As the complexity, importance and dependence on information technology (IT) infrastructures has grown, so has the need for thorough information system (IS) planning. While IT systems are designed to meet and exceed the requirements of a firm’s business units, these systems are only effective if they are functional and can actually be used. They need to be continuously working and available for the business to take advantage of them.

Therefore, it is imperative that IT and IS service providers, together with the business units they support, plan thoroughly and implement necessary solutions in order to cope with events beyond their control.

Originally called “disaster recovery,” the practice known as business continuity planning, where firms’ IT departments and technology experts are tasked with developing plans to direct activities in the event of a crisis, is now commonplace. In particular, the highly specialized communications needs of a modern financial services trading operation present a number of challenges. In the high-pressure trading environment – where immediacy is paramount – failing to have a workable BCP strategy can result in significant loss of revenue and profit, or even a mortal wound to reputation.

While it’s not possible to prepare for every possible event, IT and IS service providers, along with their business units, need to plan thoroughly and implement necessary solutions in order to ensure their systems stay running and available.

The task of developing adequate, workable plans to direct activities in the event of a crisis is not an easy one. This is particularly true when looking at the unique infrastructure present in the trading room. In this pressure-filled environment, not only is 100 percent up-time the goal, it is demanded.

For any firm, this is a massive commitment, because it mandates the delivery of a cost-effective workable technology solution that meets the requirements of the trading environment.

Most of the time BCP is thought of in terms of the large-scale natural or man-made “disasters” we see in the news: an earthquake or tsunami in Asia; a transit strike, bomb scare or major stock exchange outage in Europe; U.S. hurricanes such as Ike, Hannah and Katrina; or terrorist attacks anywhere in the world.

However, while such events can have significant effects on a firm’s systems, more common are the smaller, less-dramatic events that can impact certain elements of a system. Events such as the severing of a cable or an isolated component failure can be extremely inconvenient. Solutions that mitigate the effects of these events are often relatively economic to implement and can be extremely effective. And yet, when considering BCP, they are often overlooked.

To help in planning, we can look at disaster events as having four levels. The matrix on page 28 will give you an idea of the impact of an event on the operation of a trading floor and what the solutions should aim to address. Level One is isolated component failure. Level Two is loss of trading floor access. Level Three is loss of trading floor infrastructure. Level Four is extended loss of building and/or business district. A wide range of technical and architectural solutions exist that will limit the impact of an event on the trading floor operation.

Conclusion

For firms worldwide, BCP is now as prevalent as redundant backups for their key servers. While it’s nearly impossible to predict when and where the next disaster will strike, or how large or small its magnitude, firms preparing for these events will have the best chances to limit the impact on the productivity of their trading floors.

Colin Silvester is director of product management at IPC Systems, 201-253-2018; email: colin.silvester@ipc.com; web: www.ipc.com.