New York Companies Unprepared For Disaster

On the eve of the anniversary of September 11 and the blackout of 2003, nearly 25 percent of all businesses in New York have not begun to plan for business disruptions, according to a new report released today by the Partnership for Public Warning and AT&T. This makes New York, and, surprisingly, Washington, D.C., businesses among the least prepared cities in the nation, trailing South Florida by 10 points.

The report, “Disaster Planning in the Private Sector: A Post 9/11 Look at the State of Business Continuity in the US,” surveyed 100 executives from the New York area with responsibility for their organization’s business continuity planning. 

On a more positive front, however, the survey found that New York companies that have  already developed business continuity plans are more likely than other cities to update and test their plans.

But while more than 30 percent of New York companies say security and terrorist threats have made business continuity planning a priority, nearly 25 percent of those companies still don’t have a plan.

“Any business disruption in this economic environment can not only seriously harm a company’s reputation and growth rate, but cripple it for good,” said Shepcaro, “Deploying a strong business continuity plan is one of the best ways to minimize disruption from any sort of disaster.”

Shepcaro recommended New York companies start developing plans, monitor public warnings, ensure networks are protected and applications are secure, and make sure data is readily available off-site. He also advises companies to update their plans at least twice a year and test them frequently.

More than half of all companies — the highest in the nation — have updated their plans in the last six months and more than a third — only a percentage point behind the nation’s highest — have tested them in that time.

“A plan is only as effective as its tests,” said Shepcaro, “And companies with plans in New York understand that. Unfortunately, nearly a quarter of all companies still don’t have a plan in the first place.”

The renewed terror threats are not the only reason New York companies need to develop more plans; Shepcaro noted that more than 30 percent of N.Y. companies — the highest in the nation — had already suffered a shut-down and nearly 70 percent of them lost business because of it. Six companies lost as much as half a million dollars a day during their interruptions.

Ken Allen, executive director, Partnership for Public Warning, advised that all companies — regardless of their size — should take major contingencies into account, from terrorist attack to cyber attacks, from blackouts to flooding.

“This environment of constant threats needs to serve as a wake-up call to New York companies still working without a plan,” said Allen.

In the midst of frequent Department of Homeland Security warnings, Allen encouraged N.Y. companies to get their business continuity planning in full swing. 

Most companies — nearly 85 percent — took actions as a result of an interruption to reduce business interruptions in the future. More than 25 percent added alternate power sources and nearly 20 percent of N.Y. companies obtained a back-up server.

“Many companies are getting the message after they’ve already been hit,” said Shepcaro.

The study also found a growing number of companies in N.Y., even those without plans, have already put security-related measures in place. More than 85 percent of N.Y companies have or plan to establish redundant servers and/or backup, while 90 percent have or plan to implement firewalls, intrusion detection, hacker protection and/or password authentication.

Allen said one of the reasons companies cite for not developing an actual plan is because the entire process can often be difficult and time-consuming, prompting many to look for help. Nearly 50 percent of companies in N.Y. are now using or plan to use an outside service provider.

While some companies are taking business continuity very seriously, “too many are not,” warns Shepcaro.

“Because of New York’s renewed vulnerability amid new threats, companies not only need to start thinking the unthinkable, but they need to start planning for it as well.”

Source: AT&T press release.