Thinking About the Business Impact of the Crisis in Japan, Reluctantly

Carl Weinschenk

Just about everybody, I am sure, is reluctant to talk about the business aspects of an unfolding disaster. The feeling is particularly strong in the case of what is going on now in Japan, for three reasons: The magnitude of the suffering still is too great, there simply seems to be no end in sight to that suffering, and the situation is so unprecedented that it is too early to say anything intelligent.

Each in the unfortunately long list of disasters of the past few years had a beginning and an end. In this case, however, the disaster actually is a series of disasters-an earthquake, a tsunami and a crisis at the Fukushima Dai-ichi power plant-that shows no signs of ending. Indeed, things seem to be strangely escalating.

From the point of view of not having a definitive ending to the business disruption, the current situation is most like the volcanic ash cloud that enveloped Europe a year ago. There is no comparison in terms of human impact, of course. The ash cloud was an inconvenience, albeit a major one. But the comparison is that it was something that nobody had direct experience with and that it was ongoing for an unidentifiable period.

The more prosaic reason for not commenting on the situation simply is that we haven't been down the road of an earthquake/tsunami/nuclear crisis in an important industrial region before and nobody has a clue of what will happen. This Reuters story describes possible scenarios on impact to the telecommunications and automotive supply chains. The truth is that anything anyone says at this point is a wild guess and is more about whether the individual making the prediction is an optimist or a pessimist than it is based on any real knowledge or experience.

At this point, it important for companies to think about things that are under their control. Alternate sources for things that could get scarce is, of course, one of those things. Disaster recovery/business continuity (DR/BC) is another. Earlier this month, I had the opportunity to write a feature about the movement of DR/BC to the cloud. One of the points sources made to me was that using commodity-priced storage as the main DR/BC vehicle in an era of exploding data demand is a penny-wise, pound-foolish strategy. The idea that planners are willing to do this suggests that they aren't thinking enough about DR/BC in general.

Finally, the big takeaway is that no DR/BC plan is foolproof. No company in that area of Japan would be able to have plans in place that would make much of a difference. The best idea is to have data and people as decentralized as possible, so that the impact of regional crises can be minimized as much as possible. This, of course, is a great advertisement for cloud computing and telework.

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