08 November 2003

BCP's Balancing Act

Wall Street & Technology > > BCP's Balancing Act > Oct 27, 2003:

"BCP's Balancing Act
Cover Story

It seems some IT projects are so critical they should be exempt from the return-on-investment analysis that is at the core of a financial institutions' budgeting process. If such a list of projects existed, somewhere near the top would have to be business-continuity planning - the complex and costly process of ensuring that no matter an event's impact on a firm, it can resume critical operations within a reasonable period of time.

But in today's economic climate and with the overspending of the dot-com era still fresh in the minds of financial executives, there are no wish lists. BCP budgets are fully vetted and often scaled down in boardrooms across Wall Street. Thus, 'How much BCP is enough?' is best countered with the question, 'How much do you have to spend?

Morgan's two trading floors, at 745 7th Ave. and at the former Texaco headquarters in Westchester, along with its backup facilities in Jersey City and Brooklyn, fall within the range necessary to do synchronous data transfer. That means a transaction at a primary data center is replicated, or mirrored, at another location before a subsequent transaction is processed at the primary center.

Though it seems no two executives in the financial-services industry will give the same answer when asked for the distance limitations on synchronous data transfer (figures range between 30 and 100 miles), most answers average out to around 60 miles.

For some BCP planners, however, that range just isn't far enough. In fact, the first draft of an interagency white paper - originally released in September 2002 by the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency and the Securities and Exchange Commission - suggested a 200-300 mile separation between data centers. ''

How can BCP planners explain to the boss that both facilities are under back-up power due to a failure in the power grid for the whole region? The risk of losing thousands of transactions because you are backing up data in asynch mode vs. synch mode is only part of the equation here. You have to take more than this into consideration in the holistic view of your Business Continuity Management (BCM).

As this article indicates, the EMC, IBM's and Hitachi's are all working on this technology problem to eliminate the risk of using asynch mode to keep your people and operations several hundred miles apart. Nasdaq thinks that they can't wait and that the upside of having one facility in New York and one in Maryland is well worth the risk of losing a very small percentage of overall transactions.

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