ONE of the questions which I frequently ask of the organisations with which I am associated is “what is the disaster strategy for the business?”. In other words, how to deal with what may be a situation that threatens the continuing viability of that organisation.

Not an unreasonable question at any time but one which has been brought into focus following the debacle at National Westminster.

During my tenure as chief executive of the Newcastle Building Society, I invested heavily in a second computer system. A “hot site”, remote from the head office, which was an exact duplicate of the system used for the day-to-day running of the business. Updated to the close of business the previous day, it ensured that any problems would not prevent the smooth running of the business or, more importantly, customer service and confidence.

Perhaps the Newcastle was not as large as Nat West but, nevertheless, a multi-branched building society, estate agency, insurance brokerage, house building company, an offshore bank in Gibraltar, and a third-party processing operation were protected against the unexpected, with the additional benefit that any software updates could be tested off-line – preventing any hiccups. Certainly a somewhat costly operation but, an important protection of the business. Far too many businesses simply do not plan for the unknown. It is expensive, it is time-consuming and it becomes “tomorrow’s issue”.

What the real reason for Nat West’s problem were will no doubt be the cause of much debate. Whether it is was lack of investment in systems will only be something which they can answer but, out of the chaos, they may have done businesses a service in highlighting just how easy it is to jeopardise the continuity of the company. So, hopefully, the question of disaster planning will be high on the agenda of most boards in the near future. Not just to confirm that such a strategy is in place but also to review what exists. Regular updates are essential, while many businesses do address this issue, far too many do not. I have often heard that IT systems are backed by discs stored in the same building, hardly good planning.

Third-party businesses often offer a solution to small businesses, and disaster planning is about much more than computer operations. Staff cover, supply chain difficulties, interruption of building occupation are all examples of the dangers to continuity of an operation. A solution for many is to use the “professionals”, but one question that must be asked of any third-party business selling such planning is “what is their disaster strategy?”. Your business may be only as sound as theirs!