Risk Management Strategies: Preparing For Blackouts
Interesting piece today by Bob Kenyon at REJournals about this month’s ten-year anniversary of the 2003 northeast power outage that put 50 million people in North America in the dark. Maybe it’s because of my technology-heavy background and the fact that I’m always the one asking the tough and sometimes unwelcome questions in the various offices i’ve worked in about data backup, but I’ve got a soft spot for stories that urge business continuity preparedness. This month is a great time for landlords and their reps to consider what would happen if your property was caught without a decent business continuity plan in the event of a blackout.
While it’s true that Kenyon is an exec with a generator-fuel supply company, and I tend to avoid linking to pieces that might be seen as back-door advertising, the fact is he does a great job running down what workable and complete business continuity plans look like in broad stroke. It’s worth a look for anybody working in commercial property.
August 14 will mark the 10-year anniversary of the 2003 Northeast Blackout that left about 50 million people in North America without power. While there hasn’t been another outage of that magnitude since, blackouts continue to be a leading cause of business interruption and operational challenges for real estate professionals here in the Midwest.
In 2012 alone, there were 125 reported power outages just in the state of Michigan, with 76 in Illinois and 67 in Wisconsin. Just because an outage doesn’t make international headlines doesn’t mean it can’t dramatically impact your business. Power outages cost the U.S. economy between $80 billion and $188 billion a year. The U.S. Department of Energy estimates that when power is disrupted to IT systems, 33 percent of impacted companies lose between $20,000 and $500,000; 20 percent lose $500,000 to $2 million; and 15 percent face catastrophic losses, facing more than $2 million in damages.
What can be done to prepare for blackouts? Here are a few tips based on lessons learned and emerging trends from more recent blackouts—from my experiences and those of Dean Schloyer, Global Head of Risk, Continuity, Security and Crisis Management for CBRE—on how to best safeguard your properties and businesses against unnecessary downtime.