Many Chicagoland Companies Are Flirting With Disaster; Recent Study Shows One-Third of Local Businesses Lack Contingency Plans.

CHICAGO -- In a year that saw a wide range of devastating natural disasters, such as Hurricane Katrina, as well as a string of widely publicized security breaches, local companies remain surprisingly unprepared for future emergencies. According to a report issued today by AT&T Inc. (NYSE: T) and the International Association of Emergency Managers, more than four out of 10 Chicago businesses do not consider continuity planning to be a priority, and one-third of local businesses lack such plans altogether.

While many area businesses seem unprepared for emergencies, the survey found that 13 percent of Chicago companies have suffered a disaster that resulted in their organization's decision to cease operations for a period of time, a potentially devastating consequence for businesses heavily reliant on the uninterrupted flow of information.

"Disaster Planning in the Private Sector: A Look at the State of Business Continuity in the U.S." surveyed 100 senior technology executives with direct business-planning responsibilities in Chicago. Nationwide, more than 1,200 executives from companies with more than $10 million in annual revenues have been interviewed, representing a broad sampling of industries and markets.

About 65 percent of Chicago businesses reported having a business-continuity plan, down from 72 percent in 2004. The local business community's preparation lags that of Washington D.C., Kansas City, Atlanta and Florida, as well as the national average.

Chicago companies that do have plans have, generally, kept them up to-date; 72 percent say that their company's plan had been updated in the past 12 months. Chicago companies also seem to realize the importance of testing their plans; 55 percent conducted a full-scale test in the past 12 months, and 26 percent conducted a test more than a year ago. Only 12 percent have never tested their plan. Still, only 32 percent have tested their plan in the last six months, the recommended interval.

"Continuity plans attempt to cope with unpredictable and often disastrous events and are reliable only if they've been updated and tested regularly," said Jerry Gerami, region vice president, AT&T Business. "That is why frequent testing is vital to their success."

With their increasing reliance on corporate networks, Chicago businesses appear to understand the importance of Internet security. While only 72 percent of executives said that cyber security was part of their overall continuity planning, 82 percent say that their companies have either already adopted or intend to implement in the next six months such security measures as firewalls, intrusion detection, hacker protection and password authentication. More than three-quarters (77 percent) have or will establish backup servers and/or backup sites. Almost half -- 42 percent -- have used or are planning to use an outside service provider to help them with communications security.

"A certain amount of complacency has seemed to settle in Chicago, which is similar to what I have seen nationwide and internationally, said Michael J. Fagel, Ph.D., who as a certified emergency manager has served as president of Region V for the International Association of Emergency Managers. "Our local businesses may have a false sense of security since the city is far from the major fault lines and hurricane tracks. But nobody is immune from disaster. In today's world, no business can allow itself to become hostage to fortune. The best answer to natural and man-made threats is to be ready for them."

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AT&T Inc. is one of the world's largest telecommunications holding companies and is the largest in the United States. Operating globally under the AT&T brand, AT&T companies are recognized as the leading worldwide providers of IP-based communications services to business and as leading U.S. providers of high-speed DSL Internet, local and long distance voice, and directory publishing and advertising services. AT&T Inc. holds a 60 percent ownership interest in Cingular Wireless, which is the No. 1 U.S. wireless services provider with more than 52 million wireless customers. Additional information about AT&T Inc. and AT&T products and services is available at www.TheNewATT.com.