Outsourced IT Partner’s Outage Disrupts Multi-Subsidiary Operations for 36 Hours

The Challenge

A Canadian manufacturer with four subsidiaries experienced a 36-hour outage after its Managed Service Provider (MSP) suffered a core network failure. Critical systems, including ERP, VoIP, corporate email, identity services, and shared file storage, were inaccessible across all sites.

Production halted when electronic work orders and maintenance documentation could not be retrieved. Safety protocols could not be validated, so several plants issued stoppages. Payroll and procurement systems were unreachable because single sign-on depended on the same MSP infrastructure.

The business impact was immediate: delays across the supply chain, missed customer deadlines, and reputational harm. Costs mounted from overtime, expedited freight, and scrapped materials. Compliance teams raised concerns under PIPEDA because HR records and audit trails were unavailable. The MSP’s disaster recovery region was located in the United States, which triggered additional questions about cross-border safeguards and data sovereignty.

The incident exposed structural weaknesses: a heavy reliance on one provider, the absence of offline access to essential documentation, ambiguous SLA language, and no independent communication channel for crisis coordination. Operational resilience had been assumed rather than engineered.

Our Solution

We delivered a Managed Services Resilience and Vendor Risk Remediation program that combined technical, contractual, and governance controls:

1. Incident response and postmortem. We led a joint technical review with the MSP, documented root causes, captured downtime metrics, and collected evidence on SLA performance.
2. Operational continuity framework. We introduced local read-only data mirrors for production schedules and safety records, created offline packs for core procedures, and implemented an out-of-band crisis communications plan.
3. Multi-vendor and hybrid design. We segmented hosting across two providers and implemented a Canadian-based hybrid model for ERP and identity to eliminate single points of failure.
4. Compliance and cross-border governance. We updated contracts and DPAs to align with PIPEDA and Canadian privacy guidance, set clear data residency requirements, and defined notification triggers.
5. Executive and plant-level training. We ran tabletop exercises and vendor oversight workshops, including escalation paths and status reporting standards.

The Value

Within six months, the client achieved measurable resilience:

– Zero downtime incidents in the following 12-month period.
– A 45% reduction in vendor-related risk exposure, based on the internal audit scoring model.
– A tested three-hour restoration time using hybrid backups in Canadian zones.
– Confirmed PIPEDA alignment through third-party assessments and updated contracts.
– Improved board reporting on vendor oversight, which supported customer retention and bid quality.

The program restored operational confidence and replaced assumptions with tested controls.

Implementation Roadmap

Phase 1: Assess and Stabilize (Weeks 1–4)
– Conduct post-incident review, collect logs and SLA evidence, and map dependencies.
– Stand up a temporary out-of-band communications channel for future incidents.

Phase 2: Govern and Contract (Weeks 5–8)
– Rewrite SLAs with clear uptime targets, validated start times, and escalation timelines.
– Update DPAs and data residency clauses.
– Define reporting obligations and audit rights.

Phase 3: Build Resilience (Weeks 9–14)
– Deploy dual-provider and hybrid architecture for ERP, identity, and storage.
– Implement local read-only mirrors and offline operational packs at each plant.
– Schedule quarterly failover and recovery tests.

Phase 4: Train and Monitor (Weeks 15–20)
– Run executive tabletop exercises and plant-level drills.
– Launch vendor risk dashboards and quarterly reviews.
– Plan annual reassessments and refresh controls as business needs evolve.