April 16, 2013
This article previously appeared in the CPA Technology Advisor.
Imagine you are having dinner outside at a nice café in your town. You hear a fire truck racing by, you look up and then continue your dinner. Then you see not 1 more but 3 more coming from all the neighboring towns. Soon there is a lot of commotion. 5 blocks away there is a plum of smoke 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 out of for the last 70 years. You drop your napkin and run down the 5 blocks to find out that you are safe. It is not your building that is on fire it is the building 2 doors over. You think “Wow, I dodged that one” and go on home.
The next morning you go into work and after 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 2Million 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 this 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 moment you lost everything that your family has worked for for generations.
Pretty scary isn’t it. This actually happened to a friend of mine and it has affected their business in so many ways. She has survived but it has not been without its sacrifices and challenges. In the following 2 years, she would close one store, sell inventory below cost, and work harder than ever before.
The department of labor estimates that 60 percent of businesses hit with such a disaster close the doors within 2 years. Think about that, when disaster hits your clients you have a 60% chance of losing them. Not because of anything you did or they did but something out of anyone’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% 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, the accountant would be busy managing referrals. As a businessmen and not an accountant, this is exactly the type of advice I expect my accountant to give me.
This issue is dedicated to giving you the tools to provide lots of ways to help you help your clients plan for that awful moment of when disaster strikes. My objective in this column is to stress the importance of planning and the value of Software-as-a-Service when it comes to planning the disaster.
By definition “SAAS” solutions have a disaster recovery advantage. SaaS applications leverage the Internet so that you can work from anywhere. Everyday, this has advantages. I do my work from the office, home, on the road, or on my phone. When it comes to a disaster, this 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 there is an Internet connection.
The other primary advantage of a best in class SaaS company is that it thinks about disaster recovery and incorporates a strong plan into the DNA of its company. It is our job and if we don’t do it clearly our business is at risk. Core to every disaster plan is the backing up of data and documents routinely. Most small businesses think they are doing great if they back up their files once a month. Best in class SaaS companies have this built into their application. We make it so the software and the data that drive the application are backed up REALTIME in different locations that are thousands of miles apart and not in the same disaster zone. In fact we make sure they are on different Internet back bones and different power grids. That means that as long as there is Internet, 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.
How do you know if the company you are looking at 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 Sas70 certified by a reputable firm. The 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 expanind 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 you and your clients will need to run your business.
Finally, please don’t wait for the disaster to strike before you see the benefit of developing a disaster recovery plan. You 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.