THE IMPORTANCE OF BENCHMARKING
Organizations decide to conduct benchmarking programs for a variety of reasons; however, they typically include several interrelated elements. Changing markets and competitive activity, coupled with decreasing returns as mass market approaches lead to commodity process and lower profit margins, have caused many organizations to downsize, re-engineer or re-organize in an effort to remain competitive. Outsourcing options have been successfully accomplished by many large and credible organizations, and benchmarks are typically used at many checkpoints within outsourcing agreements. Another factor adding to the popularity of benchmarking is the emphasis on quality initiatives. Total quality management and continuous improvement efforts require a baseline measurement program in order to be effective.
THE CASE FOR BENCHMARKING BUSINESS CONTINUITY PROGRAMS
The case for benchmarking an organization's BCP results from three separate factors:
- After the Year 2000 event, many organizations are unsure that they have the appropriate resources dedicated to BCP.
- The changing computing climate with the proliferation of distributed Web-enabled computing resources may have left gaps in traditional disaster recovery-based plans.
- The shift of IT from an internal service organization to a revenue-enabling organization cast BCP in an entirely new light.
The protection of Enterprise assets and the ability to continue business operations in light of today's shifts in technological solutions necessitates that an effective business continuity program be in place to avoid impacts to service delivery and to maintain shareholder value.
To answer the concerns above and many other concerns from individual organizations, Gartner and Comdisco have co-developed and extended the benchmarking methodology from GartnerMeasurement using Comdisco's continuity lifecycle methodology.
BUSINESS CONTINUITY BENCHMARKING
The goal of the Business Continuity Benchmarking (BCB) product is to examine the business continuity plans of an enterprise and measure its efficiency and effectiveness. The efficiency component is a measure of the total cost incurred by an organization to provide its business continuity program. The costs are gathered using the Gartner consensus costs models, which allows for an 'apples to apples' comparison of organizations that are:
Within the same industry
- Approximately the same size
- Top performers
- Within the same area.
The cost comparisons are gathered and compared across three different organizational domains. These domains are:
Each of these domains has its own cost drivers that will contribute to the total cost of managing a business continuity program. By comparing an organization's cost model against a database of 'normalized' costs, Gartner will be able to measure and compare the efficiency of the individual BCP in terms of money and headcount. (Figure1)
Because it is possible to be very efficient in terms of resources and not meet business requirements, it is necessary to develop a metric for overall effectiveness. To accomplish this we have again relied on the existing Gartner Benchmarking Methodology to develop an 'Efficiency Index.' The 'Efficiency Index' uses Comdisco's industry recognized Continuity Lifecycle methodology as its basis. In this case, the index is the Business Continuity Index (BCI). The BCI is a measure of the Business Continuity Requirements divided by the Business Continuity Services Delivered. In the case where the Requirements are exactly equal to the Services Delivered, that would result in a BCI = 1.0. The process of determining the Business Requirements and the Services Delivered begins with responding to a benchmarking questionnaire. The questionnaire is then validated, the responses are weighted and scaled, and a resulting BCI is calculated. (Figure 2)
THE BOTTOM LINE
he combination of BCP Efficiency and BCP Effectiveness provides a unique view of an organization's position within the BCB Magic Quadrant. The midpoint of the quadrant is a point where the cost per BCU (the horizontal axis) is at the database midpoint and the Business Requirements = Services Delivered (BCI=1.0). Therefore, organizations that fall in the lower right quadrant are cost efficient, but are not meeting requirements. The upper-right quadrant contains those organizations that are exceeding requirements and are cost efficient. The upper-left quadrant represents those organizations that are exceeding business requirements with greater than average costs, and the lower-left quadrant represents those organizations that are not meeting requirements with above-average costs.
f the quadrant is completed by industry or with the whole database population, an organization's position on the chart will provide insight into the effect that management decisions have had upon its business continuity program. (Figure 3)
For more information about this offering, please contact: Fred Luevano, Director, Gartner Consulting, Phone: 562-690-8544, e-mail: firstname.lastname@example.org.