IBM Offers Contingency Planning Assessment Service for Pandemics

Published: June 15, 2006

by Timothy Prickett Morgan

Trying to prove yet again that IBM is more than an IT provider and that it has some expertise in dealing with disasters, Big Blue last week announced a new consulting and technology service to help companies deal with a potential flu pandemic.

A cynic might say that there is no disaster that a clever company like IBM cannot and will not exploit for profit. But, to be fair, while the immediate potential of a flu pandemic is somewhat remote, the amount of disruption that such a pandemic might cause to business and our personal lives is no doubt potentially huge. IBM cited figures from the Lowy Institute for International Policy that put the cost of a flu pandemic at somewhere around $4.4 trillion, which is about 8 to 12 percent of worldwide economic output. If IBM has done such disaster planning for itself--and, equally importantly, helped companies through disasters before--then maybe IBM's advice might be worth buying.

IBM's Contingency Planning Assessment is aimed specifically at the pandemic issue and how it affects employees and business operations. It involves looking at your current plan (which is probably nothing short of the normal disaster recovery and business continuity plan as it relates to disasters like hurricanes or tornados or system outages) and updates it to cope with the complexities of an infectious disease. This planning is not cheap, by the way, costing from $10,000 to $35,000 for a small- to medium-size business. But, IBM is to be commended for providing list prices for a service, which it does so rarely. For larger enterprises, which tend to have multiple sites and more complex businesses, IBM is charging $50,000 to $150,000 for the service. This may sound expensive, but it might not be as bad as it sounds.

Do the person-hour calculations on how long it would take your organization to come up with the same plan. If you assume that you pay your IT staff around $65 an hour for salary, benefits, office space, and such, that low-end price means a plan would have to take you less than 155 person-hours for a homegrown assessment to make more economic sense than paying IBM. That's less than four weeks for a single person. IBM is probably billing out at $250 an hour to do these jobs, which means Big Blue is able to do an assessment a single person-week. If you think you can surf the Web, talk to your neighbors and colleagues, and build a better plan than Big Blue in four weeks, then do it yourself. But you won't get any other work done during that time, either. And you will have to make the presentation to management and employees.