When corporations' disaster planners get together, the talk naturally turns to disasters.
They talk about the large East Coast bank that recently was forced to borrow--at a stiff premium--about $1 billion from the Federal Reserve Bank after a computer snafu froze the bank's own money supply for 12 hours.
Or, they talk about the 1972 earthquake in Managua, Nicaragua, that reduced one soft-drink bottling plant to rubble but left another bottler standing.
Then there was the nearly 50,000 gallons of water that--along with the roof and an air-conditioning system--crashed down on Mazda Motors of America's computer complex in Compton during a February, 1983, rainstorm. Amazingly, within five working days, Mazda had constructed a new computer building and installed a new computer to serve its 500 dealers in 31 states.
That rapid response was in contrast to what happened in 1959 when fire destroyed a Pentagon computer center. Even though officials used the full power of the Defense Department to obtain high priority with suppliers, they had no disaster plan, so it took 30 days to rebuild the facility.
That fire showed military data-processing managers--and their corporate counterparts--that "guns, guards, locks and dogs don't work" when it comes to protecting computer records from destruction, according to Laurence B. Compton, who spent nearly 20 years devising computer security plans for the Strategic Air Command and the Air Force Military Personnel Center.
Despite the continuing threat of fires, earthquakes, floods and man-made disasters, only 15% of the nation's companies have created emergency recovery plans, according to Diane C. Smith, manager of contingency planning for FCA Computer Services, a subsidiary of American Savings & Loan and co-founder of the Assn. of Contingency Planners, based in Long Beach.
However, because corporate dependence upon computers has grown so rapidly, "most companies can operate for roughly one week without their data center before they go under," Compton said. Now a vice president of Total Assets Protection, an Arlington, Tex., company that develops disaster recovery programs for corporations, he added: "Some banks and insurance companies say they can't operate after just 2 1/2 days."
In addition to cash flow problems, when a center stops computing, "the backlog of work becomes so large that you can't keep up," Compton said.
Disaster planning is important because 70% of businesses that "sustain a significant interruption . . . go under," according to Barbara Foster, a former Marin County disaster planner who now serves as a private consultant for the American Red Cross' Marin County Private Sector Disaster Preparedness Project.
In California, corporate interest in disaster recovery programs has been heightened because "we've had more magnitude-six earthquakes during the past six years than in the prior two decades," according to James Watkins, a state official with the Office of Emergency Services.
That growing interest has prompted an increase in the number of backup computer facilities operated by third-party companies that assist corporations with disaster preparedness.
'Hot' and 'Cold' Rooms
Sunguard Data Systems of Wayne, Pa., recently announced plans for a computer backup facility in the Rancho Bernardo area of San Diego, and Comdisco Disaster Recovery Services of Chicago said it planned a similar facility in Cypress. Those facilities--which include completely equipped "hot" computer rooms and empty "cold" rooms--appeal to corporations that do not want to create and maintain their own disaster recovery facilities.
For a fee (one disaster preparedness expert suggested that "hot sites" generally charge an initial subscription fee of between $5,000 and $18,000, a one-time pre-use fee of $25,000 and a $4,000 to $10,000 daily operating fee), a customer can move its staff in and use the center until a backup system is built.
Pennsylvania Life Insurance of Santa Monica, a member of American Can Co.'s financial services division, has constructed a recovery plan that "will let us recover (critical) data processing in five business days," according to Bill Homan, a vice president and director of the company's data center.
Pennsylvania Life's recovery plan is based on the assumption that it will remain in business because its "critical" computer functions--including billing, claims processing and the writing of new policies--will be resumed within that five-day period at a "hot" computer site owned by Sunguard.
Surprisingly, since 1979, none of Sunguard's 278 clients has ever experienced a full-fledged disaster. And only four of Comdisco's 560 clients (including one disaster caused by a frozen water line and another generated by a fire related to a Santa Ana wind condition) have had to rebuild critical computer functions at a Comdisco site.
That does not mean that disasters do not happen, however.