Information Technology Business Continuity

Information Technology Business Continuity

Vincenzo Morabito (Bocconi University, Italy) and Gianluigi Viscusi (University of Milano, Italy)
DOI: 10.4018/978-1-60566-026-4.ch316
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Abstract

Continuity could be and should be strategic for the business competitive advantage. Besides natural disaster, from blackout to tsunami, businesses face in daily activities critical challenges in IT management for assuring business continuity; for example, business continuity management results must be strategic, because of the infrastructural, organizational, and information systems changes that are required to assure compliance with regulatory norms (see, e.g., the impact of Basel II norms in financial sector), or must have and maintain a time-to-market advantage (disasters can facilitate competitors in a first mover perspective). Nevertheless, business continuity is at present often synonymous with risk management at the IT level, disaster recovery at the hardware level, or in the best case?at the data management level?with data quality management. These perspectives fail to unveil the strategic value of IT business continuity as a framework assuring alignment of strategy, organization, and systems, allowing a competitive advantage in a dynamic competitive environment. Moreover, even when business continuity, under these perspectives, has become one of the most important issues in IT management, there still appears to be some discrepancy as to the formal definitions of what precisely constitutes a disaster, and there are difficulties in assessing the size of claims in the crises and disaster areas. Taking these issues into account, we propose: (a) an analysis of the different facets of the concept of business continuity, and (b) an integrated framework for strategic management of IT business continuity. To these ends, we move from the finance sector?a sector in which the development of information technology (IT) and information systems (IS) have had a key impact upon competitiveness. Indeed, banking industry IT and IS are considered “production,” not “support” technologies. The evolution of IT and IS has challenged the traditional ways of conducting business within the finance sector. These changes have largely represented improvements to business processes and efficiency but are not without their flaws, in as much as business disruption can occur due to IT and IS sources. The greater complexity of new IT and IS operating environments requires that organizations continually reassess how best they may face changes and exploit these later for organizational advantage. As such, IT and IS have supported massive changes in the ways in which business is conducted with consumers at the retail level. Innovations in direct banking would have been unthinkable without appropriate IS, and merger and acquisition (M&A) initiatives represent the ideal domain to show what value can lead strategic management of IT business continuity. Taking these issues into account, we point out the relevance of continuity for maintaining customers, and time-to-market in complex and evolutionary competitive environments. Due the relevance of IT to maintain a valueadded continuity, our contribution aims to clarify the concept of IT business continuity, providing a framework, exploiting the different facets that it encompasses, and showing the strategic implications to the field of IS&T.
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Introduction

Continuity could be and should be strategic for the business competitive advantage. Besides natural disaster, from blackout to tsunami, businesses face in daily activities critical challenges in IT management for assuring business continuity; for example, business continuity management results must be strategic, because of the infrastructural, organizational, and information systems changes that are required to assure compliance with regulatory norms (see, e.g., the impact of Basel II norms in financial sector), or must have and maintain a time-to-market advantage (disasters can facilitate competitors in a first mover perspective). Nevertheless, business continuity is at present often synonymous with risk management at the IT level, disaster recovery at the hardware level, or in the best case—at the data management level—with data quality management. These perspectives fail to unveil the strategic value of IT business continuity as a framework assuring alignment of strategy, organization, and systems, allowing a competitive advantage in a dynamic competitive environment. Moreover, even when business continuity, under these perspectives, has become one of the most important issues in IT management, there still appears to be some discrepancy as to the formal definitions of what precisely constitutes a disaster, and there are difficulties in assessing the size of claims in the crises and disaster areas. Taking these issues into account, we propose: (a) an analysis of the different facets of the concept of business continuity, and (b) an integrated framework for strategic management of IT business continuity. To these ends, we move from the finance sector—a sector in which the development of information technology (IT) and information systems (IS) have had a key impact upon competitiveness. Indeed, banking industry IT and IS are considered “production,” not “support” technologies. The evolution of IT and IS has challenged the traditional ways of conducting business within the finance sector. These changes have largely represented improvements to business processes and efficiency but are not without their flaws, in as much as business disruption can occur due to IT and IS sources. The greater complexity of new IT and IS operating environments requires that organizations continually reassess how best they may face changes and exploit these later for organizational advantage. As such, IT and IS have supported massive changes in the ways in which business is conducted with consumers at the retail level. Innovations in direct banking would have been unthinkable without appropriate IS, and merger and acquisition (M&A) initiatives represent the ideal domain to show what value can lead strategic management of IT business continuity. Taking these issues into account, we point out the relevance of continuity for maintaining customers, and time-to-market in complex and evolutionary competitive environments. Due the relevance of IT to maintain a value-added continuity, our contribution aims to clarify the concept of IT business continuity, providing a framework, exploiting the different facets that it encompasses, and showing the strategic implications to the field of IS&T.

Key Terms in this Chapter

IT Business Continuity: The ability of an organization to provide service and support for its customers, and maintain its viability before, during, and after a business continuity event (Disaster Recovery Journal & DRI, 2007) through the leverage of IT resources.

Crisis: A critical event, which, if not handled in an appropriate manner, may dramatically impact an organization’s profitability, reputation, or ability to operate. Or, an occurrence and/or perception that threatens the operations, staff, shareholder value, stakeholders, brand, reputation, trust, and/or strategic/business goals of an organization (Disaster Recovery Journal & DRI, 2007).

Disaster: An incident that leads to the formal invocation of contingency/continuity plans, or any incident that leads to a loss of revenue; indeed, a disaster is any accidental, natural, or malicious event that threatens or interrupts normal operations or services, causing the failure of the enterprise (Disaster Recovery Journal & DRI, 2007).

Recovery Time Objective (RTO): The period of time within which systems, applications, or functions must be recovered after an outage (e.g., one business day). RTOs are often used as the basis for the development of recovery strategies, and as a determinant as to whether or not to implement the recovery strategies during a disaster situation (Disaster Recovery Journal & DRI, 2007). RTO considers how long it takes to resume a standard or regular situation.

IT-Business Continuity Approach: A framework of disciplines, processes, and techniques aiming to provide continuous operation for “essential business functions” under all circumstances.

Business Continuity Planning (BCP): “A collection of procedures and information [that have been] developed, compiled and maintained [and are] ready to use?in the event of an emergency or disaster” (Elliott & Swartz, 1999).

Recovery Point Objective (RPO): The maximum amount of data loss an organization can sustain during an event (Disaster Recovery Journal & DRI, 2007). RPO deals with how far in the past you have to go to resume a consistent situation.

Disaster Recovery Plan (DRP): A plan that establishes technical and organizational measures in order to face events or incidents with potentially huge impact that could even lead to the unavailability of data centers. The DRP development defines and ensures IT emergency procedures that intervene and protect the data relevant for the company activities and services. DRP is usually considered as the only part of the BCP in banking business continuity initiatives.

Disaster Recovery: The ability of an organization to respond to a disaster or an interruption in services by implementing a disaster recovery plan to stabilize and restore the organization’s critical functions (Disaster Recovery Journal & DRI, 2007).

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