| Introduction | | | | Porter's Value Chain, all activities within the |
| Most companies fail to prepare for events that | | | | organization can be categorized as a primary or |
| threaten their revenue stream. 43% of | | | | supporting activity. When a company's activities |
| businesses that suffer a catastrophic event fail to | | | | are viewed with this framework it is easier to |
| restore operations following the event with an | | | | then overlay the DRII framework for business |
| additional 29% that fail within two years. (end | | | | continuity. |
| note 1) Given this high rate of failure, one would | | | | A Simple Example |
| assume that every business take the time to | | | | Consulting on the development of a disaster |
| prepare for such an event, however only 32% of | | | | recovery plan for a small New Hampshire |
| businesses have plans of any sort in place. This | | | | company, it was clear that an approach broader |
| lack of action is in part due to the complexity of | | | | than disaster recovery was required. Our |
| addressing all critical business functions. Challenges | | | | assessment was that the company needed a |
| to any Business Continuity Plan exist in creating a | | | | business continuity plan of which disaster |
| clear view of business processes and | | | | recovery would be a component. The company |
| appropriately assessing risks to the organization. | | | | generated revenue from several streams, |
| These steps are paramount in properly developing | | | | computer data sanitization, component recycling, |
| risk elimination, mitigation and trans-event | | | | and used parts sales. Each revenue stream has a |
| strategies and procedures to ensure the business | | | | distinct sales and shipment pattern and is |
| continues through any event on the threat | | | | significant for the company. The first impulse was |
| spectrum. By combining two models, Michael | | | | to understand and organize what threat scenario |
| Porter's Value Chain and Disaster Recovery | | | | would affect each revenue stream. As written |
| Institute International's Business Continuity model, | | | | above, analysis at this level can become |
| it is possible to simplify both the threat analysis, | | | | overwhelming quickly. As an example, to simplify |
| and continuity strategy for a given event. | | | | analysis we categorized the revenue generating |
| Porter's Value Chain | | | | activities in accordance with Porter's model. This |
| In 1985 world renowned economist, Dr. Michael | | | | enabled us to overlay threat scenarios onto each |
| Porter, published a concept he called the Value | | | | category of activity rather than attend to each |
| Chain. His concept describes the value adding | | | | individual activity. The resulting organization |
| activities of a business through the construct of | | | | simplifies the planning process down to each |
| five generic primary activities (Inbound Logistics, | | | | activity in the value chain. This facilitates a |
| Operations, Outbound Logistics, Marketing and | | | | process by which steps required to rectify an |
| Sales and Service) and four generic support | | | | interruption by activity rather than by individual |
| activities (Firm Infrastructure, Human Resource | | | | threat. |
| Management, Technology and Procurement). (end | | | | Lessons learned |
| note 2) | | | | Porter's Value Chain model simplifies the |
| View of the Organization through the Value Chain | | | | identification of risks and mitigation procedures, |
| Lens | | | | trans-disaster response actions and post-disaster |
| According to the Disaster Recovery Institute | | | | restoration actions. |
| International (DRII) there are four phases of | | | | Risk identification and trans-event activities |
| business continuity: (end note 3) | | | | can be far more important than the post-disaster |
| Risk Prevention/Reduction/Mitigation | | | | clean-up. |
| Response and Management | | | | If planned and executed properly a business |
| Recovery | | | | continuity plan can nearly eliminate the need for a |
| Restoration. | | | | detailed disaster recovery plan. |
| This framework is theoretically easy to | | | | A well prepared BCP virtually ensures |
| understand but when applied against every | | | | continuous contact with vendors, employees and |
| activity of a business can be time consuming and | | | | customers and can provide for an unbroken |
| confusing. By incorporating the organization of | | | | revenue chain. |