Disasters in recent years have highlighted the need for a disaster recovery plan. Companies buy insurance for their buildings and equipment; why shouldn’t they protect their data, too? Studies cited by Acronis in their white paper state that the cost to a business can be enormous. One hour of downtime can cost more than $100,000 a year, and most businesses can expect at least one outage in a two-year period. After a disaster, 25% percent of businesses don’t reopen. So the need for a disaster recovery (DR) plan is obvious. But how does a company make it an investment rather than a cost?
Getting Good Return on Investment (ROI)
Although the need to have a plan to recover data – a business’ greatest asset—is obvious, many companies have difficulty implementing plans because of a lack of resources or difficulty in determining a return on investment (ROI). Disaster recovery is a way of insuring your company’s data, much as you would insure your business or home. To determine ROI, acceptable losses and costs need to be determined first.
Building Blocks of the ROI Calculation
The crux of the ROI formula is how much money would be saved with a solution in place, versus how much would be lost without the plan in place. Several factors go into determining the key components of the ROI. Avoided loss is the difference between unprotected and protected downtime loss. This will help you choose which type of DR solution to purchase. Then, the DR solution cost can be determined using the combination of Recovery Point Objective (RPO) and Recovery Time Objective (RTO). The RPO is how much data can be lost, and RTO is how long critical systems can remain offline. Both downtimes are multiplied by the hourly revenue (the company’s total revenue divided by number of working hours in the year). This is the first component of the ROI formula. The second component is the cost of the DR solution. Consult your CFO for a target ROI. Once you have done this, and calculated the ROI, you can then present the disaster recovery solution to your executive team.
There is no reason to face the possibility of another disaster—natural or man-made—without a strategy in place. And this plan can be an investment, rather than another cost. To start planning your strategy, contact IMCJAX today at 904-400-7300.
