Hidden Costs Of Damaged Technology by CMatthews | Business Resilience, Disaster Recovery Modern business depends on technology. Servers, desktops, notebook computers, tablets and phones are essential to everyday workloads and doing more with less. Any disruption to these tools can cause extreme stress to an already overworked employee or team. When damage to technology that runs business occurs, there are more factors to consider than just hardware. These are referred to as “soft costs” Software Installation Network Configuration Data Recovery & Transfer Employee Profile Setup License & Maintenance Contracts Warranties All which affect the bigger concern… Business Interruption (BI) How long can a business be down before it affects income? Weeks? Days? Hours? Most companies will answer that question with: “Never, we can’t be down at all!”. Imagine being without your equipment for two days without warning. No computer, no phone. It is probably a bit unnerving to think about, much less experience. How quick a company can get back to business depends upon whether they have a plan in place for disasters. Larger companies may have them, sometimes they are required by law to have such disaster plans in place. But since small business make up 99% (according to the SBA) of the US employers, that leaves most of the owners at a disadvantage when disaster strikes. Vendors that install and sell equipment for a living are not likely to be worried about costs, especially in an insurance situation. You need to make sure cost effective solutions are being considered. Vendors provide a valuable service, but remember, they sometimes may see a loss as a sales opportunity and may suggest “upgrades” that are not necessary, or suggest replacement of items that are not needed. This can increase the cost significantly due to lack of experience with these types of situations. Due diligence needs to be done. Instead of “Replace It All”, you should look at what was really affected and what wasn’t. How bad is the damage? Can items be used right away? Can items be restored and put back into use ASAP? What needs to be replaced? How long will it take to get back up and running? If equipment is replaced, the following questions should be addressed: How long until the hardware can be delivered? What configuration needs to be done to each component? What software needs to be installed? Are “upgrades” to the equipment necessary? Are the technologies compatible with each other? Is data recovery needed from the old equipment, how quick can that be done? Do user profiles have to be setup on the workstations again? Any network configurations needed for the equipment? Replacement equipment can take weeks to arrive and set up, this may delay the business from operating for the same amount of time. Calculate the hardware plus the soft costs, add in the days or weeks of lost revenue and then you have a better idea of how the claim can escalate quickly. From a standpoint of minimizing business interruption and claim costs, the quickest way to get back up and running is to use the original equipment. This equipment is already configured, has all of the software and profiles intact. Proper inspection and restoring the hardware should help it live a normal life, barring any permanent damage from a direct hit by water or heat. In a loss that is handled properly, there may be a mixture of recovery and replacement. Using the original equipment is usually a much quicker and more cost effective option, equaling a fraction of replacement especially when considering the soft costs discussed earlier. If technology is addressed quickly enough after a loss, contaminants cleaned from circuit boards properly, odds are the original equipment can be restored to a pre loss condition. A proper investigation of loss involving technology should flow like this: Determine what equipment was affected. If equipment was affected, what can be repaired/recovered cost effectively? Create a plan to restore operations to enable workflow to continue. Is after hours on-site mitigation necessary? Order equipment that needs to be replaced ASAP. Plan different phases to get full operations back into working condition. Make sure there are no compatibility issues with a mix of new and old technology. Testing and use of systems to make sure all operations are back to normal. Sometimes the knee jerk reaction to a loss involving water or smoke is to “Replace It All”. While this may be great to get a system upgraded and new, it is not the best option to save time, money or the hassle that comes along with new equipment. It certainly rockets the costs associated with the loss at first glance. As we have discussed there are many considerations to determine what the quickest and most cost effective way to get business technology systems back up and running after a loss. Make sure the vendors involved take all of these considerations into mind.