Many commercial contracts include specific definitions of what a ‘disaster’ is. Generally speaking, however, in a contractual context a ‘disaster’ refers to an unplanned interruption of, or inaccessibility to, a service, product or system. For example, the most frequent disasters are component failure, human errors and longer-term data-centre electrical failures. Organisations should analyse and manage the risk applicable to its business in the event of a disaster. A commonly used preventative and reactive management technique is the inclusion of a business continuity disaster recovery (BCDR) plan as part of the organisation’s risk strategy and within its key commercial contracts.
A BCDR plan is a plan for an emergency response and/or back-up procedures that apply in the event of a ‘disaster’. The aim of a BCDR plan is to maintain business operations at an acceptable, predefined level. Every organisation should have a BCDR plan and, when procuring services (in particular concerning IT infrastructure and other core services), should ensure that, where appropriate, each of its service providers has an adequate BCDR plan in place.
In October 2012, Hurricane Sandy resulted in significant disruption for businesses in the North Eastern United States. In particular, data centres and IT service providers in New York were affected. Organisations with appropriate and adequate BCDR plans in place were able to continue providing services to customers, whereas others – in some cases in the same building and with similar, but inadequate, BCDR provisions – were not…
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