How Much Does Disaster Recovery Cost?

Good disaster recovery may be what saves an enterprise from extinction. But disaster recovery planning and preparation has a cost in terms of time, effort and money. Senior management knows that a company will need to make an investment in order to build the robustness to survive an IT catastrophe. Now it wants to know how much that investment will be; not just to understand impacts on profitability, but also to be able to plan it appropriately to gain optimal protection with expenditure that can be controlled or phased over time.

There are two main ways to set about budgeting for a given expense. The first is use the last set of budget calculations and then factor in changes such as new or discontinued items and inflation. The second is to do the complete budget from the ground up (zero-based budgeting). Each method has its pros and cons. Whichever solution you choose, a good way to start is often to map out the major expenses including IT systems maintenance, specific DR items such as cloud storage or purpose-designed recovery solutions, utilities/power, and staff salaries. Additional expenses might then be rent, travel and third party assistance. Industry benchmarks where available can help to judge the realism of a budget, as can information about industry DR trends.

Next comes the question of who will pay for disaster recovery. The company as a whole pays for its own DR of course. However, the cost may be divided up among different departments according to their current use of IT resources and their DR needs (not everybody needs split-second data recovery). If your company is already running its IT department as a profit centre by billing groups according to usage, it may well make sense to finance DR in the same way. However, it is also important to maintain an overall perspective on DR expenditure to make sure that opportunities to leverage DR over several groups can be taken, thus lowering total costs and individual departmental contributions.

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