A natural disaster has one of two effects, especially where companies are concerned. Some companies are able to weather the storm – so to speak, while others are not as fortunate.
There are many attributing factors to a companies ability to survive a natural disaster. One of the reasons some companies are able to rebound is their supply chain and its ability to cope under pressure.
An important component of the supply chain is the Supporting IT systems, which need to be able to respond to negative events and keep going, and if they can’t, the company concerned will suffer the consequences of some components or fully assembled items not reaching their destinations timeously.
A perfect example of a company’s ability to survive a natural disaster is the 2011 earthquake and resulting tsunami off the Pacific coast in Japan.
Subsequent to the event, Sony reported a first-quarter loss of the equivalent of R1.4 billion after sales fell 10% largely as a result of supply constraints caused by the earthquake. Fujitsu Panasonic, Hitachi, Nissan, Xerox and Mazda were also affected negatively, reflecting the impact on their supply chains.
IT systems have a major role to play in the resilience of any supply chain by creating continuity, typically through built-in redundancy.
Systems for companies with major supply chain dependencies generally are better if centralized. However, IT does not have to be physically located in just one place. There should be a solid fail-over or disaster recovery solution in place. That means having data and systems backed up to a separate location so that should the one location fail, you can immediately move to another one. This should, of course, be a replica of the original site, relatively far away, including seating for important workers and mirroring of critical data. The ideal is that the backup site should be sufficiently remote so as not to be affected by the event that caused the original outage.
If this is not the case, and the one is destroyed, you could be in a position of losing years of data. This could have disastrous consequences.
This applies not only to major natural disasters, but it can also affect companies with something as simple as power outages and having basic fail-over systems such as a generator. However, for any mid-range to large supply chain organization, it is strongly advised to have an external service provider to either host, or be a secondary host.
For smaller companies, we would advise that they outsource the hosting and managing of the computer centre almost entirely. Not only do you get the benefits of a more secure, safe and resilient data centre, but you should also enjoy cost benefits in the long term.