Are Indian companies prepared for business continuity?

Are Indian companies prepared for business continuity?

Hurricane Sandy ravaged the US, forcing corporations to close down data centres. The superstorm once again brought to the spotlight the need to have processes and plans to ensure that a business's critical IT systems continue to run during a technical failure, natural disaster or terrorist attack.

As tropical superstorm Sandy crippled New York's financial district on October 29, worried bosses at India's pharmaceutical and biotechnology company Wockhardt asked their Chief Information Officer (CIO), Venkat Iyer: "Where are we on disaster recovery"?

Wockhardt has a factory in the mid-western US and a sales office in New Jersey state, where Sandy wreaked some of its worst damage. However, the company runs all its IT from India. "So we are untouched by the current crisis. We have multiple connectivity. Our primary data centre is in Mumbai, where we have most of our users, while our DR site is in Bangalore," Iyer says.


Business continuity planning should be owned by the business, not by the CIOs offi ce. The CIO is just a stakeholder

Preparedness should not be tested in a controlled environment. Trials should be unannounced, or they may become like fi re drills, which few take seriously

If the business is critical, continuity should be planned at different levels: data centre, corporate offi ce, city, region and country. This is important if the company runs international operations

A small business with limited resources can invest in an old machine for backup. During a disaster, it can get a few people started on work.
DR, or disaster recovery, refers to processes and plans to ensure that a business's critical IT systems continue to run during a technical failure, natural disaster or terrorist attack. A DR site constantly replicates data generated at the primary data centre. When the centre fails, the company can switch over to the DR site.

Wockhardt has ensured that its DR systems are available at all times, but this is not the case with many other companies in India, particularly smaller ones, who may consider the replication of data at a different location a luxury. "The cost of setting up DR can be a minimum of Rs 2 crore initially," says Iyer. "This includes investment in servers, database and application licences, connectivity and space rental. The recurring cost will be 30 to 40 per cent of the initial investment every year."

Smaller companies therefore choose the cheaper option of copying data on tapes and storing them at a branch office or some other location. They typically shut down in the night and take these backups. If they lose their servers in a disaster, the taped data can be installed on rented servers. Tapes are cheaper than DR, as the initial cost may be in lakhs rather than crores. But as companies grow, this method is inefficient.

Several surveys have highlighted the lack of importance given to DR by companies in India. A 2012 survey by EMC, an IT storage company, noted that the average amount of data lost by organisations in India (713 GB) is significantly more than that lost by organisations across the Asia-Pacific region and Japan (484 GB).

On September 23 this year, the DNA newspaper reported that ICICI Bank closed more than 200,000 customer accounts because records were lost during the July 2005 floods in Mumbai as the bank had no backup. ICICI clarified to Business Today that due to the floods that year, some of its 3-in-1 account opening forms were damaged. "By taking immediate action, we restored most of them quickly," a spokesperson said, adding that customers were not impacted.

The spokesperson added that the bank has digitised account opening forms and other customer records, and these are now stored on secure servers. "There are elaborate backups so we can access customer data from more than one place. Hence, we do not expect natural calamities to impact these records in the future."

Jaya Vaidhyanathan, Executive VP at Standard Chartered Bank's global technology centre, Chennai
We run drills many times a year to test if business continuity plans work. We ramp down processes in one location and increase them in another: Jaya Vaidhyanathan
Irrespective of whatever happened at ICICI in 2005, the banking and financial services industry has been a major adopter of DR. "The sector is better prepared," says Surajit Sen, Country Manager of EMC India's Backup and Recovery System division. "It is highly susceptible to disaster, and a big contribution has come from the Reserve Bank of India in terms of regulation." Large companies periodically conduct DR drills. "We run drills many times a year to test if business continuity plans work," says Jaya Vaidhyanathan, Executive Vice President and Head of Technology at Standard Chartered Bank's Global Shared Service Centre in Chennai. "We ramp down volumes of processes in one location and increase those in a different location, for instance." The drills have helped the bank many times. The last was in April, when strong tremors shook Chennai. "Employees were evacuated for a while, but there was no impact on business because additional processing of banking operations happened from Padur, 28 km from Chennai, and our Bangalore offices," says Vaidhyanathan.

But Dhiren Savla, CIO of VFS Global, which provides outsourcing services to diplomatic missions, is sceptical of drills. "DR trials are done in a controlled environment," he says. "When disaster strikes, it may not work." VFS has operations in 87 countries, and data centres in India and the UK.

M.D. Agrawal, General Manager at Bharat Petroleum Corporation Ltd, who plays the role of CIO, notes that most foreign companies have one data centre outside their country. In Europe, he adds, most data centres are located outside the city, where they are safer. "In India, most data centres are within cities," he says. "The selection of the site has to be looked into, and there should be some regulations guiding this."

Ironically, Bharat Petroleum's primary data centre is in Mumbai, and the DR is in Noida, which falls in a zone designated as earthquake-prone. As awareness about business continuity increases, Indian companies may find themselves shifting their data centres to areas with lower levels of seismicity - say, Hyderabad or Bangalore. Corporate India still has some distance to go before it is prepared for disaster.