Fourth Of Businesses Unprepared For Disasters

Nearly one in four American businesses risk it all by not having a disaster plan in place

August 18, 2004

3 Min Read
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Three years after 9/11, a year after a major blackout nailed the Northeast, and just days after a major hurricane devastated sections of west Florida, nearly one in four American businesses are still risking it all by not having a disaster plan in place, a study released Wednesday said.

The study, which was done by the non-profit Partnership for Public Warning in conjunction with AT&T, surveyed 1,000 executives from ten of the country's major metro areas, including New York, Washington, Los Angeles, Chicago, and Miami.

A quarter of the businesses in New York City and Washington, D.C., the two targets of the 9/11 attacks, and the former now on selected alert against terrorist attacks, lack a plan. But at least they're more prepared than firms in earthquake-prone Los Angeles: there, 30 percent of companies work without a plan.

"None of this was really a surprise," said Ken Allen, the executive director of Partnership for Public Warning. "It was perhaps a disappointment, but it only confirmed what we expected: too many businesses are unprepared."

Businesses in Florida are the most prepared, said Allen, with only 15 percent of the firms surveyed there operating without a business continuity plan. More Florida companies tend to be ready for the worst, Allen went on to say, because of their constant exposure to hurricanes."But even in Florida, news reports of thousands laid off after Hurricane Charley because their employers didn't have a plan in place is distressing," Allen noted.

"A business continuity plan is like an insurance policy. You don't think about it until you need it. And then it's too late."

And even a calamity isn't always enough to get the idea into people's heads that a plan is necessary. Although about one in five businesses said they'd suffered a disaster in the last 12 months that caused disruption, 75 percent of those that had been hit didn't bother to improve their plan, or even create one if they didn't have one before.

The study also uncovered other bad habits among those businesses. Nationally, nearly 25 percent of disaster plans haven't been updated in the last year, and more than 40 percent haven't been tested during that time.

"It's critical for companies to make sure their plans are up to date and reflect the latest threats," said Allen. "A company can have a great plan, but unless it's relevant, it's of little value." Still, he said, it's no contest between not having a plan and having an outdated one. "With the latter, at least someone has been thinking about it," he said.Companies in New York tended to test and update their continuity plans much more frequently than enterprises elsewhere. Nearly 90 percent of New York companies have updated their plans, and almost 80 percent have tested them in the last 12 months. "That's probably because of the continuing threat levels there," said Allen, but it also could be because of the fresh memory of last summer's blackout.

On the IT side, 40 percent of companies surveyed admitted that they're skating on thin ice by not having redundant servers and/or backup sites.

The apathy is understandable, said Allen, if distressing. "Time goes by and you forget about [things like 9/11] and the press of business intervenes."

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