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The Business Case for Preparedness
Mantaining Revenue Stream
May 23, 2008 11:19 PM
The business impact of crises can run into the billions. The 1990 Wall Street Blackout and the 1992 Chicago flood are two examples.
How a company responds to corporate catastrophes impacts a firm's share price. This impact is doubled in the case of mass fatality events.
Source: "Justifying the Contingency Plan", John Watkins, Disaster Recovery Journal, 1997
Link: http://www.drj.com/new2dr/w2_011.htm
Key Points:
* The article argues that initiating a Business Impact Analysis can have positive implications for the bottom line, especially in the event of a disaster.
* "...for any CEO or CFO who thinks contingency planning is a waste of money, two incidents clearly point out the necessity of a well thought out recovery plan: the August 13, 1990 Wall Street blackout and the April 13, 1992 downtown Chicago flood. In the Wall Street outage 28 firms relocated to hotsites, and in the Chicago flood that number was still higher: 33 firms. The Chicago Board of Trade, one of the world's largest financial exchanges, closed down completely on the first day of the flood and affected all world financial markets because of the volume of uncleared trades. The most important fact for any executive to remember about both the New York and Chicago disasters is that the cost in dollars most frequently heard is billions". However, it will probably prove impossible to refine that estimate because corporations are reluctant to discuss their losses."