Disaster recovery planning important topic since Sept. 11

Real Estate Weekly, April 24, 2002 by Scott Donnelly

Hot, warm or cool? This has become the question of the day for corporate decision-makers. But while the topic of temperature in a corporate environment might once have referred to HVAC settings, today it involves a far more serious subject -- business continuity planning (i.e. data redundancy and disaster recovery). Since Sept. 11, executives have become increasingly focused on this important component of their overall business plan. As a result, they are discovering an array of data storage and access options, including hot sites, warm sites and cool sites.

At its core, a business continuity plan ensures that, in the event that a company's main office is damaged or destroyed, its information is retrievable. This essentially allows businesses to continue their operation at another location, if necessary. While the concept is simple, the creation of a business continuity plan can be complex, becoming more complicated as the scope of the enterprise increases. To begin the planning process, companies must determine how long they can wait to resume operations. They also need to look at what components of their business are mission-critical and which are not immediately needed in order to operate.

Most companies today perform regular data backups onto tapes and take the tapes off site. But what would happen in the event of a disaster? The media is intact, but the equipment on which the data runs has been destroyed. Unless an organization can afford to stop business entirely for days, weeks or perhaps even a month, its executives should consider investing in the creation of a customized business continuity plan.

Following is an overview of available data storage options. When properly combined, they can yield a plan that balances data access needs with budget limitations. The industry has developed varying definitions of hot, warm and cool sites. In general, the hot site is the most sophisticated -- and expensive -- type of data replication routine. Data is replicated on two separate servers - one in the operational location and one housed at a different physical site. Transactions are updated on both systems simultaneously.

Literally, if a company is shut down, it can immediately operate from the hot site server. Many financial institutions and Wall Street firms employ this type of high-end solution, which requires the costly purchase of duplicate equipment and expenditure on a significant amount of ongoing maintenance. For most small- to mid-size companies, however, it presents a financially impractical approach and is overkill, given the transaction loads and real-time constraints of the business.

A warm site provides many of the same benefits, but the data is not refreshed as often. Generally, the data replication routine can occur anywhere from once every 24 hours to once a week. The data transfer often takes place through a high-speed data connection. In the event of a disaster, the warm site would provide day-old data. While this does present some disadvantages, it also provides significant savings in terms of data synchronization management and systems maintenance.

Cool sites provide a third alternative and one that makes sense for companies that do not have the funds to purchase duplicate machines, rent additional space and hire consultants to assist in the formation of routines. Cool sites are offsite facilities that operate on a service bureau model, offering shared hardware, infrastructure and consulting resources. Customers send data either on tape, via the Internet, or point-to-point communication lines. The cool site provides the replicate machines, operating systems and applications required for effective disaster recovery at significant cost savings.

In most cases, optimized disaster recovery plans in-dude a combination of hot and warm, or hot, warm and cool sites. For example, one of the IBS users for which we are currently developing a multi-thronged business continuity plan has more than 100 employees and uses a network environment for all of its documents, spreadsheets and correspondence. In addition to the IBS accounting and property management system, it also runs a number of third-party CAD and architectural software products.

As is the case for most high-end real estate companies, this client requires a working accounting system in order to conduct business on any level. The company must be able to produce invoicing, look up accounts, access sales records and pay vendors without interruption. This mission-critical data must be hot.

On the other hand, while this client's network information and email are critical, the data needs only to be warm -- not hot. Its employees could function without the most up-to-date information. The cost savings involved in periodically refreshing the backup data out-weigh the potential inconveniences.

Because this client is a real estate owner with multiple buildings in its portfolio, maintaining a remote location in which to conduct business does not produce financial hardship. As a result, its disaster recovery plan includes only hot and warm sites. For other clients seeking cool sites for backup, IRS has set up machines in our facility that can house full copies of their company data.