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Winter Journal

Volume 27, Issue 1

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RTO’s Role In Recovery Planning

Written by  JIM BARNES, CBCP, MBCI January 6, 2009

The recovery time objective (RTO) is a dynamic number, one with several implications. It not only tells us when we have to be back in business, but it also implies how we should develop and write our plans. To understand the RTO, we should first understand what happens during a disaster (from a financial point of view). A disaster is an event that takes one or more productive resources off line. It may be staff, computers, communications, facility, etc. So, what is the rush to get the organization back in production? From the financial perspective, when a disaster occurs, income stops, many of the ordinary expenses continue (facilities expenses, salaries, etc.), and at the same time many extraordinary expenses are incurred (temporary housing, hot-site fees, replacement equipment, etc.). The effect of these three factors is a decline in equity position (net asset position for non-profit organizations). I lived in Miami during Hurricane

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