Courting Disaster


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Talk about disasters! Dynamic Software Solutions got hit hard this year by three of the four alphabetically named hurricanes: Charlie, Frances, and Jeanne. The Accpac reseller is based in Miami, but it also has an office on the south side of Orlando whose roof blew off. The furniture and much of the equipment were also damaged, but the firm quickly rebounded, according to DSS president Peter Kaufman. "In hindsight, it wasn't a big hit because we were planning for it," he says. "Disaster planning is key."

Hurricanes are far from a new phenomenon in Florida, and many accounting and reselling firms were ready with disaster recovery plans that kept their businesses, clients, and fellow CPAs from going under with the flood waters.

Kaufman learned his lesson back in August 1992, when Hurricane Andrew struck. Then, DSS's only office was closed for three weeks since there was no power. Kaufman, also without power for the same period, found himself bouncing between friends' houses in search of air conditioning during the stifling Florida summer.

Partner Insights

One lesson he learned was that communications are extremely important-and this time, DSS was prepared.

All calls from the two Florida offices were forwarded to the New Orleans office. Email continued to flow and DSS still had international access, which was important since it has a substantial business in the Caribbean.

"When the hurricane watch comes up, everyone reports to the office," says Kaufman. "Everybody organizes their space. The first thing is put away all the papers. Everybody has laptops in our organization. We want it to go home with them," he continues. "The more you spread this stuff around, the odds of a total loss are much lower."

Although the data center is in a secure place, it was covered with tarpaulins. Tarps also draped the filing cabinets. The company made redundant sets of back-ups and also burned CDs of its critical accounting software, CRM systems, proposals, and other essential files. Copies of CDs went home with two different people. The company also printed out AP and AR aging reports, which were sent home with one employee.

Under Water

One of DSS's most important customers Deloitte & Touche in the Cayman Islands, was walloped by Hurricane Ivan. Still, Deloitte's state-of-the-art disaster recovery facility in Citrus Grove was one of the safest buildings on the island. Many Deloitte employees rode out the storm there with their families since Grand Cayman was practically under water.

The Florida Institute Lends a Hand

The Florida Institute of CPAs was on the front lines during the hurricanes. The FICPA set up a toll-free hurricane help line, along with a resource area on its Web site where it provided information for hurricane victims and CPA volunteers. The help line gave victims referrals to volunteer CPAs who could assist them with filing insurance claims, cash-flow planning, claiming casualty losses on their income tax returns, and other services.

Hurricane victims could also access an informational guide, "Disaster Recovery: A Guide to Financial Issues," which the American Institute of CPA and the National Endowment for Financial Education prepared for the American Red Cross on the FICPA's Web site.

Ken Strauss, a director with Berkowitz Dick Pollack & Brant in Ft. Lauderdale, helped write the disaster recovery guide. Strauss' Ft. Lauderdale office wasn't damaged by the hurricanes, but he says he was affected by "hurricane fatigue" from having to pack and unpack his belongings after each of the four hurricane warnings.

During hurricane season, the FICPA put together a network to assist CPAs with practice continuation or gave them actual office space, hooking them up with other CPAs who had spare office space.

For example, when Jeff Turner, a sole practitioner in Pensacola, was threatened with being displaced from his office after Hurricane Ivan struck, Julian Miller, stepped in with an offer to provide him with some spare office space.

However, Turner preferred to remain in his old facility. "The insurance company hasn't weighed in yet and the owners haven't made a decision on whether they're going to gut the entire building or not."

Before the hurricane, Turner made sure the equipment in his first-floor office would be safe from water damage by placing it on top of objects that seemed high enough so water couldn't reach it. "I didn't have any rising water in the office," he says. "There was some roof damage on the other end of the building, but this end was saved."

Many of his small-business clients were affected by the hurricane, and Turner has been attempting to help them procure Small Business Administration loans. But before anything goes wrong, Turner advises people to conduct an inventory of their property. "The better your list, the better you can get money from your insurance company," he says.

"Our building is incredibly resilient," says Jeremy Smith, director of the enterprise risk services team at Deloitte's Cayman offices. "There was minimal damage all around. It is one of the strongest facilities on the island, if not the strongest."

Deloitte also has a disaster recovery plan that was put into action ahead of time.

"The one advantage with a hurricane is you know it's coming and you get some prior warning," notes Smith. The firm had crisis management meetings during which it handed out assignments ranging from chartering a plane to arranging accommodations for staff and families.

As part of its preparation for problems, Deloitte performs regular tests and stores backups on and off the island. It also runs mirrored servers in its disaster recovery building and tests the capabilities for rollover and failover to other buildings. The core disaster recovery facility also contains a 1000 KVA (kilovolt-amp) generator that provided power to the five-story building for more than five days. "It was close to a week before they restored power to the core downtown business district," recalls Smith.

During that period, the area experienced about 15 to 16 hours of sustained 60 mph winds, with gusts over 200 mph. Venturing out of the building after the storm passed was hazardous with downed powerlines and debris everywhere. "People weren't able to just leave the disaster recovery center and go back to their homes, as most were badly damaged," says Smith.

However, Deloitte didn't just plan for itself-it drew on its expertise to help clients with disaster recovery and business continuity. Its enterprise risk services team focused on restoring the IT side of its clients' businesses, and helped law firms, banks, and fund administrators with their recovery issues. "We provided our clients with alternative space, for staff and IT equipment, so that they could get their operation back up and running," says Smith.

A Place of Refuge

Saltmarsh, Cleaveland & Gund, a Pensacola, Fla.-based CPA firm, owns a historic renovated building that has served as a storm shelter in the past.

"The staff would come in and ride out the storm," says firm president Ron Jackson. "It's a well-built building with a lot of brick and concrete that's been through 70 years of whatever you could throw at it. This time, we weren't so lucky. We had one of the biggest hurricanes, a category 3, which caused a huge storm surge as well as high winds."

Saltmarsh lost the roof membrane on much of the building, and in some places lost rafters, decking, and windows. Jackson estimates there was severe damage to as much as 70 percent of the building, including extensive water damage.

The firm had to move to another location in town to keep the business going, but was back up and running in just a couple of weeks, thanks to good planning and quick action.

"Our normal disaster plan would have been perfectly fine if we had not had such destruction," says Jackson.

At the new location, Saltmarsh had to settle for 14,000 sq. ft., down from 33,000 sq. ft. Only a few days after the storm, Jackson was able to find two floors in a building downtown that was almost completely empty. It took only two weeks for the firm to move into the space.

Because the firm is located at the top of "Hurricane Alley," Saltmarsh has long had an informal emergency plan. Whenever a storm threatens the area, employees place plastic bags over computers, move them away from the windows, and place tarpaulins over the file servers. Saltmarsh also has a calling tree, so after the storm staffers can be contacted. However, in the case of Hurricane Ivan, that plan had to take some unprecedented conditions into account.

"Typically, the phone service hasn't been out for more than two days in the 27 years I've been here," says Jackson. "In this case, the phone service was out for a week or more, depending on where you were located."

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