Is Your Firm Disaster-Proof?

A disaster—whether contained to your individual business, or the entire town or county—can affect your company for weeks and months. Following some simple suggestions by experts in the field may make the difference between your company going out of business, or surviving intact and actually thriving years later.

Disasters run the gamut from floods, local to your office building or the whole town; hurricanes; fires; terrorist attacks or anything else that stops your business in its tracks for days and weeks on end. How can you prepare for these unexpected and often unexplained incidents? Experts say a well-thought-out preparedness plan, backed up by a good insurance policy, can make the difference between bankruptcy and solvency when disaster strikes.

According to Carol Chastang, public affairs specialist, U.S. Small Business Administration (SBA), Office of Communications & Public Liaison, there are three components to remember when preparing your business for the possibility of a disaster: a financial plan, a good insurance plan, and a communications plan.

These components are important because they will help a business survive while you’re waiting for federal or state aid, she noted.

“Your financial plan concerns your business’ financial information and any warranties or proof of ownership for equipment in your business. This information should all be stored off-site in a fire proof area out of your county,” she noted. “The location should be less than a day away for your site but clearly out of the disaster area should there be a flood. Backup files of software programs should also be at this location.

“Your insurance plan should include business interruption insurance, which in most cases pays your operating expenses and rent while your business is down,” she explained, adding that sometimes a business is open, but customers can’t get into the town or county because of the disaster.

“Make sure you know what your insurance policy covers,” she said. “Not every policy includes flood insurance.”

This is important to note because in the case of federal aid through FEMA or the SBA, some disasters are not covered. “If your pipes burst in your shop, that is an isolated disaster to your business or building and would not be something covered by federal aid. So you’re on your own to recover losses,” Chastang explained.

A communications plan is also vital to the survival of the business. “Phone numbers of suppliers, manufacturers, utilities and customers should be handy for all upper management,” she noted. “You need to let your customers know that you’re not out of business, that you’re coming back to the area.”

She added that it is also important to let the local media know how your business is rebuilding so they can report it to their readers.

Jim Olson, vice president of inside sales and solutions engineering at SunGard Availability Services, said his company offers many tips to effective business continuity planning in the event of a disaster. “Companies need to plan for a wide range of scenarios, including fire, flood, hurricane, etc.; owners need to understand their data requirements; employees need to know where to go after the disaster; and you need to test your plan with a mock disaster.”

SunGard provides disaster recovery services, managed IT services, information availability consulting services, and business continuity management software. With four million square feet of data center and operations space, SunGard assists IT organizations across virtually all industry and government sectors prepare for and recover from emergencies by helping them minimize their computer downtime and optimize their uptime.

According to Olson, questions business owners need to answer before a disaster strikes are: How long can your business afford to be down; What is the impact of being down; And how much data can you afford to lose? “Knowing your recovery time objective, your hard dollar loss, the damage to your reputation, and your soft dollar loss are all vital to surviving the disaster,” he explained.

“Making informed decisions prior to the disaster, researching technology and hardware recovery beforehand, and testing your plan are essential,” he stressed. “If you haven’t tested your plan, you have no plan.”

After a disaster, he added, “look to keep your people, systems and information connected.”

Both Chastang and Olson agree that a multifaceted approach is vital to success after a disaster takes place. Olson suggests making short-term arrangements to outsource work, building a recovery plan, and knowing your insurance policy before an incident happens in your area.

Some items on the SunGard Disaster Preparedness checklist are:

  1. Develop and regularly test your disaster preparedness plan, so the first time it is executed is not during an emergency. Make the plan robust enough to address extended recovery that may require utilization of new facilities, relocation of staff and involvement of outside personnel.
  2. Create and test your crisis communication plan to help ensure the tools and protocols are in place to operate during a disaster, reaching out to all parts of the organization and employee family members, as well as vendors, government agencies and emergency responders.
  3. Strictly enforce change management and control processes to help ensure vendor contracts are current so vital services will be available when needed.
  4. Develop detailed procedures for technical recovery scripts that will be deployed to help get IT infrastructure up and running.
  5. Assign backup roles for the inevitable times when key players are not available or missing, and time-sensitive actions need to be taken. Employ cross training to have alternative contacts ready to go.
  6. Execute your incident management plan that has been documented and tested, charting how to handle plan activation, safety issues, security, communication and personnel notification.
  7. Evaluate readiness and completeness of off site data storage. Paper records and backup tapes may be totally lost, destroyed, or unavailable. Develop contingencies should delivery of off site-stored data be delayed. Investigate using electronic media to help safeguard and provide backup information.
  8. Utilize outside organizations to augment staff, including personnel from alternate locations. Be prepared if internal teams don’t have access to transportation or are reluctant to travel away from their families in the middle of crisis.
  9. Engage corporate and external agencies while testing to create realistic conditions and help ensure links with outside parties will work.
  10. Test the way you recover, recover the way you test. Experience pays off in a time of crisis.