Human Error/ Operations Risk

Content/Application Links to Third Parties

Outsourced Service Providers

Performance/Capacity

Security Incidents

Closed

Planned/Unplanned Downtime

New E-Commerce Risks

• IT and business process management are integrated — no longer solo views

• Production costs increase — no separate budget for BCP• Risk identification and management take on a matrix

management focus, e.g., technology, financial, trading, operations

• Problems are public — IT and business problem management must be integrated; root cause analysis

• Only as strong as your weakest link — good application/bad operations

• Contingency plans become critical when automation isn’t there — every component of the business process now must have a plan

E-Commerce BC: New Rules/New Realities

Disaster Recovery

Business Recovery

Business Resumption

Contingency Planning

Objective Mission-critical applications

Mission- critical business processing (workspace)

Business process workarounds

External event

Focus Site or component outage (external)

Site outage (external)

Application outage (internal)

External behavior forcing change to internal

Deliverable Disaster recovery plan

Business recovery plan

Alternate processing plan

Business contingency plan

Sample Event(s)

Fire at the data center; critical server failure

Electrical outage in the building

Credit authorization system down

Main supplier cannot ship due to its own problem

Sample Solution

Recovery site in a different location

Recovery site in a different power grid

Manual procedure 25% backup of vital products; backup supplier

Crisis Management

BC Components

Creating Business Continuity Plans

Business Impact Analysis

Risk Analysis

Recovery Strategy

Group Plans and Procedures

Business Continuity Planning Initiation

Risk Reduction

ImplementStandby Facilities

Create Planning Organization

Testing

PROCESS

Change Management Education Testing Review

Policy ScopeResourcesOrganization

Ongoing Process

Project

Awareness Programs Fiduciary Responsibility

BIA & Risk AssessmentCatalysts

Obtaining Management Commitment

Security Incident Detection & Response

Prevention/Planning

Detection

Incident Response

InvestigationEvidence

Legal Action

Business Req.

SystemArchitecture

SystemDesign Construct Test Implement

PostImple-ment

• Identify technology and business continuity risks from a business perspective – BIA/ risk analysis RTO/RPO

• Ensure complete cost estimate

• Ensure appropriately protected end product

• Assess risks of new technology products

• Identify secure infrastructure requirements

• Identify secure administrative requirements

• Establish security responsibilities and service- level regulations

• Identify BC/DR strategies

• Establish security test strategy

• Translate security architecture to detailed security infrastructure design

• Develop security baselines for new technologies/ products

• Develop detailed security admin. design

• Develop detailed BCP/DR design/ strategy

• Develop draft SLAs

• Develop security test plan

• Build/code security infrastructure environment and processes

• Build/code security admin. environment, roles/profiles and processes

• Build BCP/DR environment, plans and processes

• Build/code security test plan, processes, scripts and test environment

• Train secure administrative, operations, business unit, staff...

• Identify security noncompliance issues

• Identify new security exposures

• Test BCP/DR plans to ensure that RTO/RPO is attainable

• Turn over secure application infrastructure to production

• Implement secure administrative roles/profiles

• Implement business/ continuity DR environment

Project Life Cycle

• Identify changes to tested env.

• Finalize secure admin. env. and processes

• Finalize security infrastructure environment and processes

• Finalize BCP/DR env., plans and processes

• Assess SLA accuracy

• Finalize risk acceptance with business

• Ensure that info. security policies are current

Business Process Owner

Architecture and

Standards Application andTech Design

BusinessContinuity Operations

Architecture and Design

IT OperationsProblem, Change, Performance, DR

Risk Management (Financial, Technology, Operations)

InformationSecurity

Recovery/continuity strategy/ design

IT Recovery management

E-Biz Project Manager

Business Manager

Risk Manager

Business Continuity Mgr.

Audit

IT

Information Security

Business Operations

Legal/Compliance

HR / Public Relations

E-Biz Recovery Team

Business continuity strategy/design

Audit — Financial and EDP

OSPs/Business Partners

E-Commerce BC — Integrated Processes

Rules and tools

Security Incident identification/response design

Problem Identification and Impact Assessment

Problem Status/ Communication

Problem Prevention and Planning

Problem Resolution

Root Cause Analysis

Problem Management Life Cycle

Problem Mgmt Team

Business Process Owner

Customer/Partner Relationship Owner

Risk Management

Business Continuity

Information Security

IT Technical Support

IT Applications Support

Vendors/OSPs/Third Parties

Legal/Compliance

Public Relations

BCP PhaseAccounts Payable

Accounts Receivable

Cash Mmgt.

R&D Prod. Eng.Order

Fulfillment

Impact Analysis

Risk Analysis

Strategy

Resources Committed

Last Tested

Change Mgmt.

Last Major Review

Workable Solution

Audit

Location, Business Process or Department

Management Reporting is Critical

Too Much Testing and Reporting Is Never Enough

Revenue

Know your downtime costs per hour, day, two

days...

Productivity• Number of

employees impacted X hours out X burdened hourly rate

Damaged Reputation

• Customers• Suppliers• Financial markets• Banks• Business partners• ...

Financial Performance

• Revenue recognition• Cash flow• Lost discounts (A/P)• Payment guarantees• Credit rating• Stock price

Other ExpensesTemporary employees, equipment rental, overtime costs, extra shipping costs, travel expenses...

What Is Your Cost of Downtime?

• Direct loss• Compensatory payments• Lost future revenue• Billing losses• Investment losses

Cost

Disaster Recovery Times24

hours48

hours72

hoursMinutes12 hrs.

StandardRecovery

Elec.Vaulting

ElectronicJournaling

Shadowing

Mirroring

Database and/or fileand/or object backup

Log/journal transfer(continuous or periodic)

Database and/or file and/or object replication

Assumes mirroring or shadowing plusa complete application environment

net $host $disk $tape $

net $tape $

net $-$$+host $$+disk $$$$+

net $$$+host $$+disk $$$$+

net $$$+host $$$+disk $$$$+appl. $+

Hot Standby orLoad-Balanced

Applying High Availability to Disaster Recovery

Standby or Active

Geographic Load BalancerSite Load Balancer

Database Clusters

Application Server Clusters

Site Load Balancer

Web Server Clusters

Database Clusters

Database Replication

Transaction Replication

Designing E-Commerce Applications for No Single-Point-of-Failure

Database Clusters

Database Clusters

Host-based

Disk-based

Replication Methods Examples

Disk-to-Disk mirroring EMC SRDF, Compaq DRM, IBM PPRC and XRC, HDS HARC and HRC

Log-based DBMS replication

Quest Shareplex, Oracle Standby Database, ENET RRDF, SQL Server 2000

Server-based block or file replication

Legato Octopus, NSI Doubletake, Veritas SRVM

Application-based replication

Typically implemented with message-queuing middleware

Data Replication for Continuous Availability

Emerging Technologies/Services

• Capacity on demand/emergency back-up

• Wide-area clusters

– HP Continental Clusters

– IBM Geographically Dispersed Parallel Sysplex

• Cascading data replication

Disks

Host

OperationalSite

High Bandwidth (fiber)

Disks

Host

Metropolitan/RegionalRecovery Facility

Tape Backup/Archival

Disks

Host

Primary Recovery Site

High-Availability-

Based Service

2000 2004

Warm Site andMobile Recovery

Quick Ship

Warm Site and Mobile Recovery

Quick Ship

Load-Balanced (2+Sites)

Disaster Recovery: Market Dynamics

External (dedicated)

External (shared)Internal

•You have an alternative facility (50 km distant)

•BC vendors have insufficient capacity

•BC is a recognized and respected discipline

•You cannot economically benefit from syndication

•You do not have an alternate facility

•You desire multisite continuous availability or hot standby support

•RTOs/RPOs are very short

•You want to focus on core competencies

•Getting management sign-off for dedicated capital is difficult

•Experience of supporting an invocation is important

•Your planning scenarios include loss of technical staff

Resource Internally or Externally

• Comdisco Recovery Services and Web Availability Services• IBM Business Continuity Recovery Services and Outsourcing Services• SunGard Recovery Services and E-Sourcing

• Professional services• Planning software• Hot/warm/cold standby• Mobile/static facilities• Mainframe/midrange/desktop• Quick ship

Business Continuity and Internet Services• Peripherals• Networks• Work area• Specialized ancillary services

such as check processing and data recovery

What’s new — Full-service Web-hosting with BC “designed in,” multisite infrastructures for continuous availability, Web site and network “throttling” for performance

North AmericanBusiness Continuity Market

Full-Service Providers

CostAlways use competitive tendering, even at renewal

Keep contracts to three years

Unbundle contract costs

Understand upgrade costs

Specify test time and additionalfees

Declaration fees are negotiable

For unsyndicated equipment, check cost of self-acquisitionAnnual cap fees

Contract TermsInclude early-termination conditions

MiscellaneousUnderstand the right of access: “first come, first served” or sharedCheck syndication levels, risk exposures and exclusion zones

Touch the equipment. Visit the recovery center

Agree to a buy-out schedule

Specify occupancy/comm. fees

Negotiating a Favorable BC Contract — Balance Risk With Economies of Scale