Reciprocal Agreements

Is a Reciprocal Agreement with Another Organization the
Best You Can Do?

Companies in various industries have used reciprocal agreements to satisfy examiners' and auditors' back-up requirements for years. However, fewer and fewer examiners are satisfied that a reciprocal agreement is in the best interests of a company or its customers.

Let's look at the advantages and disadvantages of reciprocal agreements.

Advantages

• The single biggest advantage of a reciprocal agreement is the cost. Most agreements are in exchange for a like service or a very small fee.
• Another advantage of a reciprocal is that the other organization is usually nearby. You don't have to travel far to test.
• One more advantage is that the other organization typically shares similar equipment.

Disadvantages

• You tend to get what you pay for. You pay little or nothing for a reciprocal agreement. Usually you get nothing in the way of service or support, and no guarantees.
• As noted above, proximity to the other organization can be a major advantage during testing. However, it can be a major disadvantage when a real disaster comes along. If a major disaster strikes your geographic area, there's a good chance that both you and your reciprocal agreement partner will be affected.
• Your reciprocal agreement partner purchased its computer to run its critical applications, and sized its system accordingly. Likewise, the it's only natural that no matter what the situation, the other organization's top concern will always be running its own business. What does that mean to you in the event of a disaster? First, you'll have to "take a number," and wait to do anything until it's convenient for the other organization. Then you're not even assured of a computer facility that can accommodate all your needs. Finally, trying to run applications for two organizations on one computer system is inherently dangerous. One wrong move and you could corrupt the data from both organizations. That's why using a reciprocal agreement during a disaster has been referred to as a "double disaster." The first disaster is the one that caused you to come to the reciprocal site in the first place. The second is the disaster created by trying to "work around" and use another organization's system.
• On the flip side, what happens when the other organization experiences a disaster? Do you really want someone else working on your computer systems, putting your mission-critical data and applications in jeopardy?
• Probably the most important disadvantage is that reciprocal agreements seldom work effectively. You may save a small amount of money, but what will it cost to reestablish goodwill with your customers or to attract new customers following a disaster that left you unable to meet your customers' needs?
• During business hours, two systems cannot offer online services simultaneously. Thus a reciprocal partner cannot provide your customers or employees access to their data during business hours. Chances are you'll only have system access in off hours.
• According to the Gardner Group, two out of five companies that experience a catastrophic event or prolonged system outage never resume operations! Their report also found that the cost of trying to resume operations and the loss of customer goodwill accounted for the main reasons why 60 percent of the affected enterprises went out of business within two years. An effective business resumption plan can put you on the positive side of this statistic.

Do you want to take that chance?
The officers and directors of your company can be held legally liable if your company experiences a disaster and is not properly prepared. Simply put, you can't afford not to let Centurion Disaster Recovery assist you with your disaster recovery preparations.