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title: "Why do I need a Disaster Recovery Contingency Plan?"
canonical: "https://kb.myframeworks.com.au/space/PROSTIXV48DOC/31097623/Why%20do%20I%20need%20a%20Disaster%20Recovery%20Contingency%20Plan%3F"
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Business Interruption Risk Assessment  Many business owners are too busy running the day-to-day operations of the company to give a lot of thought to disaster recovery planning. This is a shame because with today's technology, automating backup processes is cheap and easy.  It is typical for senior management to become concerned with disaster recovery only after such an occurrence has happened. It is too late to plan an effective response after a disaster has struck and significant downtime has been incurred. Disaster can have serious effects on the viability of a firm's operations, profitability, quality of service, and convenience. Ask yourself what kind of shape your business would be in if you were to lose access to your data - customer records, accounts receivable, inventory file, contract pricing and the software you use to run your business.  A recent article by the American National Archives and Records Administration contains the frightening statistic that 93% of companies that lost their data for ten days or more declared bankruptcy within a year. According to the same article, 50% of those businesses filed for bankruptcy immediately.  A survey of disasters showed that a combination of hardware, power and communications failures accounted for over 50% of all disasters followed by fire and natural disasters at 35%. Protection against most natural disaster events cannot be eliminated practically but there is no excuse for any business not having regular, automated backups and on-line disaster recovery options to protect their data. Scenarios of concern typically encompass electrical power loss, air-conditioning failure, fire hazards, disc crashes and network failures. These events are relatively probable and significant in terms of business interruption.  Contingency planning and disaster recovery, put simply, is insurance. Having business interruption insurance coverage is not sufficient. Your policy may pay you some amount to try and recreate your records and may even reimburse you for accounts that are uncollectible as a result of the destruction of your records. All of this can be a big help, of course, but how do you go about reconstructing records if all of your data and your operating software is gone? If disaster cannot be avoided, it is vital that effective measures are taken to limit losses and ensure recovery is as quick and complete as possible.