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Is Your Home Building Company Prepared for Disaster?

What if your business and its records were literally wiped out tomorrow? How do you pick up the pieces? Whom would you turn to? We've scoured resources to get you prepared in case disaster strikes.

By Mark Jarasek, Senior Editor, Electronic Media
April 15, 2009
GIANTS

Sidebars:
Resources from Consulting Firm MIR3
Two Groups for Help
Know Thy Resources
What Does This Cost Me?
Emergency Planning For Employees
Continuity of Operations Planning

Like a menacing horror movie monster, disaster can morph into many unexpected forms. Hurricanes, tornadoes, terrorism and wildfires have wrought widespread devastation. It's way too easy to become complacent and believe that a disaster, including even the crash of a critical computer hard drive, could "never happen to us." As the old saying goes, $#!+ happens.

When it happens, it can wreak havoc on your home building business. Experts in the field of business continuity and disaster preparedness say that no matter what the cost or effort, it pays to be prepared.

Think about the consequences that a disaster might have on your business network. How many pieces of information are generated for each home that's built? How crucial are those contracts, work orders, construction schedules, payroll and tax records to your business? Imagine the impact if that information were lost.

Are Home Building Companies Prepared?

No survey has been done of home builders' preparedness but two recent surveys on business continuity and disaster preparedness indicate that businesses of any size may not be adequately prepared, if prepared at all.

The Ad Council on behalf of the Department of Homeland Security's Ready Business group surveyed small businesses in October 2005. The survey reports 92 percent of respondents said they believe it's very or somewhat important for businesses to take steps to prepare for a catastrophic disaster. However, only 39 percent said their company has a plan in place in the event of such a disaster. Why? While many respondents acknowledge the value of preparedness, time, workforce and money constraints prohibit them from developing a plan.

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In March 2008, Aberdeen Group, an information technology consulting agency, surveyed more than 150 end-user organizations, and results prove that Best-in-Class IT organizations have infrastructures that support rapid recovery of data and applications with minimal or no downtime. That assures business continuity even in the face of a severe disruption event. While 62 percent of all the companies surveyed experienced between 1 and 5 business interruption events in the last 12 months, only 49 percent of the companies surveyed have had a business continuity strategy for more than 2 years, and 34 percent of those have yet to implement a solution.

"It's hard to imagine that a company wouldn't have a data backup system, but just backing up data alone doesn't constitute a disaster recovery strategy," says Jeffrey Hill, senior research analyst in Aberdeen's Data Management and Storage practice. "In order for a recovery strategy to be effective, it needs to recover the right applications and data in a timely fashion. Put another way, how long an outage can a business tolerate before there is a tangible impact on operations?"

The Impact of Downtime

A white paper, "The Business Case for Disaster Recovery Planning: Calculating the Cost of Downtime" prepared by Iron Mountain, a firm that provides outsourced records and information management services for businesses, warns that virtually every company faces the risk of IT interruptions that can grind business to a halt.

The white paper explains:

"One overlooked truth is that downtime costs accelerate. ... If a system fails for five minutes, the costs are fairly low because manual methods of making records or communicating by telephone instead of e-mails can suffice to conduct business. Over an extended period, however, the volume of work overwhelms the manual process. Business and financial operations increasingly deteriorate, and the rate of dollar losses grows — sometimes to the point of fatally damaging the business."

To help you avoid this scenario, we've compiled resources to get you started. Even if you have a plan, these resources provide best practices and ideas to enhance, improve or even prompt you to revisit your program before disaster strikes.
 

Resources from Consulting Firm MIR3

Webcast: Save The Data!

This Webcast from Simply Continuous and Data Domain covers common IT disaster recovery challenges, including deduplication storage basics, secure back-up and data recovery best practices through real world customer examples.

Products that Might Help You

Amir Moussavian, CEO of MIR3, discusses his company's communications systems builders can purchase and systems' ability to save lives.

MIR3 Senior Account Executive Tom King talks about mass emergency notification that uses a variety of modalities.

MIR3 White Papers

MIR3 Webcasts

Client Case Study Three: MIR3 and COOP Systems

Learn about notification systems and software.

Best Practices Webinar

A 10-minute presentation on disaster preparedness best practices

Two Groups for Help

What NAHB and the Department of Homeland Security Can Offer

NAHB

The NAHB is currently in the process of developing a Business Continuity / Disaster Recovery toolkit specifically for home building firms. "It will cover everything from A to Z," says Ken Ford, NAHB program manager, Mitigation and Disaster Assistance. The toolkit will be available to members of NAHB.

Ford says two of the most important things to consider for business continuity are: 1) a communications plan for employees in the event of disaster and; 2) safeguarding all critical documents related to the home building business, including bank statements, tax records, contracts and accounts receivables.

"If all the records of a business were destroyed or lost, it would be very difficult for a home builder to obtain a loan for recovery from a bank or even from a governmental assistance agency if they can't show or prove past business activity," Ford points out.

Department of Homeland Security

The Department of Homeland Security created a Web site dedicated to disaster preparedness for businesses. Ready Business contains a treasure trove of free, in-depth information, guidance and document templates that can help any size business prepare their firms for the worst. Businesses are advised to:

  • Be Informed. Risk assessment is a sophisticated area of expertise that can range from self-assessment to an extensive engineering study. The size and scope of your individual company will determine your organization's risk assessment needs.
  • Know what kinds of emergencies might affect your company both internally and externally. Find out which natural disasters are most common in the areas where you operate. You may be aware of some of your community's risks; others may surprise you.
  • Learn about what to do during a biological, chemical, explosive, nuclear or radiological attack.

Know Thy Resources

Here are a variety of resources that home building firms can turn to when putting together a corporate plan for disaster preparedness.

Disaster Management and Related Organizations Online

This list of online resources are set up to assist businesses before, during or after disaster occurrences.

Ready Business (FEMA)

Business.gov

Disaster Recovery Institute

American Red Cross

Small Business Administration

Disaster Preparedness and Emergency Response Association

FEMA/Emergency Management Institute

International Association of Emergency Managers

National Emergency Management Association

National Safety Council

Business Continuity/Disaster Recovery Planning Service Providers

These are some of the organizations that home building firms can engage to assist in developing a comprehensive business continuity and disaster recovery program.

Virtual Corporation

Virtual Corporation is a business continuity consulting and software company that assists organizations with all aspects of their business continuity (BC) programs. There are white papers related to business continuity available in the Resources section of its Web site.

Aberdeen Group

Aberdeen Group is a research and consulting firm that serves the technology needs of businesses.

Simply Continuous

Simply Continuous enables business enterprises to enhance their data protection and disaster recovery capabilities.

Grant Thornton

Grant Thornton is a consulting firm that can assist businesses in a wide variety of operational needs, including business continuity and disaster preparedness.

MIR3

MIR3 provides communication platforms for business enterprises. Its products and services are used for IT alerts; business continuity and disaster recovery messages; emergency management; and contact center outbound notifications.

Iron Mountain

Iron Mountain outsources records and information management services for both physical and digital media; disaster recovery support services; and consulting.

VMWare

VMware provides virtualization solutions from the desktop to the datacenter for businesses. VMware is used to reduce capital and operating expenses; ensure business continuity; and strengthen security for the business enterprise.

Datotel

Datotel provides data "hotels," or colocation facilities, that give businesses a place to store data off-site. They also provide disaster recovery services, network redundancy and connection options in case of network outages.

Disaster-Resource.com

Disaster-Resource.com serves as an online guide to help businesses find information, vendors and organizations that can assist in preparing for or recovering from any type of natural or other type of disaster.

Cisco (White Paper from ZD net)

Cisco is a supplier of networking equipment and network management for the Internet.

What Does This Cost Me?

The following provides an idea of what it may cost to develop a disaster protection and business continuity plan. Some of what's recommended can be done at little or no cost. Here's a sample from a list on Ready Business that you can use to get started.

No Cost
  • Review your current insurance coverage.
  • Create evacuation procedures.
  • Develop an emergency contact list including employee emergency contact information.
  • Put together a list of critical business contractors and others you will use in an emergency.
Under $500
  • Buy a fire extinguisher and smoke alarm.
  • Identify emergency supplies the company can feasibly provide, if any, and talk to your co-workers about what supplies individuals might want to consider keeping in a personal and portable supply kit.
  • Back up your records and critical data. Keep a copy off site.
More than $500
  • Consider additional insurance such as business interruption, flood or earthquake.
  • Purchase, install and pre-wire a generator to the building's essential electrical circuits. Provide for other utility alternatives and back-up options.
  • Consider using a security professional to evaluate and/or create your disaster preparedness and business continuity plan.

Emergency Planning For Employees

A business's most important and valuable asset is its employees. While certain procedures can be put in place before a disaster, it's also very important to know what people need to recover after a disaster. Best practice disaster preparations include the accommodation of two-way emergency communications systems. Ready Business' ideas that can be implemented include:

  • Providing emergency preparedness information in newsletters and other internal communications tools
  • Designating an out-of-town phone number where employees can leave an "I'm OK" message in a catastrophic disaster
  • Creating wallet cards with detailed emergency information and instructions
  • Appointing staff members to be responsible for communications
  • Providing appropriate plans and accommodations for any employees with disabilities
  • Frequently reviewing and practicing what you intend to do during and after an emergency with drills and exercises

Continuity of Operations Planning

This list on the Ready Business Web site consists of essential elements that a company should think about when developing its plan for business continuity. Go to Ready Business for more on each point.

  1. Assess how your company functions, both internally and externally, to determine which staff, materials, procedures and equipment are absolutely necessary to keep the business operating.
  2. Identify your suppliers, shippers, resources and other businesses you must interact with on a daily basis.
  3. Plan what you will do if your building, plant or store is not accessible. This type of planning is often referred to as a continuity of operations plan, or COOP, and includes all facets of your business.
  4. Plan for payroll continuity.
  5. Decide who should participate in putting together your emergency plan.
  6. Define crisis management procedures and individual responsibilities ahead of time.
  7. Coordinate with others, including businesses in your building, emergency managers, suppliers, shippers and others you do business with.
  8. Review your emergency plans annually. Just as your business changes over time, so do your emergency-situation needs.

© 2009, Reed Business Information, a division of Reed Elsevier Inc. All Rights Reserved.

 

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