Is there an ROI in IT Disaster Recovery?

In light of recent U.S. and global catastrophes, disaster recovery (DR) and business continuity are top of mind for more and more IT professionals like you. Even CIOs are asking more questions about business continuity plans and how the IT department will respond in the event of a disaster.

According to an ITIC survey, one hour of downtime can cost over $100,000. If your company is smaller, you can be at an even greater risk. An estimated 25% of small businesses do not reopen following a major disaster. If you do not have a business continuity plan, your company can quickly become a statistic.

Imagine a natural disaster, such as a tornado, which destroys your offices and data center. The buildings can be rebuilt, but what about your company’s data? In today’s digital world, data is the lifeline of the company or organization. In fact, for most businesses, data is its most valuable asset: financial statements, the customer database, ERP systems, emails, and more. In the event of loss, data can be very difficult to rebuild — but it can be copied, stored elsewhere, and made available quickly — and the business can continue. The key is to do this before a disaster strikes.

Despite the clear and increasing risks, some companies do not implement business continuity plans due to a lack of resources and the difficulty in determining the ROI.

You can think of disaster recovery plans and solutions as a form of insurance to protect your business. Like insurance, you hope you’ll never have to use it, but you have to be protected against disasters that can happen at any moment.

As with any insurance policy, there are premiums to pay (a.k.a costs) and it is important to make a strong business case for an investment. Does it make sense for you to get a disaster recovery solution? What is the best deployment option? How does the cloud impact today’s DR solutions? How do you get your executive team to accept that insuring corporate data with a DR solution is necessary?

The best way is to demonstrate that disaster recovery is not a cost — but an investment with a positive ROI. Here is an example:

In August 2011, Hurricane Irene hit the offices of one of our customers, who subscribed to Acronis Disaster Recovery Service for $50,000 per year.

When the hurricane hit, the company lost power at its main data center for three days. The company seamlessly failed over to the Acronis Disaster Recovery Service and had the company’s servers up and running in less than two hours. During the three-day power outage, the firm remained operational and productive, generating revenue.

If this company had shut down for 3 days, it would have lost $900,000 in revenues. Instead, the company invested $50,000 in a cloud DR solution and protected $900,000 in revenue — that is an ROI of 1,700%.

Even if the same customer had the Acronis DR solution in place for 10 years before the hurricane hit, the ROI would still be 80%, equal to an annual rate of return of 10.46%.

To put the 10.46% return rate into perspective, the average annual return for the Standard & Poor’s 500 since its inception in 1928 through 2014 is approximately 10%.

What is important to note is that most everything else IT buys depreciates, but a DR solution can actually provide a positive rate of return.

IT departments seldom justify their purchases using ROI – often using operational needs, costs savings or productivity enhancements as the key arguments. However, for a cloud DR solution, an ROI analysis provides the most effective and objective argument for investment.

Remind your executive team of the worst-case scenario – without a DR solution in place, the company is at risk, especially in geographies prone to tornadoes, earthquakes, fires or floods.

If you have not yet implemented a DR plan and do not have a solution to support that plan, you should do so immediately. Use an ROI calculation to support your proposal to your management team — and remember to present it as an investment, not a pure cost.

Facing another hurricane, typhoon, tornado season, earthquake, or conflict without a DR solution in place is simply irresponsible.

For more details and instructions on how to calculate ROI for your company, check out our ROI of Disaster Recovery Whitepaper.

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