Examining Disasters
To find out the impact of disasters and firms' responses, Opinion Research Corporation, Princeton, N.J., studied companies with annual revenues of at least $25 million in April 2004. It conducted 1,001 telephone interviews with executives from the wholesale, retail, services, manufacturing, finance, insurance and real estate industries. Here are some findings:
1. One in five companies suffered a disaster that resulted in the organization having to cease operations for a period of time.
2. The most common disasters vary by market location. Sixty-three percent of companies in New York and 62 percent of companies in Detroit faced electrical blackouts, while 55 percent in Miami faced weather-related disasters.
3. Two of three companies that suffered a disaster lost business because of it. Only 10 percent say it cost them nothing, while 22 percent don't know how much it cost the company per day.
4. Eighty-one percent of companies that suffered a disaster have taken actions to reduce business interruptions in the future.
5. The most common changes made as result of the disaster were adding alternate power sources (25 percent), obtaining a back-up server (21 percent), developing or improving their business continuity plan (16 percent), upgrading their communications system (11 percent), improving security in general (8 percent) and improving their building (7 percent).
