Budgeting for Disaster Recovery

Strategic budgeting ensures availability of essentials in the event of a disaster

Understanding all the changes that could become an integral part of daily business operations is vital to the success of any business continuity plan.  It is important for the management team to determine the most essential elements that will enable the business to thrive in the event of a disaster.  In the end, it is strategic budgeting that will ensure the availability of all the essentials.  The best way to prepare a budget for your project is to devise it from a cost/benefit analysis.  This analysis should cover the following areas:

Initial and Ongoing Resources, Time and Effort

• Prepare for costs associated with third-party contracts.
• Calculate costs for administration, training and testing.
• Ensure the facility is up to code – inspections for wind, fire and seismic resistance.
• Consider costs for protecting the facility – smoke detectors, fire suppression systems, flood protection, an insurance policy that covers natural disasters.
• Physical security, electronic security systems.
• Prepare for costs associated with both electrical and data backups.
• Potential costs for storing critical business data offsite.
• Costs for customizing areas to protect electronics from flood waters.
• Costs for emergency kits and associated supplies.
• First aid and CPR training for staff.
• Potentially an expert to evaluate the proficiency of your natural disaster preparedness and business continuity plan.

Worst Case Scenario

• Potential staff recruitment and new hire costs.
• Replacement of software and hardware systems.
• Consider devices and technologies that will enable staff and management to communicate in the event of an emergency.
• Potential moving costs.
• Financial and operational consequences should critical functions not being able to perform.

Potential Savings

• Discount insurance premiums that may be obtained by putting a disaster recovery plan into effect.
• Enhancing system stability and availability through upgrades and security mechanisms.
• Opportunities for outsourcing critical business aspects that would otherwise prove cost-prohibitive onsite.
• Structuring environments that afford more onsite business functions.

Budget estimates for the project will vary, largely depending on whether training tools and other resources are coming from within or through an outside vendor.  When budgeting for what’s essential, things that can go wrong as well as potential benefits, you get garner a much better idea of the expenses the project will incur.


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