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Spring Journal

Volume 32, Issue 1

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Time is of the essence when recovering your company’s lost data. While you are impatiently waiting for your IT department to recover your data, your customers may be contacting other vendors. Just-in-time manufacturing and the global digitalization of information have put a premium on timely services, and consequentially, a premium on rapid access to digital data. Rapid access to data is a distinct competitive advantage in this marketplace. Gone are the days when a business could wait for days while their data is found, or worse, reentered into their computers. According to a Needham & Company investment analysis, a common benchmark among IT managers is that one cent of data backup is worth $2,500 of data re-entry.

Data loss can result from a wide variety of causes, including human error, equipment failure, database corruption, hacking, computer viruses, and various other external disasters. According to a recent study by Internet security firm Riptech, corporate computer security breaches increased by 50 percent last year. In the same study, 41 percent of the companies in the study experienced “critical” attacks on their information. Systematic and cost-effective backup and archiving (storage of infrequently accessed information) of data stored on client/server networks have become essential.

People who successfully overcome personal crises can grow to function better than before. Significant predictors are their coping mechanisms prior to the event and the support received as a consequence. Similarly, organizations, when faced with a crisis have been known to change into organizations that are stronger and sometimes better. Such transformation does not just happen. It requires leadership and a demonstrated concern for those affected.

As a result of Sept. 11, 2001, many New York businesses faced extinction due to loss of life and property. Two brokerage firms, Cantor Fitzgerald and Sandler O’Neill, were among the hardest hit. But like individuals successfully emerging from tragedy, these companies have been steadily crawling back. In both individuals and organizations, the will to survive, an ability to take in support, and the coping structures already in place prior to the tragedy will contribute to such a recovery.

Judith Herman, M.D., noted trauma expert at Harvard University School of Medicine, created a model of recovery for individuals suffering from trauma. This article discusses that model and then applies it to organizations by tracking these two financial firms’ journey from devastation to a new life.


No company is an island. In today’s complex world, all institutions depend on others to perform their daily business. These interdependencies become especially critical in the face of disruptions and emergencies. Without effective collaboration during a crisis, a company can lose money, customer confidence, market value, and, ultimately, human life. Consequently, business continuity planners must identify ways to work with those organizations they will have to rely upon to meet the challenges of the range of different problems that may impact their companies.

Despite the clear need for collaboration, historically there have been two principal obstacles to effectively addressing the problem: organizational issues and technological limitations. In many ways, the organizational challenge is the most difficult to overcome. Each company and public agency has its unique mission, culture, and ways of doing business that are deeply ingrained in the company. Even more importantly, organizations are innately private. Their automatic response is to keep information private as a competitive advantage.

Firewalls are built – both physical and procedural – to keep external bodies from obtaining access to internal information, both proprietary but also non-proprietary. While there are points where disparate companies may intersect, there are many more ways in which they differ in daily business and distance themselves. Bringing companies together to perform routine tasks is challenging, and making cross-company communications work during crisis is impossible unless conscious effort has been given to bridging the collaborative gaps.


How would your company evacuate and communicate with employees if a dirty bomb exploded within a 10-mile radius or your building was threatened with radioactive, biological, or chemical agents? Or what if a new, more sophisticated cyber-terrorism attack from a Mideast terror cell suddenly penetrated your firewall and shut down your operations completely?

Does the current crisis plan gathering dust on your shelves really provide up-to-the-minute protection for these types of events?

Any crisis management plan prior to Sept. 11, 2001, is obsolete since it does not deal with many of the new potential terrorist activities that are now part of our consciousness.

At the same time, American businesses are facing a virulent situation – the fallout from the Enron/Andersen debacle. The ensuing virus-like effect of “Enronitis” is infecting every company or industry that was ever affiliated with the now bankrupt energy-trading giant. Manufacturing conglomerate Tyco, the latest company to be scrutinized for shady financial reporting, is in a mad dash to avoid becoming the next-largest casualty case in U.S. history and is hastily selling off its lending unit for an immediate cash supplement. Though Wall Street does seem to approve of Tyco’s quick response, health care products maker C.R. Bard Inc. has just called off its imminent merger with Tyco that was announced in May 2001.

In addition, a black cloud of suspicion and distrust now blankets the accounting industry as a whole and continues to grow as the depth of Andersen’s deception is fully realized. Experts say it’s going to be virtually impossible for the accounting industry as a whole to escape the crisis unscathed. Other professional services’ sectors such as management consulting, advertising and law are beginning to examine their vulnerabilities in the post-Enron world as well.

I can recall companies losing an entire day-and-a-half to the Love Bug virus.

Everything shut down; people were once again relying on telephones, fax machines, and good, old-fashioned paper and pen to get work done. Imagine that? With the technology available today, that seems pretty unthinkable. These things happen. They are not so infrequent occurrences that IT managers can say, “That’s once in a blue moon. But I’ve got seven million other things to do this quarter, so I think I’ll put the data backup and disaster recovery plans on the backburner for now.” While it’s great to think long-term and big picture, sometimes you need to think smaller, and plan for the seemingly innocuous occurrences that can cost a company thousands, if not millions, of dollars.
It took a tragic event last September to make us all realize the gravity and importance of implementing a foolproof data backup and disaster recovery plan.

Nothing is ever completely foolproof, though there are far lesser evils to worry about when trying to protect your data than what happened on Sept. 11, 2001.

The Love Bug virus is but one example. These evils are not caused by some outside catastrophe, but are part of the daily routine and culture of any organization. In fact, they stem from the very necessary fabric that makes companies successful – new software implementations, system upgrades, the constant sharing of data and, above all, human beings. Each of these plays a significant part in the everyday workings of an enterprise, and its difficult to keep it all running smoothly and efficiently. Unfortunately, they are also the things you need to worry about most when considering data backup and disaster recovery options.