Hurricanes Katrina and Rita have been tragic events in the lives of many Americans, causing the loss of possessions and in some cases, family members. Yet, as the story continues to unfold we have become aware of how unprepared small and medium businesses (SMB) were for this catastrophic event. This is a wake-up call for small and medium business; data is a critical part of your business success and must be safeguarded. It doesn’t take a hurricane to put your business at risk. If, for any reason, you cannot determine what stock you need to order or invoice customers, for example, you face losses. Customers, who depend on you and your products, will not be customers long if they cannot depend on you to deliver. Still, many SMBs have failed to grasp the important role technology plays in their business operations.
Let’s look at some facts:
- Computer downtime costs U.S. business $4 billion per year, primarily through lost revenue.
- After a disaster, 43% of businesses never re-open and 29% close within two years.
- Human error accounted for 34.4% of business interruptions in the past five years
- Power outages account for 29.48% of computer outages.
Power outages and human error happen every day to businesses everywhere. As a small to medium business, you have the added challenge of not having enough qualified people to manage your IT. All the more reason to take notice; you are responsible for your digital assets.
What are the key issues confronting SMBs with respect to their technology? At Cougar Mountain we have seen some key issues relating to organizations’ accounting data:
A recent survey by Gartner showed that 61% of CIO’s felt that they did not have enough people with the right skills to meet the IT challenges they face. If large corporations are challenged, what chance do you have? Most SMBs do not have full-time IT staff. Those organizations that do have IT staff face the additional task of keeping staff skills up-to-date on everything from telephone systems to networking, databases and business applications. Twenty percent of CIOs at large companies say that business process improvement is their priority task. Surely this is just as important for SMBs. If staff is a critical issue that is difficult to solve, shouldn’t you be taking steps to mitigate the problem? Your digital assets will not be secure until you reduce your dependence on staff with hard to find skills.
Over half of all SMBs do not back up their mission-critical accounting data or fail to do so correctly. Some common scenarios include:
- Backing up the data on the same machine. When the machine fails, all the data is lost or must be recovered through expensive recovery services.
- Back-ups are made on old media. It is not unusual to find organizations that have been backing up their critical financial data onto the same one or two tapes for several years. Most times they never check the back-up quality and may not actually have a back-up at all.
- Back-ups are made on a single tape. If there is a power failure during the back-up, what happens? The source and the back-up data could be corrupted, resulting in total data loss.
- Back-ups are maintained at the same location as the data and face the same risks as the original data in fires or natural disasters.
The number of SMBs who actively manage security is in the minority and often is limited to restricting access to the entire system to those with a password. Once in, users have access to the entire system, regardless of their job title or function. In an audit of two retailers with multiple outlets we found key access lapses specifically related to accounting data:
- No user rights within applications. Every user had complete rights to every function. Including the right to re-configure the accounting system. Users included many part-time staff with little or no training.
- Common sharing of user IDs and passwords resulting in no accountability for data.
- Non-accounting users could access the accounting data with other data query tools.
If human error accounts for more than one-third of all data loss/corruption, then rudimentary steps that secure your data are essential. It is your responsibility to keep your data safe.
4. Multiple Vendors
In today’s technology environment it is impossible to get a business solution, such as an accounting system, from a single vendor. There is the application software of course; but what about the hardware, operating system, firewall, virus protection and the installation and training? They are all part of the solution. Many go it solo or buy on price alone, not realizing the importance of technology to their business. Often, SMBs rely on value added resellers (VAR) for assembling a complete solution. While it is valuable, even essential, to have a VAR, they have a myriad of products they must assemble into your solution. Even with the best VARs, there are times when pulling all the hardware, operating system, and business applications together and getting them to work can be daunting. An established example to the complexity of the systems inter-dependence is the frequency that Microsoft releases security updates without notifying either hardware or software vendors. The result is that systems, such as your accounting software, stop working. Who is responsible for making it work? It’s you!
5. Multi-Purpose Servers
Today, it is almost the norm in SMBs to operate much of the business with no central server or a single server managing all the company’s digital assets including email, customer relationship management, accounting, desktop publishing and sometimes even website hosting. Each vendor has hardware requirements: processor size, memory and disk storage capacity. But what about when you run them all at the same time on a single server? Often the software vendor gets blamed for the performance when an overburdened environment is the problem. As applications get more complex and SMBs demand more out of their business applications, such as accounting, they need to take a responsible approach to managing the number of tasks a server can be expected to manage simultaneously or dramatically increase the capacity of the server.
6. Multi-location Access
For many SMB owners and senior managers, the day doesn’t end at five o’clock. However to continue working means you are tethered to the data located in the office, reducing time with the family. Remote access to the applications, allowing you to work at home, introduces a level of complexity and costs that many SMBs are unwilling to accept. The issues are similar for opening additional office or store locations. In addition, software may require additional software licenses for each location. The cost and complexity of remote and multi-locations can have a negative impact on an SMB owner’s quality of life and ability to grow their business. It shouldn’t.
Today, when we need a new toaster or refrigerator, we go the store and buy it, take it home, plug it in and it works. Great concept, a device that you plug in and it performs a specific function for you, like making toast or keeping your food cold. Why shouldn’t the concept extend to business application software such as accounting or point of sale? Technically there is no reason. The concept of “appliance computing” has been around for a several years although it is mainly associated with running applications over the Internet. Certainly the Internet is an important aspect but the real focus of appliance computing has been a device (computer) for a single purpose, such as running your accounting and point of sale. The device is your server storing both the programs and data, and a means of securely hosting remote users and locations. Local users, those at the same physical location, will access this single purpose device like any other server. Remote users could access the server using virtual terminal technology, a concept that requires broadband access and almost any Windows 98 or later computer for the remote user. As a device that is specifically built to run a single application, the maintenance, and therefore the staff support requirements drop dramatically. It is possible to install a server and set up all users in less than an hour. Maintenance involves setting up users and back-up. At first glance, this is an expensive alternative to traditional approaches because of the requirement of a dedicated server. However, when the cost of an equivalent solution, custom built for a customer and the ongoing staff and associated maintenance services, an appliance solution can have a significantly lower total cost of ownership and a higher rate of reliability.
Secure data storage and back-up are critical to the health of your business, and secure remote access is fast becoming another essential. A dedicated, secure application server can help small business owners accomplish all of these at a low total cost of ownership. Take the time now to asses the security of your accounting data by reviewing:
- IT expertise to support your accounting system everyday and during a crisis
- How backups are stored and integrity of the data
- Data access and security levels for staff
- Hardware and software compatibility
- Server capacity
- Planned growth and flexibility
SinglePoint by Cougar Mountain is a concept that delivers the promise of appliance computing to the accounting software arena. Developed in association with Applianz Technologies, SinglePoint provides a robust accounting solution in a secure environment for small and medium businesses. Visitwww.cougarmtn.com for more information.