Tag Archive for RPO

Another BCP Acronym

Yes, I realize that the last thing we need in Business Continuity Planning practices is another acronym, but, hey, what’s the fun in writing a blog if you can’t cause trouble?  So here goes – another BCP acronym …

I have been stating for a while now, that the BCP Methodology needs to be revisited.  I think that the tried and true practice of conducting BIAs is a bit flawed.  In practice, I think, the methodology attacks middle management and department level areas in the organization without first establishing corporate-wide and senior level objectives for business during a crisis.  When we ask people to establish RTOs and RPOs (more of those lovely acronyms – see the chart below) what are they basing their answers on?  When we ask for impacts of being down, to set those recovery objectives, what business objectives are they being designed to meet?

I think that the BCP Methodology needs to add a step in the beginning of our analyses in which we establish – are you ready for it, here it comes, the new acronym, in three, two, one – our ABOs, Adjusted Business Objectives.  I think part of the fallacy in our current process is that RTOs (or MADs if you prefer that acronym) are set with the assumption that the company is still aiming to hit its established business objectives for the year.  And, I think that is wrong.  During times of crisis, I think management’s expectations of what the company should achieve are adjusted.  During times of crisis, we may not have the same Income Targets, Profit Targets, Sales Targets, Margin Targets, Production Targets, etc.

Every company establishes business objectives for the year – assuming we operate in a normal business environment.  Once that “normal” environment is compromised due to a disaster, I think those business objectives get adjusted.  And, I think it is important to relay that information to the management team that is responding to our BIA questions.  We should be asking what the critical timeframes are for conducting business functions given we need to meet these Adjusted Business Objectives or ABOs.

Department objectives are, I hope, based on meeting the overall corporate objectives.  Once we know our ABOs we can translate that down to the department level and establish more meaningful RTOs, RPOs, MADs and what have yous.

The real challenge here is, however, getting senior management involved enough in the process to establish these ABOs.  One reason I think we don’t do that today is because it is much easier beginning the process with middle management.  The savvy manager, however, I think, is the one that asks, “During a time of crisis, what are my department’s objectives?  What is senior management expecting us to get done throughout the crisis period?”

So, there it is, a new BCP acronym – ABOs – just what we needed … NOT!

ACRONYMS USED IN THIS ARTICLE – FOR THE UNINITIATED

BCP – Business Continuity Planning

BIA – Business Impact Analysis

RTO – Recovery Time Objectives

RPO – Recovery Point Objectives

MAD – Maximum Acceptable Downtime

 

Business Objectives vs Business Continuity Objectives – The Missing Step

This blog article talks about a step in the Business Continuity Planning (BCP) Methodology that I think is missing – and, I happen to think it is a pretty important step.

One of the greatest challenges in the BCP methodology is in establishing the program’s recovery objectives.  Whether you label them as Maximum Acceptable Downtime (MAD); Recovery Time and Recovery Point Objectives (RTO & RPO); or some other creative anagram unique to your process, these program benchmarks are usually arrived at through a Business Impact Analysis (BIA) process or, at least, through some survey/interview with business managers and subject matter experts to establish what the critical business processes are; what timeframes they must be recovered; and what resources must be available in certain timeframes to enable our continuity or recovery of those processes.  Does this sound familiar?  I’m I right, so far?

But – you knew there was going to be a but – to achieve what end?  I mean, we do a great job defining business continuity objectives, but do we do so against established business objectives?

I always thought that the savvy business manager, when asked to complete a BIA questionnaire would ask the question, “What is Senior Management expecting me to achieve during the business interruption period?”  Sometimes, I think, we get close.  Many times I hear business continuity planning professionals say that the objective is to “survive” the disaster or “keep the company solvent”.  But do we ever define what that means – in business objective terms?

So, forget about operating in disaster situations for a second.  Just think about business as usual objectives.  Most every company and most every department within each company has established business or performance objectives.  There are defined revenue targets, income objectives, margin targets, production objectives, etc.  There are expected number of widgets to produce per week; sales targets; number of calls handled per hour; items sold; and so on and so on.

What I would want to know, if I were the business manager being asked what my critical processes are and how long can we go without performing those processes, is:  What adjustments are being made to my performance objectives during this incident you are asking me to plan for?  Am I expected to still achieve my revenue target, sales target, income target, margin targets?  Am I still being measured against growth?  How many widgets per day am I expected to still crank out?  If you can tell me what my management is expecting me to produce during this contingency period, I can then tell you what I need to do, when I need to do it and what I need to get it done.

Seems to me, we miss that step.  We make middle management guess at what our business targets are.  And, furthermore, we never ensure that their guesses are consistent with one another.  Each individual manager who completes the BIA makes their own assumptions about what the overall business objectives are during a business interruption event.  Seems a bit risky to me.

I understand why and how this happens.  It is primarily because middle management is more accessible in our planning process.  It is much easier to include middle management in the planning process, feed them the BIA questions and get them to assign MADs, RTOs and RPOs than it is to include Senior Management in the process.  But – there’s that damn word again – how can we really define viable business continuity objectives if we don’t first know our business objectives during time of an event?

I wonder what would happen if we tried?  I wonder … what if you posed that question to upper management?  What if we added that step in our BCP Methodology:  Define adjusted business objectives that must be achieved during a serious business interruption event.  IN BUSINESS TERMS – not in BCP terms.  Interesting.

Anyway, just a thought.  What do you think?

The Business Impact Analysis (BIA)

I know this is a well known concept and BIAs are part of almost every Business Continuity Program, but I happen to think that many, if not most, people get this wrong – just a little.

Many practitioners, in my way of thinking, overcomplicate or overextend what the BIA is supposed to include and result in.  In many instances, the BIA is performed to establish the equally well known recovery objectives, the Recovery Time Objective (RTO) and Recovery Point Objective (RPO).

One of the issues that I have is what the RTO measures – is it the recovery time objective for a business process or the recovery time objective for an application or IT infrastructure?  Often, people use it for both and I think that can confuse things.  The RTO grew up as a disaster recovery, implying technology recovery, measurement and I think that is where it should stay.  The BIA, by definition does not measure technology recovery objectives it measures exactly what the words say – business objectives.

So let’s back up a bit.  What does (should) the BIA do for us?

The BIA measures and records the “impact” on an organization should a “business” process cease to operate.

The BIA answers questions such as:

What is the impact to our company if we cannot settle trades?  Or, what is the impact if we cannot provide customer service?  Or, if we cannot sell tickets.  Or, if we cannot pick raw materials from our inventory warehouse? …

The BIA measures the impact on WHAT you do, not HOW you do it.  The HOW questions come later in the methodology.  Most companies are not in the business of running computers.  They are in the business of providing financial services, or selling insurance, or flying airplanes, or making consumer goods, …  Now, most also rely on technology and business applications to support what they do but these tools are recovery requirements and are looked at downstream in our analysis.

Once we know the impacts of not performing discreet business processes, we can determine how long the company can survive before these impacts become so severe that they jeopardize the solvency of the organization or pass some other pre-established pain threshold.  To avoid confusion with RTOs, I like to call this the Maximum Acceptable Downtime – now you may say I am MAD, but that’s the result of my BIAs.

And that ends the Business Impact Analysis.

Now, focusing on those business processes with the most demanding MADs we can start looking at how we perform those processes; start analyzing the required technology to support those processes; and, start assigning RTOs and RPOs.  This, we might call our Technology Impact Analysis, although I don’t see too many people using that term.

Many times, MADs and RTOs for applications that support that business process are equal, but, then again, many times they are not.

For example:

In conducting a BIA, a trading company may discover that they must be able to execute a commodity trade within 4 hours of a business interruption, i.e. the MAD = 4 hrs.

In defining how they trade commodities, they identify the Commodity Trading Platform (CTP) as an application that supports this activity.  However, in evaluating contingencies, they decide that they could actually execute trades manually, by filling out a manual trade blotter, like the old days, and enter them into the system within 24 hours of the trade.  So, as long as they have a telephone and a pad of paper they can, with great inconvenience, execute trades.  So, the RTO for the phones might be 4 Hrs, but the RTO for the supporting application, the Commodity Trading Platform is 24 Hrs.

Now, if you want to argue that you get that, but in order to not keep going back to your business partners over and over again in the planning process you collect BIA, Recovery Requirements and Technology Objectives information all in the same interview, I can accept that.  But, I think it is important to differentiate the results of the BIA, business process MADs, from the results of the Recovery Requirements Analysis and subsequent disaster recovery requirements.

Even though most planning professionals preach that there is a difference between business continuity and disaster recovery, I think that the distinction often gets blurred in the execution of our methodology.

Just one man’s opinion, for what it is worth.