The New York branch of Standard Chartered won't spend big on business-recovery services
Max Kofman and Vincent Milack are going shopping. Their mission: to build a state-of-the-art trading floor. The New York branch of the United Kingdom's Standard Chartered Bank, once located in Tower 7 of the World Trade Center complex, plans to go first-class when it relocates to permanent facilities. "We're getting new PCs across the board with 2 Gbytes of memory and 2-GHz processors, flat-panel screens everywhere, video monitoring, video switching, remote cable management, split screens, the works," says an excited Kofman, the branch's VP of technical support and manager of global markets, America.
In the meantime, Kofman and Milack, senior VP of global markets at the U.S. currency exchange facilitator for businesses conducting international transactions, and almost 50 other employees are working out of borrowed space donated by advisory investment bank Lazard LLC. The backup facility in Jersey City, N.J., is operated by services vendor SchlumbergerSema Global Recovery Services.
The Standard Chartered unit's disaster-recovery plan never included fully duplicating operations to accommodate all its employees in an off-site facility. And despite what they've been through, that mentality has changed very little.
Milack (left) and Kofman say Standard Chartered's New York division required just one backup PC to keep operations going on Sept. 11.
The only concession the group is making is to add four backup trading desks with Internet connections to the single one it maintained in New Jersey--which let the company continue international business operations throughout the night of Sept. 11. "We were well set up from a bank standpoint--we didn't skip a beat, and our customers were very impressed with that," Kofman says. In fact, "we were able to get other people's business because there were banks that couldn't get payments out." Had flights not been grounded, the unit would also immediately have flown staff to U.K. headquarters, the repository of the unit's backup data, to start doing business again at full speed until new facilities were online, Milack says. Given the circumstances, Standard Chartered workers from other parts of the world were flown to London to cover for the U.S. branch until New York employees were able to fly out of the country a few days later. The New York recovery site was operational within a week, with the addition of specialized phones for the dealers and reworked network connections.
Some might think the Standard Chartered unit was taking a chance by not having a fully configured backup site ready for its workers, but analysts say that all the attention given to business continuity after Sept. 11 has left one point untouched: Some plans don't need to be as extensive as others.
The question of cost effectiveness needs to be considered. "If the operation is only 50 or 100 trading seats and they paid someone for a hot site, they have to pay for the seats year-round," says David Tapper, program manager at research firm International Data Corp. For an industry such as finance, which uses a lot of proprietary technology to run trading floors, maintaining a local recovery location can be expensive even for small installations--duplicate facility contracts can go up into the millions of dollars. "To get more people to move to recovery contracts, the recovery industry really needs to reduce the costs so that businesses say, 'Flying people is more expensive than paying for a hot site,'" Tapper says. Until that happens, a cost-risk analysis may lead more smaller players--even those without the resources of a larger corporate parent to turn to when disaster strikes--to conclude that they'll implement only modest backup plans, but otherwise take their chances.
Milack agrees. "We don't think it's wise to have a whole duplicate setup somewhere else, and we proved that we can do without it," he says. Aside from the planes being grounded, everything went according to plan, with only some minor difficulties. For instance, getting WAN providers to connect the division's routers via T1 lines to the U.K. offices took about 30 days; Kofman says the unit "is still battling to get direct voice lines into the U.K."
Malik admits the space and technology aren't up to the standards to which workers are accustomed, but even with the compromises and glitches, things are operating well enough to keep the business running without compromising quality of service. "We don't think we should put all our efforts into bringing this location up to the same level as our old offices when we're only going to be here four or five months," he says. "We brought it up to a level where we can keep continuity going without subjecting business to a lower level of quality, and giving the customer high-quality service."
Of course, the situation could have gone less smoothly. Lazard contacted SchlumbergerSema to offer its space to any displaced company, and it was SchlumbergerSema's strong relationship with Standard Chartered in the United Kingdom that quickly led the services vendor to the division's door. Milack acknowledges the fortuitousness of events. "We came here and there was a trading floor here not being occupied, so we actually lucked out," he says.
But he doesn't expect that finding permanent headquarters will fall into place quite as easily as this. With the tight real-estate situation in New York, Milack doesn't expect any relocations for another five months.
5 Top Federal Initiatives For 2015As InformationWeek Government readers were busy firming up their fiscal year 2015 budgets, we asked them to rate more than 30 IT initiatives in terms of importance and current leadership focus. No surprise, among more than 30 options, security is No. 1. After that, things get less predictable.