Kalpesh Shah (name changed), the managing director of a mutual fund organisation at Nariman Point-Mumbai, says he continued working during the Mumbai terror attacks which took place last December. This despite the fact that Nariman Point was cordoned off for a few days. Shah attributes this to his company's 'workplace recovery strategy', wherein the core team was able to operate from a different location.
The principal function of a commercial workplace recovery service is to provide an alternate processing site in the event of equipment or infrastructure failures. The staff of a call centre or back office processing company, for instance, can be shifted to an alternate site and be fully functional within 3–4 hours with minimal disruptions to the business processing at hand.
The recovery centre not only provides data back-up, connectivity and secured networks, but also provides the front-end requirement of a company, which includes basic infrastructure like desktops, laptops, telephones and safety and security equipment that any firm might require.
Workplace recovery is a part of the Business Continuity Programme (BCP). While disaster recovery takes care of the IT part of the business (availability of data and uptime), workplace recovery takes care of the people aspect. Unavailability of the right people during business disruption is considered to be a biggest vulnerability of the overall BCP programme.
A recent survey conducted by Business Continuity Management Institute (BCMI), among the Indian corporates, revealed that on an average in the last year alone (2008), more than 50 per cent of the total respondents reported at least two significant business disruptions with the average loss per disruption being to the tune of Rs 20 crore. Significantly higher from the previous year, Rs 7.7 crore, which is an increase of nearly 200 per cent.
However, despite the fact that India is a leading player in the outsourcing industry, there are just three players that cater to this segment. These are IBM, which inaugurated its first centre in India in early 2008, followed by Mumbai based IT firm Omnitech Infosolutions and a recent entrant, Falcon Disaster Recovery (FDR) Services.
Till a few years back, many organisations would manage these operations in-house, says industry analysts. But with operations increasing and real estate costs rising, many companies are re-evaluating their strategy. Jehangir Pathanki, founder and chief executive officer of FDR claims that a third party player can bring down the cost for a firm by at least one-eighth of investments they make.
“Many firms have invested in setting up locations in multiple centres. But the overall cost pressure especially the lease rentals as well as the investment in setting up a centre that can provide exact working environment is huge. Compliance is the other reason that is driving third party vendor market,” said Atul Himani, Managing Director, Omnitech Infosolutions. The company’s first centre in Navi Mumbai is already booked 65 per cent and it is now planning to set up its second centre in Hyderabad.
Chandrashekar Balasubramanium, Country Manager - Infrastructure Risk Management Services, IBM India /South Asia said that up to 60 per cent of revenue can be impacted due to downturns in business. “A 5,000 employee enterprise would suffer a productivity loss of around Rs 5 crore as a result of a three-day workforce disruption,” he added.
IBM has signed up four customers since it launched its work area recovery centre in Navi Mumbai in January 2008. Balasubramanium further added: “During the recent terror attacks some of the customer did activate their off-sites. During the 9/11 attack close to 50 per cent of the business within that area were impacted as this aspect was not taken into consideration when designing the BCP.”
Pathanki, says these are some of the reasons for that the shared workplace recovery sites has seen an increased acceptance in India. Under this an alternate facility--with all the necessary features like redundancy, network, computing power etc--is prepared. Since a particular site is shared the cost are minimised by sharing the same seat with several firms.
“But we cannot sign on too many firms from the same area. For instance, we cannot have five clients from Bandra-Kurla area. Because if there is some problem in that area then everyone would come into that centre. At a time we might take just one customer from one area. Our centre at Navi Mumbai has 240 seats. At any time we can support eight customers in the syndicated mode,” said Pathanki. FDR already has two clients from the BPO sector and is close to sign two more deals.
Pathanki says that in the recent past he has seen an uptake among the corporates for these services. The company has close to six clients visit every week. To keep up with the demand FDR plans to set up seven more centres over a period of time. Pathanki said that they will try and have centres in at least two cities in each region of India.
The current opportunity for providing disaster recovery seats in India is around 45,000 seats which is expected to grow to to 150,000 seats by 2010. In terms of value analysts peg the work area opportunity globally to be a $1 billion by 2011. Kunal Pande, director advisory services KPMG says: “The adoption of workplace recovery shows the maturity curve that the Indian firms have reached. In recent times, we have seen number of cases when organisations have had to activate their off-site centres.”
