100/month to access a workspace disaster recovery facility in case of emergency. Half prepared? November 2011 Page 7

8 The Regus Study While a third of companies believe that the cost of disaster recovery is prohibitive, the research suggests that there are strong divergences in pricing or perceptions of cost across the globe. Less than a quarter of companies believe that these are prohibitive in Australia (23%), Belgium (16%), Germany (22%) and the UK (23%). I believe that the cost of formal disaster recovery facilities is prohibitive China Japan Mexico India Canada South Africa Global Average France Brazil USA Netherlands UK Australia Germany Belgium 0% 10% 20% 30% 40% 50% 60% At the other end of the spectrum, fully 50% of Chinese companies believe that business continuity is too expensive, followed by 47% of firms in Japan, where take up was the lowest, Mexico (45%) and India (44%). Half prepared? November 2011 Page 8

9 The Regus Study A number of workspace disaster recovery solutions are available on the market giving organisations immediate access to a network of temporary premises, fully functional in terms of IT, internet and office services. These are often structured on the basis of a small monthly fee that buys the option to access such workspace and facilities the moment a disaster strikes. In other words, the monthly charge contributes to the cost of providing Workplace Recovery space. In other instances, a larger monthly fee incorporates tenure for a given number of days following the disaster. In China (70%), Brazil (66%), India (66%), Mexico (67%) and South Africa (61%) a majority of respondents believe other firms like would buy the option to access a workspace disaster recovery facility if that option were priced at around $100/month. In other geographies, demand for this kind of facility is expressed by a significant proportion of respondents. I believe most firms like mine would buy the option to access a workspace disaster recovery facility if that option were priced at around $100/month China Mexico India Brazil South Africa Canada Japan Global Average Netherlands Australia USA Belgium France Germany UK 0% 10% 20% 30% 40% 50% 60% 70% 80% Half prepared? November 2011 Page 9

10 Company size variations The survey also analysed the impact of company size on the existence of a 24 hour disaster recovery function and found that as companies become larger they are more likely to have a solution in place both for their IT and for their staff. Disaster recovery by size of company Large Medium Small 0% 10% 20% 30% 40% 50% 60% 70% 80% We have a disaster recovery facility ensuring alternative workspace is available within 24 hours We have a disaster recovery facility ensuring IT systems are up and running within 24 hours Only 51% of small businesses have an IT business continuity plan in place compared to fully 74% of large businesses and, in spite of reliance on alternative offices and buildings, larger companies (60%) are also far more likely to have a workspace business continuity plan in place than small companies (43%). The perceived cost of disaster recovery is a deterrent to over a third of small firms (36%) and less so to larger firms (20%) that have more infrastructure to protect and staff to relocate. Although more than half of all firms would purchase a workspace business continuity plan priced at around $100 a month, larger firms (66%) are more likely to do so than smaller companies (53%). Half prepared? November 2011 Page 10

11 Company sector variations Understandably, the sector most likely to have an IT disaster recovery plan in place is the financial services sector. In many countries, having a continuity plan or system in place is a formal requirement for financial organisations, but the results suggest that the speed at which businesses can recover operations varies as only 71% of financial services firms declared that they have an IT disaster recovery plan that ensures they are up and running within 24 hours. Another surprising finding is that strikingly, only 66% of ICT businesses actually have an IT disaster recovery function in place. Consultancy (51%) and media (49%) firms reveal an almost 50/50 split among companies that have an IT continuity plan and those that do not. Media firms are also the least likely to have a workspace disaster recovery alternatives in place (40%), followed by consulting firms (46%). Highlighting their greater awareness of the business continuity issue financial services (57%) and ICT businesses (55%) are more likely to have a workspace recovery system in place ensuring staff can return to their normal operations within 24 hours. Disaster recovery solutions by sector Media ICT Consulting Finance 0% 10% 20% 30% 40% 50% 60% 70% 80% We have a disaster recovery facility ensuring alternative workspace is available within 24 hours We have a disaster recovery facility ensuring IT systems are up and running within 24 hours Half prepared? November 2011 Page 11

12 Company sector variations Media companies, are the most likely to be put off by the perceived cost of disaster recovery with 43% declaring that they believe the cost is prohibitive. This contrasts strongly with only around a quarter of respondents in the financial services (24%) and ICT (25%) sectors where companies are more likely to have purchased or at least investigated the option of purchasing a solution. Half prepared? November 2011 Page 12

13 Conclusion Across the globe around half of firms have no formal disaster recovery facility in place for their IT or their workforce. This lack of planning for the recovery of IT operations and for relocating staff that cannot access premises could damage businesses irrevocably should they experience extensive downtime or damage to their premises. Most businesses appear to run this risk due to the high perceived cost of Disaster Recovery, but also report that they would be willing to pay around $100/month to access a workplace recovery facility in case of emergency. This is an important indication that although the majority of businesses are taking a gamble with the resilience of their operations, the main barrier to overcome is one of perceived cost and not mentality. With more and more affordable business continuity alternatives being made available around the globe and national differences in pricing rapidly disappearing thanks to international service providers, it is likely that more businesses will finally stop taking the risk of expensive business interruption and invest in business continuity plans that allow their systems and their staff to continue working seamlessly from fully equipped locations. Half prepared? November 2011 Page 13

14 About Regus Regus is the world s largest provider of flexible workplaces, with products and services ranging from fully equipped offices to professional meeting rooms, business lounges and the world s largest network of video communication studios. Regus enables people to work their way, whether it s from home, on the road or from an office. Customers such as Google, GlaxoSmithKline, and Nokia join hundreds of thousands of growing small and medium businesses that benefit from outsourcing their office and workplace needs to Regus, allowing them to focus on their core activities. Over 900,000 customers a day benefit from Regus facilities spread across a global footprint of 1,200 locations in 550 cities and 92 countries, which allow individuals and companies to work wherever, however and whenever they want to. Regus was founded in Brussels, Belgium in 1989, is headquartered in Luxembourg and listed on the London Stock Exchange. For more information please visit: Methodology Over 12,000 business respondents from the Regus global contacts database spanning 85 countries were interviewed during August The Regus global contacts database of over 1 million business-people worldwide is highly representative of business owners and senior managers across the globe. Respondents were asked a wide variety of questions including ones about their economic performance and expectation, along with their views of the business continuity market and their use of disaster recovery alternatives within their own firms. The survey was managed and administered by the independent organisation, Mindmetre Half prepared? November 2011 Page 14

15 Notes Half prepared? November 2011 Page 15

16 Whilst every effort has been taken to verify the accuracy of this information, Regus cannot accept any responsibility or liability for reliance by any person on this report or any of the information, opinions or conclusions set out in this report.

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