Failure of 2e2 highlights the necessity of contingency

The recent demise of IT services firm 2e2 has caused alarm bells to ring for CIOs and IT managers across the country. After falling into administration, the administrators demanded that its customers pay out nearly £1 million to keep its data centres running - and retain access to their business critical data and applications.

The demands were made on the entire customer base, with the alternative to an immediate commitment being a cessation of "all operations with no managed wind-down". Individual customers were given a "pay up or we stop the service" ultimatum with just 4 working days to deliver the funds.

As this sorry episode shows, businesses can no longer rely on merely keeping their own houses in order. The growing trend for outsourcing elements of IT has heightened the significance of the technology supply chain, and eroded the amount of control an organisation has over its own IT. If your supplier fails, then you fail.

Failure doesn't have to mean out-and-out administration, however. Mergers and acquisitions can be equally disruptive, while a supplier decision to simply discontinue a particular application could be devastating.

The effects of this sort of disruption are very far reaching. As well as hitting business output, the damage to both reputation and customer relationships can linger and affect a company long after the issue has been resolved.

2e2's collapse and the huge demands placed on its stricken customers have served as timely and crucial reminders of the importance of contingency IT systems and processes. Anything that has a significant impact on day-to-day operations must be protected.

We have developed a service to protect clients from such circumstances, that extends our current levels of protection to enable a controlled switch to a new supplier if this sort of situation arises. Clearly Source Code Escrow remains at the heart of our service offering, and our SaaS protection service builds and extends that level of protection by offering a safe and controlled redeployment of both application and data.

Escrow is one of the most effective means of assuring the availability of your crucial applications & systems. With the agreement of all parties, a copy of the application source code or data can be stored with a trusted third party and the circumstances under which it can be released are set out, allowing organisations to balance risk and protect their investments.

The downfall of 2e2 should be a lesson to all businesses. Preparation is key - don't leave your IT to chance.

Published date:  11 March 2013

Written by:  Barry Clegg

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