Imagine if your company's headquarters were in Paducah, KY, worlds away from Hurricane Alley and earthquake fault planes. It sounds like one of the safest places to operate a company free from disaster-causing business interruptions. Then again…
After a snow and ice storm ravaged Kentucky in January, businesses owners in the affected areas were scratching their heads, wondering what they should do next. Meanwhile, other companies throughout North America took notice and began dusting off their disaster recovery plans.
Sure, a majority of the affected businesses have business interruption insurance that guarantees reimbursement for both damages and lost income. But what happens to their business and, more specifically, their clients and employees in the meantime? Are your customers willing to wait for you to get back up and running? Will your employees be there when you reopen or will they find alternative employment?
According to a recent study by Forrester Consulting, only 25 percent of businesses feel they are “very prepared” to recover their people. The other 75 percent need to find a solution.
Fortune 500 Establishes Need for Planning
Dating back to the 1970s, the largest companies in the world began assessing their risks and formulating contingency plans. These efforts were not initiated by the companies but rather by shareholders who demanded contingency planning in order to protect their investments. Companies spent hundreds of thousands of dollars annually to add operational redundancy.
As decades progressed, the face of business continued to change. Companies became more reliant on technology, leading to swifter operations. We were able to handle faster turnaround times for tasks like orders, customer service responses, and internal and external communications. We computerized our core functions, leading to issues of data management. Today, we're seeing basic business functions and computer applications moving to a complete Internet-based environment, necessitating 24/7 Web access.
These increases in technological dependence bring greater risk to companies of all sizes, in all industries. But the risk-aversion practices of the largest companies in the world are not realistic or affordable for small and midsize businesses. These businesses, although smaller than those in the Fortune 500, collectively employ more than 95 percent of our working population, meaning it's just as important to plan for interruptions.
Benefits of Recovery Planning
Having an actionable disaster recovery program gives a business a competitive advantage in the marketplace. Imagine a regional storm cutting power to your city. Wholesaler A, as part of its recovery plan, utilizes a generator and remains open while wholesaler B, with no plan in place, waits to reopen when power is restored days later. Do you think a contractor is going to wait on wholesaler B to reopen, or will he proceed to wholesaler A to pick up parts? The answer is obvious.
Disaster recovery planning has its benefits, like being able to restore normal operations within hours or days of an interruption. But outsiders don't realize that companies going through the planning process often identify business activities and aspects that can be condensed, streamlined and even eliminated.
Additionally, publicizing your actionable disaster recovery plan to employees, customers, partners and more will add credibility to your business, telling your varied audience that yes, you have pride in your company and plan to do whatever it takes to be in business. Employees will always have a place to work. Clients will always have a place to call. And (you probably won't publicize this) owners and managers will have a continued revenue stream.
But look deeper. What would happen if employees didn't have a place to work? How long are they willing to wait for you to recover? They still have bills to pay and families to feed. Without a steady income, they'll do whatever it takes to find another job. And what about your customers? Can they have their HVACR needs met by companies other than yours? Of course. And once that happens, don't expect them to come back to your business.
Piecing Together a Plan
Business interruptions can take many forms and seldom give us warning. And what might constitute a nuisance to a large company could be a “disaster” to a smaller one. Every business is different and must consider the specific challenges that confront it. Businesses must take into account size, location, priorities and a multitude of other variables that the company can define while preparing the program.
In many respects, a company able to recover quickly and serve its clientele while operating in a crisis will earn high marks from employees, clients and partners alike.
Statistics show that 70 percent of businesses will lose power within the next year. Sure, many of these outages will be for seconds or minutes and will only require a few simple tasks once electricity is restored. But, what if an “event” causes electricity to be out for days or weeks? How will your company react?
When we think of power outages, we list weather disasters as the top causes. Thunderstorms, tornadoes, hurricanes and the like are all causes of power outages. But smaller isolated events such as blown transformers, improper construction digging and even automobile accidents are often the culprits for unlikely interruptions.
You may need to secure a generator to keep critical functions operating. Even though hundreds of thousands of power generators sit unused throughout the country, regional outages make the resources scarce in a matter of minutes. Entering into agreements with generator or disaster-recovery providers ahead of time will give you priority access at the time of an interruption.
In addition, you'll need to contract with a fuel vendor to refuel the diesel for the generator. Having an agreement in place ahead of time will ensure your priority status, especially during a widespread event.
Businesses in the 21st century rely on technology more than ever. You probably turn on your computer each morning and check e-mail. You may save digital client files on a server. The list goes on and on.
When piecing together the technology portion of your business continuity program, consider:
Which technologies are critical for our daily operation?
Do we back up our server regularly? Is the backup stored offsite? Have we tested our backups?
If employees use laptops, do they take them home each night? Should all employees have laptops?
Do we have the original software license disks and codes in case we need any programs on new computers?
How long can we be without a critical server or other piece of equipment?
What's our plan for rapid replacement?
Managed and co-managed hosting for data protection is a current trend. This entails a simultaneous backup of server files between your office and the managed hosting facility. Some companies choose to eliminate in-house servers altogether in favor of managed hosting.
You should also consider what you will do if its entire technological infrastructure is compromised. A “big box” retailer should not be the only option, as demand may outpace supply during a regional event. Consider contracting with a technology or disaster-recovery provider ahead of time to ensure timely replacement of critical equipment.
Simply put, what would you do if your office space was inaccessible for days or weeks? Your employees may be able to get by the first couple of days by working from home. But if the office is inaccessible, there's a chance that e-mail servers and complementary technology may be out of commission, too, which will hinder regular operations.
Establish plans for alternative office space ahead of time. Some organizations may choose to utilize a secondary location, lease temporary office space or secure access to a mobile office unit.
These three common options may seem overwhelming to plan for and implement. But doing so in advance will make the recovery process smoother than if you had made no plans.
The final major aspect of restoring operations is that of connectivity, which means access to phone and Internet connections. As stated before, we take connectivity for granted in our everyday lives. You'll address the need for connectivity when a long-term outage affects phone and Internet use in your office, you need additional bandwidth or lines when recovering in a secondary office space, or you choose to recover in a mobile office unit that you cannot connect to land-based resources.
Regardless of the situation, you should plan to enter into an agreement with a satellite or disaster-recovery provider that can provide you with phone and Internet access in your recovery timeframe via a secure satellite connection. In addition, you should have a plan in place to reroute your existing phone number(s) to a voice mailbox or cell phone, if service is available.
The four key elements of a business continuity program are just the beginning. The second part of planning should consider the people aspect of your business.
Communicating to Publics
It's important to maintain active communication with employees, clients and partners during the planning process and the interruption itself. Publicizing your planning efforts will keep you accountable and give your publics confidence in your abilities as a proactive owner or manager.
During an interruption, you'll need to establish ongoing and professional communications to inform and educate your publics about the realities of the interruption, your intended recovery plan and any other pertinent information. Companies use their websites, public message boards, newspaper articles and advertisements, and alert notification systems to keep their audiences informed and engaged in the recovery efforts.
Planning for the Loss of an Employee
No one likes to think about the possibility of losing an employee, especially a key one. We fully expect to run a highly successful business with reliable employees who never get sick, have spouses who face a transfer, receive better employment opportunities or suffer a tragic disability or death. Unfortunately, denying the possibility until such an incident occurs can put major strains on any business, especially if they have not planned for the possibility of such an occurrence. Many companies could find themselves in jeopardy if there is no plan in place when a principal or a key employee is lost.
Your company must consider several critical items when putting together your continuity program.
Developing Job Descriptions and a Company Work-Flow System
The only way to plan for the loss of an employee is to ensure that you document all aspects of job responsibilities. One of the first steps in this process is to develop a written job description for each employee. These job descriptions should also include all tasks for which the employee has secondary responsibility. Your company can then use this information in an emergency for reassignment, hiring and assessment of loss.
Also document the company's work flow in a detailed organizational chart. You will need to review and refine the job descriptions and work-flow system until they accurately portray your business. Once completed, you should conduct an annual review of these documents to make sure staffing modifications or changes to the office or business environment have not rendered any aspect of the work-flow documentation obsolete or inadequate.
After accomplishing these first two tasks, the company will need to review all positions to make certain at least one other individual in the organization can step forward when necessary and perform all responsibilities until the employee returns or a permanent replacement or solution is available. This alternate person should receive all necessary training to ascertain they are ready for the responsibilities. If either the primary individual or the alternate feels uncomfortable with the alternate's ability, the company should offer additional training or appoint a different alternate.
If any person cannot be adequately backed up by an existing staff member or partner, including and especially the managing partner, a solution outside the office should be found. Consultants or accountants might be the best answer to ensure the business will survive any adverse situation until the company can implement a permanent solution. Again, you should complete preparations and negotiations with these outside professionals before an issue occurs. The company's negotiating position is more powerful when a potential interruption has not occurred, and any entailed transition will be much smoother when all contributors (employees and outside professionals) have a complete understanding and appreciation for their position in any personnel interruption.
Addressing Personal Concerns
A disaster, especially one affecting a widespread area, can cause struggles beyond your business. If there's a large power outage due to an ice storm, getting your business up and running will not be your chief concern. As a human being, your primary reaction will be to secure the safety of your family and friends, your employees and their families. You'll want to check in with your clients to ensure their well-being. You're going to want to reach out to your publics as a friend, not as a boss or business owner. Being compassionate and considerate toward the realities of life will make your business stronger when it does resume operations. Employees and clients will always remember you putting their personal hardships ahead of your business relationship.
An interruption, big or small, will put strains on your business and on yourself. Consider moving forward with the planning process now and inviting a third-party expert to refine your plan, answer questions and, if needed, assist in your recovery at time of interruption. Be truthful to yourself and your business, and understand where your limits exist.
Paul Sullivan is general manager and vice president of strategic solutions for Agility Recovery Solutions, a North American leader in on-site disaster planning and recovery solutions for businesses. Sullivan has 25 years of experience in the disaster recovery and information technology industries, including tenures with Comdisco Continuity Services and IBM's Business Resilience and Continuity Services division. Contact him at [email protected] or visit www.AgilityRecovery.com.