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Disaster Planning in Six Quick Steps

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Covenant Technology, an IT consulting group based in Houston, Texas that specializes in small and mid-size businesses, has been advising clients on disaster preparedness for years. But in 2005, when Hurricane Rita blew ashore too close for comfort, a number of those plans got put to the test. “We had one client — an investment business — that we had recently helped with a disaster plan. This particular client wanted a plan that meant they’d never be down,” recalls David Robertson, president of Covenant Technology. The business was in Houston, close to the coast. When Rita hit, they tested the plan and were able to continue trading from an inland backup location, in San Antonio. Robertson and his client made all the right decisions preparing for a disaster. Most businesses don’t. “Most small to mid-size businesses are not adequately protected. They don’t anticipate the possibility of an event in any form,” says Frank Scavo, president of Computer Economics, an Irvine, Calif. research firm. There are a lot of reasons businesses tend to procrastinate: expense, time, disbelief that anything will ever go wrong, or simply not knowing where to begin. Here are six steps to get started that will hopefully minimize costs and time commitment, as well as make a compelling case to take action. Step One: List events that may cause lost data or technology. Ideally: Companies should have contingency plans for the kinds of disasters that they are vulnerable to based on geography or the nature of their business. A business in California may be primarily concerned with earthquakes and wildfires, while companies in Houston are focusing on floods and hurricanes. Other companies may be more concerned about being a high-risk target for theft or terrorism. Other considerations: Scavo advises business owners to also consider more mundane disasters. “Just losing a laptop that has the only copy of a piece of critical business data can be devastating,” he says. “The trend towards mobile computing has compounded this risk in recent years.”     At the very least: “Pick the ones that are most worrisome,” says Robertson. Planning for the biggest risks is better than no planning at all. Step Two: Safeguard the company data.   Ideally: In addition to routinely backing up data, Robertson recommends that companies store it offsite with a Web-based data storage solution. Many third party solutions are reasonably priced for smaller businesses. Other considerations: The more redundancies the better. A locally-owned data center that rents space is great for backing up company information. But in the event of a natural disaster, it can be compromised, too. Ask if they have a back-up system elsewhere in the country. At the very least: “It’s cheap to just get an external hard drive, plug it into the server, and do a complete backup. But you have to remember to do it,” says Robertson. You also have to remember to store it offsite. Scavo suggests rotating sending it home with different employees. Step Three: Safeguard the network. Ideally: A lot of companies take adequate measures to save data, but forget to do the same to save the system,” observes Scavo. Make arrangements in advance with a co-location facility that offers not only redundancies in backing up data, but fire suppression, backup power, and proper cooling to keep the servers humming. Other considerations: Define acceptable ‘down times,’ which differ depending on the business. Covenant Technology’s client was an investment business obligated to continue trading and could afford no time offline. Another business may be able to close for a few days while an alternate network is loaded with company applications and data. At the very least: Have a schematic of the network and an inventory of all the hardware that make up the infrastructure. Replacement gear won’t be exactly the same, but it will offer a roadmap of where to begin. Step Four: Safeguard staffing. Ideally: Essential staff needed to run business-critical technologies, like the network or certain applications, are sometimes impacted — even if the disaster doesn’t damage your business. Every key position should have someone cross-trained to take over in case of an emergency. Key staff members need to have reliable remote access to the company network. Other considerations: You see companies prepare for loss of equipment or data, but not people. But what about a pandemic? It doesn’t touch the system, but instead the staff,” points out Scavo. Companies need to not only consider contingency plans for displaced staff, but for losing a portion of staff or having them quarantined at home. At the very least: Keep a running list of essential staff and cross train those positions. Also keep a check list of which employees have what level of access from home. Step Five: Test the plan. Ideally: All plans look good on paper. Having the occasional real life drill is where the rubber meets the road. Most consultants recommend testing and updating the disaster plan once a year, if not every six months. Other considerations: A disaster drill is worthwhile for everyone, but it’s essential for new staff. In addition to hard copies of the plan, keep hard copies of passwords and IP addresses, along with access data for bank accounts. Double-check and update each year. At the very least: For businesses that don’t have time to test, dust off the written response protocols and have a read-through with staff. Fine tune the plan, and offer a refresher course to employees. Step Six: Have a recovery plan. Ideally: “You have to think about what happens after the disaster. How will the data on the alternate system be returned to the company?” asks Robertson. This requires a well thought out protocol. Other considerations: How will recovery in one area impact the recovery in another? Allowing employees to occasionally work from home also functions as an informal drill to make sure they can work offsite. At the very least: Factor in additional hours, days, if not weeks or months into projected times for returning to normalcy. Look at New Orleans. The immediate disaster of Hurricane Katrina lasted only a week or two. More than two years later, a total recovery is no where in sight.

May I Help You?

The customer enters McGrath Acura of Westmont, Ill. Within seconds, the salesperson pounces. “Hello. My name is Grace. How can I help you?” “Just looking,” the visitor replies. “Let me help you with that,” Grace continues. “Are you looking for new or preowned?” It’s a conversation you’d expect to hear at any auto dealership. Except that this didn’t happen in the show room. The exchange took place online, at acurabymcgrath.com. Last year, general manager Ken Girard added a new feature to the dealership’s website: live chat. Now, instead of waiting for a visitor to click on a button and ask for help, a service agent detects the visitor’s presence on the website and initiates a real-time conversation. “It really sets our site apart,” Girard says. For most of its brief history, online shopping has been a largely anonymous process, with Web-based merchants content to wait for browsers to initiate an interaction. But now, more businesses are adding technology that allows them to step up and make the first move and offer a virtual “May I help you?” The idea is to introduce a human factor into virtual shopping. “People like to buy from people,” says Farrakh Azhar, CEO of Live Admins, a Chicago-based company that helped Acura of Westmont create its live-chat experience. “It’s the same as walking into a store and having a staff person greet you. It makes a connection, a one-on-one conversation.” Even now, years into the Internet revolution, e-shopping remains a dicey business. Research shows that 98% of visitors leave without making a purchase. Indeed, about half of all Web shoppers who put an item into a virtual shopping cart leave without buying it, according to the E-Tailing Group. “As an industry, we need to look at why 98% of the people who visit us leave without making a transaction,” says Robert LoCascio, CEO of New York City-based LivePerson, a provider of inbound and outbound chat technology. “Especially since the rate of impulse buying is much higher in the offline world. Why are we still at 2%?” He and others insist that the answer lies in making virtual salesmanship more proactive. Web shoppers should not have to sacrifice service for the privilege of shopping in their bunny slippers at 2 a.m., LoCascio says: “We can do more.” Mark Denham, CEO of 247 Workspace, is onboard. The company, a seller of office furniture based in Los Gatos, Calif., added chat to its website in early 2005. The goal was to provide more qualified leads to the company’s sales reps. Because most customers are other business owners looking for things such as conference tables and cubicles, the sales process is often long and complex, involving a great deal of back-and-forth between the sales rep and the buyers. “There are a lot of choices and particulars in our sales process,” Denham says. “We were finding that having an individual try to sort through 600 pages on our website was overwhelming.” The outbound chat aims to simplify things. It looks a lot like Instant Messenger, though customers don’t have to download software for it to work. Not every visitor to the site gets a greeting. But if you hang around for a few minutes or get seven or eight pages deep into the content, a live agent will say hello and offer to help. In most cases, the agents simply help visitors find the information they’re looking for. “Individuals who have engaged in text chats have a much higher sales probability than a standard lead,” Denham says. “Once we engage in a conversation, we find the probability of a sale goes up dramatically.” Other companies use the tactic with a bit more restraint. Jesse Kelsey, marketing project manager of eRug.com, says he loves to shop online precisely because he knows he won’t have to fight off a lot of pushy salespeople. So his company, based in Redwood City, Calif., is designing a live-chat system that will give shoppers an unmolested five minutes. After that, a text box will appear, saying, “If there’s anything we can do to help, our design consultants are here for you.” The company’s four design consultants will do the chatting, and Kelsey promises that it will be a soft sell. “We offer to help, but we don’t scare the customer away. We don’t want to turn anybody off,” he says. That’s a wise mindset, says Martha Rogers, founding partner of Peppers and Rogers, a management consulting firm in Norwalk, Conn. Approaching Web shoppers, according to Rogers, is a dangerous game. “One reason people shop online is because they don’t want to be harassed by the sales help,” she says. “If they want live help, they know where to get it. The idea that salespeople can now follow you around online is not very appealing.” Maybe not to all shoppers, but anecdotal evidence suggests live-chat technology works. The Internet service provider Earthlink boasts that 15% of its initiated chats result in a customer signing up. E-Trade Mortgage, based in Arlington, Va., added an “invite to chat” program in early 2004. In the first six months, the program improved customer satisfaction ratings and the company found chatters were more likely than nonchatters to become customers. And it also works for smaller outfits–which can get the service for as little as $99 a month. Rackspace, a Web services provider in San Antonio, gets about 80% of new sales via an initiated chat session, according to founder Patrick Condon. And LoCascio found 25% of visitors to his site who were engaged in a chat ended up buying something. “Humanizing the experience helps make the sale,” he says. Resources Tech website TopTenReviews has a live-chat buyer’s guide. For more advice, read “How to Screw Up Live Customer Chat (and How to Fix It).”

One-Stop Dialing

CEO’s Start-Up Toolkit: CLECs A new kind of telephone company wants your business and will go to great lengths to get it When Don Holcomb came on as vice-president of operations at Amfinity Business Solutions, in 1998, he discovered the employee-leasing company didn’t have E-mail. The 15 employees in the St. Petersburg, Fla., headquarters relied solely on the telephone, the fax, and snail mail to communicate with the company’s thousands of leased workers nationwide. “We had no E-mail functions, and we had no ability to tie other locations to us,” Holcomb says. That would have been fine except that Amfinity’s client base had grown so rapidly since the company was founded in 1996 that staffers were having problems processing the voluminous payrolls, tax statements, and medical and retirement forms in a timely manner. Holcomb knew he could use the Internet to make the company more efficient, but he found that most existing service offerings were geared for larger businesses and were too expensive for his company. Then he discovered 2nd Century Communications, a relatively new provider known as a competitive local exchange carrier (CLEC). The folks at 2nd Century said they could offer Holcomb’s company what more established providers would not: an affordable Internet package that included high-speed Internet access, E-mail, and a hosted Web site. The company also gave Holcomb local and long-distance telephone service and desktop support — all on one bill, all at a savings of 10% per month compared with the company’s previous bills. By bundling a wide variety of phone and Web services, CLECs can give discounts of 30% or more. Start-up 2nd Century is just one of more than 200 CLECs that have blossomed since the passage of the 1996 Telecommunications Act, which broke up the local monopolies held by the Bell companies. In 1999, CLECs pulled in more than $26 billion in revenues collectively and served almost 400,000 office buildings nationwide. By bundling their various communications services, these providers can give discounts of 30% or more. Besides cost advantages, the new providers bring other benefits. For instance, Holcomb found that by replacing the handful of service providers he had previously used with just one, he eliminated some hassle. Now he manages only one vendor relationship instead of seven, so when a problem crops up, he knows exactly whom to call. That has eliminated the previous finger-pointing among providers that he knew only too well. In addition, industry observers claim that small companies typically get better service from CLECs. “As opposed to the incumbents, the CLEC sales reps are Johnny-on-the-spot,” says Craig Clausen, senior vice-president at New Paradigm Resources Group, a Chicago-based consulting firm. “They’ll go out of their way to give you all the information so that you can compare apples to apples and then give you the opportunity to ask some questions.” Don Holcomb found that by switching to just one service provider, he eliminated some hassle. Companies may find some CLECs willing to do things that other providers won’t, like troubleshooting the network, helping to upgrade equipment, and providing desktop support. George Fajta, chief technology officer at Kadem Capital, found CLEC Winstar willing to undertake some complex technology challenges in order to win his business. Kadem, a two-year-old U.S. equity trading fund with 22 employees, needed a backup connection to the Internet in case its primary one failed. To deliver that, Winstar worked with Kadem’s current provider, Eze Castle, to set up a special kind of routing between the two providers. Although there are many good reasons to sign up with a CLEC, customers may run into a few hitches along the way, especially if they’re currently receiving service from a Bell company. In order for a business to keep the same telephone number while switching telephone companies, the providers must follow a complicated procedure to make the transfer. Both the old and the new providers must make changes to their databases at the same time; otherwise the customer could be left temporarily without phone service. Vince DiBiase, senior vice-president of ICG Communications, a CLEC based in Englewood, Colo., acknowledges that it can be a challenge for companies like his to get new customers up and running. “This is a disadvantage that every CLEC will have unless the particular customer is located in a building that either my company or another CLEC actually has wiring into,” he says. If a CLEC doesn’t own the wires into a particular building, then it must go through the often lengthy process of ordering and reselling service from a Bell company to serve customers at that site. If a small business calls a Bell company like US West directly, it will likely get service within a couple of weeks, but at ICG it could take as long as a month to 45 days to order that service resale from US West, says DiBiase. Getting personal service: “If I needed to, I knew I could go pound my fist on their door,” says Holcomb. For CEOs like Kathleen Bagley, the ultimate benefits of doing business with a CLEC typically outweigh the initial wait. About a year and a half ago Bagley relocated her company, Prime Source Lending, to another location in San Antonio. It took three months for ICG to switch her company’s service from Southwestern Bell to its own. But Bagley says she switched because Southwestern Bell had told her that because of the move she’d have to get a new phone number for her company and pay a monthly fee to have calls forwarded from the old number. That arrangement would have been renewable on a year-to-year basis, and if Southwestern Bell had needed that number at any time in the future, the company would have taken it back, she says. ICG, on the other hand, let Bagley keep her old number and didn’t charge any monthly fees. In fact, Bagley has been so pleased with the relationship that she’s also switched her long-distance service from AT&T to ICG. Initially, even Don Holcomb felt that it was risky to give his business to a new provider. Still, he found comfort in the fact that 2nd Century was located close to his company. “If I needed to, I knew I could go pound my fist on their door,” he says. And so far that personalized service has paid off for his company. Recently, several employees complained to Holcomb about slow Internet connections. Before Holcomb could pick up the phone to call 2nd Century, he had already received a call from the company. “They said, ‘We’ve noticed that you’ve been having problems with your connections today. We’re working on it now to take care of the problem, and it should be resolved in 10 minutes,’ ” he says. “That just floored me.” Rachael King is a freelance writer based in Hoboken, N.J. Looking for a CLEC near you? A good first step would be to check out www.clec.com, where you can search for providers by city and state. You can also check with your state public-utility commission, which keeps a list of all new providers licensed to operate in your state. For more on the gear you really need to start and grow your small business, see our CEO’s Start-Up Toolkit. Please e-mail your comments to editors@inc.com.

Cut-Rate Collaboration

CEO’s Start-Up Toolkit: Intranets Free intranet services provide a simple way to communicate with far-flung employees, as well as with customers, suppliers, and, yes, even your spouse Kid Cardona was ready for a chuckle when he clicked on the E-mail message that offered free “intranets.” “When I first saw it, I had never heard of the word intranet,” says Cardona, who is the owner of the Infamous Cartoon Posse, in San Antonio. “I guess that’s a term that’s used in big business, but I’m a little guy. So I said, ‘Boy, did they misspell this. I wonder what else they screwed up.” Curious, he opened the message, which touted a new information-sharing service from a company called Intranets.com Inc. It was no typo. Intranets.com, based in Woburn, Mass., is a leader in the market for free intranet services. Intranets — basically, internal networks based on Internet technologies — have been around for about five years. Initially, the Web-like platforms were embraced by large corporations, which found that publishing internal directories and employee manuals was easier to do electronically — and using intranets was also cheaper than churning out paper updates every few months. More recently, intranets have become easier for small companies (with limited tech teams) to create. And they have become more useful. Today, in addition to Web publishing, intranets typically feature a variety of collaborative tools, including document sharing, group calendars, online meetings, and bulletin boards. Intranets resemble the Internet in more than name. Users access intranets by means of browsers, pulling up pages that look and work just like pages on the Web. But while the Internet is a public space, intranets are private. Users generally need a password to move from the Internet to an intranet; in some cases, the two may not be connected at all. Until recently, big companies could afford to build and run their own intranets, but many smaller businesses could not. Small companies had two alternatives — assuming, that is, that someone had decided it was worth having an intranet at all. The first option was a prepackaged intranet-in-a-box, such as Cobalt Networks Inc.’s Qube 2. Priced at around $1,000, the Qube 2 is a six-pound box that includes the hardware and software for setting up file sharing, discussion groups, and E-mail on a local area network. For companies without a LAN, the alternative was an intranet hosted by an outside service provider. For example, HotOffice Technologies Inc., in Boca Raton, Fla., provides templates for creating and customizing intranet pages. HotOffice stores the data; subscribers have password protected access to the information over the Web. A two-time PC Magazine Editors’ Choice, the subscription-based service is priced from $9.95 to $12.95 per user per month. With some quick clicks on a template, you can have your own private Web site, open only to the privileged few. Now a few companies have taken the hosted model to the next logical step. Following close on the heels of free home pages, free Internet access, and free PCs, free intranets have entered the fray. Intranets.com CEO Steve Crummey once sold shrink-wrapped intranet software at $5,000 a pop but recast his business model last year with help from Idealab founder Bill Gross. After paring down his software, Crummey began offering a free version in August 1999. So far the company has signed up more than 185,000 groups, ranging from 2 to 800 members in size, Crummey says. In January, HotOffice Technologies countered with a free service of its own. The two services are similar in features and design. A couple differences: Intranets.com lets users pick their own domain name; HotOffice does not. Intranets.com also requires that users fill out a survey so that information about their company can be used to customize their site. A few clicks later, and the intranet is up and running. By clicking on links, users can post announcements, manage calendars and databases, and upload files. And employees — as well as customers, suppliers, and anyone else the user invites — are free to log on. Group scheduling is a popular feature with the free-intranet crowd. Kid Cardona, originally skeptical about the worth of any free service, today uses his site to schedule gigs for the Infamous Cartoon Posse’s six caricature artists, who are based in Austin, Houston, Fort Worth, and San Antonio. Before signing up with Intranets.com, Cardona spent hours chasing Posse members on the phone. Now that the cartoonists check the intranet regularly, his phone time is down to 20 minutes a week. Doris Boeckman, a consultant with Missouri’s Department of Public Health, values the ability to share information quickly and easily with clients in 16 communities across the state. Boeckman, who also opted to use Intranets.com, works with community-based groups on issues like elder care and substance abuse. Every week on her site she posts material about funding opportunities and upcoming events. “We’ve really cut back on mailings,” she says. With an intranet, “at the click of a button, it’s there.” The price for that convenience is an advertising bar that runs across the top of each page. In addition, Intranets.com charges for telephone support. Although HotOffice’s phone support is free, the long-distance call to the support line is not. Both companies offer free support by E-mail but charge for storage beyond the multimegabyte first chunk. (Individual users get 25MB free with Intranets.com; each registered company gets a total of 40MB free from HotOffice. That may sound generous, but if users post a lot of graphics, the bill will quickly mount.) So far, users seem satisfied with the bargain. “We’re all on the Internet so much, you have a tendency to put the ads out of your mind,” says Tom McKenna, director of client relations at LiquiDebt Systems Inc., a 12-person credit-collection company in Warrenville, Ill. McKenna, who signed on with HotOffice, compares the service favorably with his experience using a free Internet service provider. “The free-ISP ads really bark at you,” he says. “The HotOffice ads are more subtle — but you know they’re there.” McKenna hasn’t seen any difference in performance since LiquiDebt switched from the fee-based version of HotOffice to the free service late last year. But computer consultant Glenn Weadock, author of Small Business Networking for Dummies, cautions that graphics-intensive banner ads can significantly boost download time, depending on the speed of the user’s Internet connection. In addition, the ads may distract employees and detract from the professionalism of the site — especially in the eyes of customers. Scheduling virtual employees? It’s easier with an intranet. Security is another hot button. Intranets.com and HotOffice both promise customers that their data is stored at state-of-the-art data centers featuring sophisticated firewalls, round-the-clock surveillance, and server backup every night. According to Kneko Burney, a research director at Cahners In-Stat Group, those safeguards go far beyond what a typical small business could provide on its own. But the ultimate issue may be control. As Weadock says, “I’m sure 99% of the time the providers will behave responsibly, but if they have a slip, it’s out of your hands.” And you can’t get everything for nothing. More sophisticated knowledge-management applications, like fine-grained searching, generally can’t easily be built on top of Web-based intranets, according to Ian Campbell, vice-president of research at Nucleus Research Inc., a technology-consulting firm based in Wellesley, Mass. But for some business users, free intranets really are a great deal. Says Campbell, “They’re fantastic for collaboration on smaller projects, even in a big company, or for very small companies where the company is the project.” Mary Kwak is a freelance writer in Cambridge, Mass. If this is Tuesday… In our household, we’re time-management — or perhaps mismanagement — pros. My husband and I both have jobs that take us across the country and around the world. Yesterday I got back from San Francisco. Tomorrow he heads for Istanbul. In our ongoing effort to coordinate our schedules we’ve moved from a whiteboard (not enough room) to a wall-mounted year-at-a-glance (clashed with our decor) to multiple calendars (his, hers, ours) to not-quite-matching PalmPilots. So I jumped at the chance to give Web-based “calendaring” a try. Getting my free intranet from Intranets.com was easy. Six minutes after I typed in my chosen domain name, onceinabluemoon.intranets.com was mine — complete with dancing Visa cards at the top of the page. Scheduling is straightforward. I click on the calendar and enter a title, date, and time; then I have to decide whether I want to be E-mailed a reminder before the event. My husband enters his commitments, and we negotiate possible conflicts offline. Since we started using our intranet, the number of conversations that start with “What do you mean you told me…” has sharply declined. But there’s one thing the intranet can’t do: help us say no. Which is why I’m looking for hotels with good Internet access in Tokyo, Seattle, and Beijing. Free Intranets Here’s a selected list of sites on which you can get something for nothing. And share it. eGroups HotOffice Technologies Intranets.com Planet Intra Wizmo Yahoo Connected Office For more on the gear you really need to start and grow your small business, see our CEO’s Start-Up Toolkit. Please e-mail your comments to editors@inc.com.