In Managing Business Risk, we discussed Business Continuity Planning and how it is one of the best ways to manage risk, including supply chain risk. A major component of business continuity planning is disaster recovery planning, and after my recent posts on how Your Supply Chain is NOT Secure, diaster recovery planning should be at the forefront of your thoughts.
If you find planning for a disaster daunting, it never hurts to bring in some outside help, and if you think the costs of setting up a backup operation are prohibitive, then you might want to consider outsourcing that as well.
A recent article in the Outsourcing Journal, Why Every Business Needs a Disaster-Recovery Plan, demonstrates how it can be an effective option. It discusses how Citrix was able to literally move their factory from one side of the country to the other with the flick of a switch thanks to HP‘s disaster recovery service which had the backbone and infrastructure needed to take over Citrix’s world-wide ordering and fulfillment process across all 670 SKUs.
Selecting a disaster recovery outsource provider is not an easy task, and Citrix spent 18 months interviewing and evaluating 20 firms globally before making a choice based on a 32-question report card. However, your process need not take quite as long if you heed Citrix’s advice and focus only on outsourcing provider willing to work with you and address your concerns. As the article notes, transition can be turmoil in most outsourcing arrangements, but if the company is willing to commit the necessary time and resources and work with you to make the transition seamless, it can be.
In addition, the provider should be comfortable with quarterly management reviews and clear metrics. Everybody should be looking at delivery performance, quality, customer satisfaction, and cost improvements every 91 days and identifying opportunities for improvements. Then, both parties should jointly choose two or three initiatives to work on during the upcoming quarter and follow through.
As per the article, done well, outsourcing has the following benefits:
- Increases productivity
- Increases mobility
- Frees up resources to focus on core competencies and innovation
- Provides business continuity and security
- Reduces complexity and improves performance
- Consolidates to create a single view into technology environment
- Provides governance and compliance
- Improves process
- Reduces points of accountability
- Provides accountability to service level agreements