Crisis Management: After the smoke clears: Few companies are ready for the worst in this violent age

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The Independent Online
THE BOMB that ripped through New York's World Trade Center threw a spotlight on a growing management concern - and a booming multi- million business.

The twin towers that were closed by the damage house hundreds of companies. More than 55,000 people work there every day. Suddenly, at 12:18pm on 26 February, their commercial activity came to an abrupt halt. One Japanese bank was reportedly losing pounds 12m for every 24 hours it was out of action.

The spate of terrorist bombings around London has shown that disasters can and do happen. The insurance company Commercial Union won plaudits last April for the way that it responded to the devastation of its St Mary Axe office block in London. Thanks to a contingency plan, the company was quickly able to resume trading.

Yet disaster planning is generally not an area in which businesses have any real expertise. It takes skill and experience even to visualise the range of catastrophes that can occur. Bombs are impossible to predict - but so are floods, fires, plumbing leaks, workmen slicing through fibre optic cables, even earthquakes.

Even more skill is required in drawing up appropriate contingency plans. Having a plan is one thing - having an assurance that it will work is quite another. The only way to find out is to put it into practice or learn from the lessons of others that have. There are about a dozen companies in the UK which provide disaster recovery services. Names include computer manufacturers such as IBM, as well as specialist companies such as SafetyNet and Datashield.

Commercial Union is itself a player, through its subsidiary Commercial Union Risk Management - the April bombing providing a rare and public example of a company having to practise what it preaches. It has subsequently reported an increase in enquiries about its risk management services. 'Major organisations, particularly banks and building societies, are taking this very seriously,' said a company official.

Disaster recovery companies offer a wide range of services. Basic consultancy is the first step: what can happen - and what can be done about it? Preparation of a contingency plan comes next and this can cost up to pounds 150,000, with additional fees for annual updates.

But the heart of a business lies in the computers and offices where transactions are processed. If these are unavailable, back-up capacity is required, which is where the real advantage of using a specialist lies. As with insurance, costs fall when reserve resources and risks can be shared.

Comdisco Disaster Recovery Services is the largest 'business continuity provider' in the world, according to John Ratliff, who heads its European marketing arm.

'In terms of work area,' he said, 'the World Trade Center bombing launched the largest single-end user recovery in the history of the industry.' The company received seven simultaneous call-outs immediately after the explosion, and now has 600 employees from the World Trade Center working in its New Jersey recovery centre.

Yet, says Alan Stanley of Coopers & Lybrand, despite the disaster recovery industry's growing by 30 per cent a year, many businesses are still unprepared. Mr Stanley heads the European Security Forum, a Coopers & Lybrand-led computer security research institute with more than 50 sponsoring businesses, including British Airways, Ford, Barclays and British Aerospace.

In a 1992 survey, only 48 per cent of member organisations had written contingency plans - although this was up from 36 per cent two years previously.

But awareness is growing. At a recent meeting, members were shown a video of the interior of the CU offices at St Mary Axe the morning after the bombing. Shaken by what they had seen, many asked for a copy to take away.

(Photograph omitted)

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