Frank Hartley • Houston
2005 Hurricanes, information breakdown
The 2005 storms cost the oil and gas industry billions, not only in structure and equipment, but in information breakdown.
Twenty-seven named storms, three Category 5 hurricanes, and $200 billion in damage from Katrina alone was the obvious tangible destruction and disruption.
“Will exploration and production data, applications and platforms be ready this year? What can we do this hurricane season to minimize operational and financial risks?” asks Dave Ferdman, CEO, CyrusOne.
Twenty-seven named storms, three Category 5 hurricanes, and $200 billion in damage from Katrina alone was the obvious tangible destruction and disruption. Ferdman explains, “But what you didn’t see on CNN were information technology leaders and staff working miracles to keep energy industry’s systems running during Katrina, Rita, and Wilma.”
Downtime and people
“A company can estimate how much IT downtime it can afford by understanding the stakes. As we all know, if a particular application or system is down there is a corresponding, financial impact,” Ferdman says. “Recognize this risk and create a spreadsheet outlaying the specific cost of IT application, internet and network downtime.”
Avoid the technology trap
“We should not forget the ‘people infrastructure’ by falling into the technology trap,” Dohsung Yum, Director of IT Enterprise for knowledge-based service assurance provider NetIQ, says. “Everybody thinks of technology, but what about the people?”
When tropical storm Alison hit, “we had the technology covered: the financial systems, customer relationship management, file servers--we were fine. But that wasn’t quite the case on the people side. The building we were in wouldn’t let us back in without power. No elevators. No phones for tech support or sales to use.”
Yum made alternative arrangements on the spot for some “people infrastructure” to get a temporary shop up and running for critical personnel, then modified his contingency plan. “When Rita came later in 2005, hardened offsite office space was in place right down to fresh coffee. IT leaders must also remember that disasters affect HR availability and reliability, plan accordingly,” Yum says.
Maintaining memory and plans
“By maintaining your computer memory, you will help keep executive buy-in all year. In the weeks leading up to and following a hurricane, those responsible for disaster recovery and business continuity are superstars,” Ferdman explains. However, this scenario does not last long because the explorationists, capital market players, and others closer to the wellhead get the glory.
As hurricane season passes, new crises emerge and hurricanes become yesterday’s headline. “It’s the CIO’s role to keep the momentum of contingency support going all year long at the executive level,” Ferdman said. “Arm yourself with hard numbers, potential risks and a solid case for why executives should care and use this data to keep the issue in the foreground.”
Since an outdated plan is a useless plan, a need to upgrade and keep plans current is essential for survival.
“Don’t create a brilliant plan and then shelf it as your organization lives on to make operational and environment changes, pursue new corporate objectives or access a different portfolio of IT resources,” Ferdman said. “You should, with every operational change, ask yourself: How does this affect my disaster recovery plan? How does this affect potential downtime?”
Offsite disaster plan
Since you never know when disaster will strike, it is better to move sooner, not later.
According to Cyrus One, “Total Gas & Power’s Mark Groeschel was drafting a plan that would lessen the risk of facility downtime, including outsource IT infrastructure to a third party offsite.” But before the system migration was 100% complete, Rita hit.
“We had just finished negotiations to outsource when Rita hit,” Groeschel said. “So, five days prior to landfall, I had to come up with a contingency plan that involved transferring 10 people to our London office.”
Fortunately, Groeschel is a planner by nature, Ferdman said, and because he had a solid plan during the transition, his company’s IT infrastructure - critical to oil and gas trading - was protected.
Companies should have formal written processes in place for all fundamental infrastructure, back-office and communication needs, Ferdman said, whether dealing in IT facility design, roles and responsibilities, or operational planning. The simple exercise of holding all phone calls, clearing your desk and laying all the facts out in front of you for a rigorous series of “what if questioning” has true power, he said. You may not have to start from scratch. Since many operators and service companies necessitate compliance with Sarbanes-Oxley, existing investments in process improvement can be leveraged for a head start in business continuity and disaster recovery planning.
2006 hurricane season
The jury’s still out. ABC reports that according to the Colorado State University we can expect 17 named storms in 2006, almost double the long-term average, with nine of them hurricanes and five with winds of at least 111 mph. However it plays out, everyone upstream should think about their second-most valuable commodity - information - and ask if they’re prepared to protect it this year.
