From the September 2009 Issue
Imagine you are having dinner outside at a nice café in your hometown. You hear a fire truck race by so you look up … and then you continue your dinner. Then you realize not one, but more than three other fire trucks go by, all from neighboring towns.
Before long, there is a lot of commotion, and just five blocks away a plume of smoke has begun racing into the sky. After the initial fear for loss of life, you realize that the smoke is coming from the same block that your family business has been operating from for the last 70 years. You drop your napkin and run that direction to find out that your business is safe. It’s not your building that is on fire; it is the building two doors over. Once the firefighters have the flames under control, you decide to go on home, thinking, “Wow, I dodged that one!”
The next morning, you go into work and after attending to a few emails you realize you need to go downstairs and get something out of the files. When you open the door to go down into the basement, you are shocked. It is full of water. Apparently, the fire next door took 2 million gallons to put out, and much of it ended up in your basement. All the records that you rely on to make your business run are now gone.
You no longer know what you paid Tom the last time he did that brochure or what your contract with “Big Company” requires of you. You realize in a heartbeat that the days ahead will be the most challenging time in running your family’s business since your grandfather started it 70 years ago. You’re afraid that you’re not up to it. You’re afraid that the business won’t make it. You’re afraid that in just one evening, you lost everything that your family has worked for generations to build.
It’s pretty scary, isn’t it? This actually happened to a friend of mine, and it has affected her family’s business in so many ways. She (and the business) has survived, but it has not been without its sacrifices and challenges. In the two years that followed that fire, she closed one store, sold inventory below cost and worked harder than ever before.
The department of labor estimates that 60 percent of businesses hit with such a disaster close the doors within two years. Think about that: When disaster hits your clients, you have a 60 percent chance of losing them. Not because of anything you or they did, but because of something that’s out of everyone’s control.
It doesn’t have to be that way. You, as a trusted advisor, have the opportunity to influence decisions and actions ahead of such a disaster. Imagine if my friend’s accountant had influenced her to have a disaster recovery plan. It would have been a few weeks of disruption, but the business would not have been at risk. Instead of the accountant facing a 60 percent chance of her going out of business and losing a client, my friend would be telling all of her business friends about how her accountant saved her business by forcing her to plan for just this moment. So instead of the stress of a disaster and the probable loss of a client, the accountant would be busy managing referrals. As a businessman (and not an accountant), this is exactly the type of advice I expect my accountant to give me.
I cannot stress enough the importance of planning and the value of Software-as-a-Service (SaaS) when it comes to planning for disaster. By definition, SaaS solutions have a disaster recovery advantage. SaaS applications leverage the Internet so that you can work from anywhere, and this has advantages every day. Like many of you, I work from the office, from home, on the road or on my phone. When it comes to a disaster, the SaaS advantage can save your business. It means that when a hurricane, an earthquake or a tornado strikes, you can leave town like you should and resume work from the next state or town, where it is safe and where there is an Internet connection.
The other primary advantage of a best-in-class SaaS provider is that it thinks about disaster recovery and incorporates a strong plan into the DNA of its company. That’s part of their job, and if they don’t do it clearly the business is at risk. Core to every disaster recovery plan is the routine backup of data and documents. Most small businesses think they are doing great if they back up their files once a month. Best-in-class SaaS companies have backup functionality built into their applications. They make it so the software and the data that drives the application is backed up in real-time in different locations that are thousands of miles apart and not in the same disaster zone. In fact, they should be on different Internet backbones and different power grids.
This means that as long as there is Internet service, you and your clients will be able to get to the tools you need to run your business. Duplicating this capability for a small business is prohibitively expensive from a cost and time perspective.
So how do you know if the vendor you are considering is best-in-class? You should check the background of the management team for prior successes where this would have been part of their job, make sure they have strong investors that have backed successful companies where this is valued, and most importantly make sure they are SAS 70 certified by a reputable firm. SAS 70 requires that certain procedures be in place including controls and security around any of the stated operations. The auditors have to check that the procedures are followed so that the data is backed up at the frequency stated.
As you consider adding or expanding your disaster recovery consulting, please consider SaaS. There are SaaS applications for phone systems, accounting, document management, bill management, payroll, tax preparation, inventory management and pretty much everything else you and your clients will need to run a business.
Finally, please don’t wait for the disaster to strike before you see the benefits of developing a disaster recovery plan. Your clients are depending on you to push them, to serve them and to protect them from such disasters. I should know; I am one of them.