Disaster is unacceptable. The only question is who provides your safety net?
That’s the reality of retailing today, in which executives must choose between backing up systems themselves, or hiring someone else to do it. Risking total collapse is not an option.Every retailer has to consider worst-case scenarios, such as natural or other disasters that blackout power and bring business to a standstill. Damage and downtime are the nightmares of every merchant.
But in today’s 24×7 marketplace, in which companies serve consumers globally and around the clock over the Web, how much downtime can your business afford? For most retail operations, the answer is virtually none. “Going home at night and shutting the lights off is no longer economically feasible,” says Steve Finnes, AS/400 technology segment manager at IBM. “So instead, companies are wringing every last bit of value out of their intellectual and physical capital. And that means running around the clock.”
In many cases, you can’t afford to lose even five minutes of transaction data: Downed systems need to be replaced immediately, with no noticeable loss of data. This non-stop approach to business has triggered an industrywide shift of focus from mere disaster recovery (picking up the pieces and getting back online after a major natural disaster or technical failure strikes) to business continuity (ensuring that your information systems stay up and running, regardless of what happens). “Business continuity says you can’t afford to have a disaster,” according to Jeff Schiebe, director of business continuity solutions in Compaq’s Professional Services Division.
Often, ensuring business continuity requires redundant data storage, clustered servers, and, of course, multiple locations, separated by enough geographic distance to ensure that whatever disaster hits one site won’t affect the others. Yet for small and midsize retailers, the cost of maintaining redundant servers in multiple locations is often prohibitive, particularly when you’re talking about expensive mainframe and minicomputer systems. Enter the business continuity service providers. “Could a customer provide that backup themselves? Yes, they could,” says Ann Pickren, a senior vice president in the Professional Services Organization of Comdisco, a provider of business continuity services. “But they didn’t want to have the cost of owning and maintaining a duplicate system, in a different facility, with duplicate software licenses and so forth.” Outsourcing, in effect, allows customers to share the cost of an emergency computing facility–one that they hope they will never use. Comdisco provides a range of business continuity services through its 50 worldwide “Technology Service Centers,” each of which contains a variety of hardware, operating platforms, and applications. Business continuity contracts are typically customized to each customer’s particular needs, says Pickren. A contract could provide for something as simple as assisting in recovering data from backup tapes maintained by the customer, or as complex as providing a complete, mirrored replica of the customer’s server infrastructure in a service center located far away.
Retail customers in particular may have special needs centered on proprietary applications or point-of-sale equipment, says Pickren. While Comdisco can support these customers, such contracts will cost more, due to the expense of installing and maintaining a unique platform. Business continuity services also solve another dilemma of the global or Internet retail IS department: When do you back up or upgrade your system, if it’s got to be online around the clock? With a fully-functioning cluster of servers, it’s possible to take one server offline for maintenance while the others remain alive.
Not for Everyone
Outsourcing of business continuity services is probably most appealing to small and mid-size retailers, who can least afford the expense of multiple servers. Larger retail chains, which may already be running several mainframe or minicomputer systems, can more easily arrange their IT infrastructure to accomodate planned–or unplanned–downtime. For example, Oriental Trading Company, a large direct merchant of toys and novelty products based in Omaha, Nebraska, runs seven AS/400 systems, two of which drive its website (www.oriental.com). Oriental’s systems engineering manager Bob Cargill says that the company never considered outsourcing disaster recovery. “We felt that we were large enough that we could do it in-house,” says Cargill. Of course, the backup systems aren’t just sitting idle, Cargill reports; backup servers are used for running batch-mode reports, backing up data, or for testing new applications. “We try to utilize the capacity that we’ve got,” Cargill says.
Before you can even begin planning for disaster recovery and installing business continuity safeguards, you need to examine your company’s tolerance for risk–and the costs of potential downtime. “The key to a lot of our customers is to help them understand their business requirements. We always say, before you tell me what your strategy is, has that been validated by the requirements of the business unit itself?” says Pickren. Compaq’s Schiebe agrees: “If you’re a major chain like Macy’s, you’re going to have all your things backed up. But if I’m a smaller company, say just three locations, I’m probably not going to have the money, so I’ll take a bigger risk. How do I manage the risk? Perhaps by taking out some insurance. By having a backup plan. Or maybe by hedging my bets in some other way.” The bottom line: IS and executive management must see eye-to-eye and construct appropriate contingency plans based on the business needs of the company.
Dylan Tweney is a freelance writer in California. He can be reached at
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