S.L. Bhattacharya, Chief Technology Officer, Daksh: Ready with fail-proof back-ups

Last week at the Chennai-based cognizant Technologies, it was 'disaster time'. All the systems had crashed, the telephone lines went dead, servers were destroyed, the paper files got burnt, and some key executives went missing. Suddenly, the Rs 871-crore company that caters almost exclusively to offshore clients had to figure out ways to get back on its feet within hours. That meant rebuilding all the infrastructure-computers, servers, telephone lines-and making up for the missing executives. Impossible? May be, may be not. But that's the scenario Cognizant-recently ranked No. 7 on BusinessWeek's list of hot growth companies-likes to simulate when it carries out drills to test its preparedness in the event of a disaster, ranging from a war to an earthquake to bombing to plain disruption in communications facilities.

The war clouds over the subcontinent may be receding, but this is the age of uncertainty; war isn't the only disaster that can devastate businesses. And companies, of course, can't predict when or what kind of disaster will strike. Therefore, some of the smarter ones are doing the next best thing: drawing up contingency plans. In consultant-speak that's called Business Continuity Management (BCM), and considered the next step in Disaster Recovery Planning (DRP).

Explains Sanjay Dhawan, Executive Director (Information Risk Management), KPMG: ''BCM does not limit itself to just to risks associated with unavailability of it hardware and software, but considers a holistic view of business continuity.'' That includes looking at customer, supplier, and business partner-end risks, business core process risks, and it hardware and software across geographies, and coming up with continuity plans.

No Downtime, Please

But just how BCM-friendly are Indian companies? According to a recent KPMG survey, four out of every five companies will never be able to recover should a natural or man-made disaster strike them. Yet, the need for BCM has never been greater. Companies are increasingly automating and digitising information that flows through their value chain. Suppliers, customers, and partners are spread all over the world and disruptions in communications can wreak havoc.

Then, there are companies that are creations of the IT phenomenon. Those into software and it-enabled services, for example. Sitting somewhere in India, they manage it systems, back-office work, and customer contact for transcontinental clients. But post-September 11, Gujarat, and now, the Indo-Pak tensions, overseas customers want to know how safe it is to outsource work to India. Admits Joy Nandi, CEO, Bangalore Labs: ''Because we are in the business of ensuring availability for our customers, we ourselves have to be doubly available.''

Ensuring business continuity involves investment, careful planning and execution. Daksh, a Gurgaon-based e-services company that has Amazon.com as one of its customers, has continuity plans at three levels. Level one involves issues such as transportation and power back-up, level two addresses it systems failure at its site, and level three deals with a complete failure at the site. While the first two kinds of risks are addressed through fail-proof back ups, the third-typically, the most critical-is managed by inter-linking all of Daksh's three sites in Gurgaon. Says S.L. Bhattacharya, CTO, Daksh: ''We are also building a disaster recovery centre that will ensure continuity even if all the three Gurgaon sites become unavailable.''

Similarly, Sapient India has three states of alert. In the first state, where there is high tension but no physical threat, the back-up data tapes are shipped to the US on a daily basis (as against the regular weekly shipment). In the second state, where there is a physical threat to the facility but no communications breakdown, expatriates are sent back and all non-essential travel is stalled. And in the third state, where all communication links break down, key employees are dispatched to client locations within hours and mission-critical operations shift to the hot site (a fully-equipped, plug-n-play facility). At the moment, Sapient is in the first state.

The war fear in the subcontinent is also encouraging companies to seek out 'safe' locations. Wipro and TCS are already setting up servers in Chennai, far away from Delhi and Mumbai (potential ground zero in case of a war). Sapient India has a fully-equipped facility in Bangalore that can be used as a hot site. In fact, its CEO Amit Govil has spent almost a third of his time past few weeks on BCM. Cognizant has a co-operative site arrangement with vendors in Singapore and Thailand that allows it to use their free processing facility for recovery. ''In addition,'' reveals Lakshmi Narayanan, President & coo, Cognizant, ''our key employees are visa-ready and travel-ready in case any of the 1,000-odd employees working on client sites need to return.''

What about the traditional manufacturing companies? Just how are they gearing up to cope with disasters? According to KPMG, the dependence of manufacturing companies on it is low compared to the IT and financial sectors. That explains why companies like Tata Steel are focusing more on infrastructure and logistics. The steel giant, for instance, has a fleet of aircraft including a propeller-driven aircraft Pilatus, three King Airs, a jet, and a Bell helicopter on stand-by to transport key executives. It also maintains a stockpile of key raw material in case the road and rail routes leading to its mines get blocked.

If you think that companies like Cognizant, Daksh, Sapient, or Tata Steel are being paranoid, just consider that (according to KPMG) 40 per cent of businesses that suffer a disaster go out of business within two years. If that doesn't scare you, nothing will.