Contingency planning by the numbers.

The recent hurricanes that hit Florida have many call centers once again pondering their disaster recovery options. It seems to take a few disasters to make us dust off our contingency plans to see if they're up-to-date and capable of seeing us through a real emergency.

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A big part of contingency planning involves calculating costs. Costs to prevent or recover from certain events must be weighed against the cost of the actual impact should that event happen. This impact analysis involves calculating and attributing a value to each customer contact so the team can calculate the cost of being out of operation.

Even in those centers that do not generate revenue directly, it is important to agree on a value for each answered contact to serve as a base. Then each measure of prevention should be evaluated to see if the call center could realistically afford each one. Sometimes the cost of prevention is much higher than what the cost of recovery or lost business would be. But more than likely, the cost of an ounce of prevention is less than the pound of cure that might be needed in the end.

The Federal Emergency Management Agency (FEMA) recommends an impact analysis using a format similar to the one provided here.

To use the chart, list the types of emergencies identified down the left column. Estimate the probability of any risk that has been identified. While this is a subjective exercise, it will help in determining which risks to prioritize in the prevention process. Use a scale of 1 to 5 with 5 as the highest probability. For example, a fire has a low probability and a network failure has mid-range potential, according to the sample analysis chart.

Next, assess the potential human impact of each emergency, including the possibility of death or injury. Assign a rating of 1 to 5 with 5 as the highest potential impact. The sample chart shows a fire as having a high impact on people, but the network failure has a low impact rating.

Assess the potential impact to property in terms of losses and damage. Once again, use the 1 to 5 scale with 5 being the highest. Consider the cost to replace, the cost to set up temporary replacement and the cost to repair. The fire in this example would have a high impact on property and a network failure would have little impact.

Score the potential business impact, including loss of market share. Consider business interruption, employees unable to report for work, customers unable to reach the company, company in violation of contractual agreements or regulations, fines/penalties/legal costs and lost sales. The impact of a fire and the network failure are rated relatively high.

Look at the internal and the external resources to calculate your ability to respond. In this case, a low score is better. Consider the following questions for each type of emergency:

* Do we have the needed resources internally to respond?

* Will external resources respond as quickly as needed or will there be higher priorities for them to serve?

In the sample, the internal resources available to respond to a fire are considered higher than those available to respond to a network failure. External resources are considered high in both cases.

The final step is to add up the columns. The lower the score, the better it is. This ranking will help prioritize the planning and funding of solutions in the efforts that follow. The sample shows both the fire and network failure are relatively equal in their impacts. Of course, the rankings that would be assigned by any planning team could be quite different from those in the sample.

Prevention TechniQues

Once the impact and resulting priorities are known, the next step is to determine what the prevention techniques are and estimate the cost of each option. The possibilities must include changes of procedures and other simple options along with the more elaborate solutions such as dual vendors and major system enhancements. Management will want to see a variety of possibilities and the costs associated with them before authorizing funds for a solution.

The options should provide a range of prevention possibilities, with some offering full prevention and others providing only partial protection. The team should apply a score to the potential for the prevention technique to mitigate the risks, and to be consistent with the impact analysis, a rating of 1 to 5 is reasonable with 5 representing total prevention.

An estimated cost must be determined for each technique. When compared to the other options under consideration and the score for the prevention effectiveness, the best choices should become clear. A sample prevention options analysis chart is shown here.

Recovery TechniQues

The planning team will also need to consider the recovery options should the contingency plans fail. Once again, the recovery options will range from simple manual processes with minimal expense to complete building replacement scenarios. Recovery can be partial or full, in stages or all at once, and the techniques considered must cover the full range of options.

In this stage, scoring the recovery techniques for their effectiveness (partial to full recovery) should be done along the 1 to 5 scale with full recovery options scoring a 5. This will be compared to the cost of each option and compared to other choices to find the best solutions to present to management for consideration.

Assigning some numbers to the risks, as well as the prevention and recovery options, will assist you in determining priorities and selling the plan to senior management so you are prepared should a disaster hit.

Vulnerability Analysis Chart

                         Human   Property  Business  Internal
Type of     Probability  Impact  Impact    Impact    Resources
Emergency   1 to 5       1 to 5  1 to 5    1 to 5    1 to 5

Fire        1            4       5         4         2
Network     3            1       1         4         4
failure
Flood
Other

            External
Type of     Resources
Emergency   1 to 5     Total Score

Fire        1          17
Network     2          15
failure
Flood
Other

(Resource: Emergency Management Guide for Business and Industry, found
at www.fema.gov.)

Prevention Options Analysis Chart

                                      Option A
                                      Prevention
Risk     Impact Score  Option A       Score               Option B

Network  15            $15,000        3--both             $138,500
Failure                annually for   available carriers  initial and
                       dual carriers  share part of       $15,000 for
                                      cable route         dual carriers
                                                          and added
                                                          cable
                                                          construction

         Option B
         Prevention         Recommended
Risk     Score              Option

Network  5--protects        A
Failure  from one carrier
         failure and cable
         cuts

Recovery Options Analysis Chart

                                      Option A
                                      Recovery
Risk     Impact Score  Option A       Score           Option B

Network  15            $7000 per      2--phone tag    $15,000 per
Failure                day--send      problems and    day--reroute
                       calls to       outbound long-  calls to out-
                       network voice  distance call   sourcer
                       mail and call  costs
                       back

         Option B
         Recovery            Recommended
Risk     Score               Option

Network  4--Handle calls     B
Failure  as they arrive
         but outsourcer
         not as effective
         in selling as
         in-house staff

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Penny Reynolds and Maggie Klenke are founding partners of The Call Center School, a Nashville, Tennessee-based consulting and education company. This article is an excerpt from one of their books entitled Business School Essentials for Call Center Leaders. Contact them at [e-mail] or [e-mail] or call 615-812-8410.