The Canterbury earthquakes taught valuable lessons about customer tolerance.
What sorts of situations did SMEs find themselves in after the quakes?
The earthquakes were a perfect storm for many businesses. Not only were their operations severely affected but so was their ability to call on outside help from suppliers.
Companies suddenly found themselves without access to their offices, IT systems, and critically, their backups. This meant they had no or limited access to data, including contact, email and financial systems, all of which restricted their ability to communicate with the outside world and continue to operate.
What did business continuity businesses like Plan-b do to help?
Plan-b's role was to keep our customers operational. This meant providing the core and essential services of every business; for instance, somewhere to work, computers, email and business systems, and phones to communicate with customers and suppliers. This was delivered from the Plan-b business recovery facility in Middleton and a temporary facility for an additional 150 people set up near the airport.
Why did so few companies actually go under despite the disruption?
One of the most significant lessons learned is that customers are far more tolerant of an interruption to service during a citywide event such as an earthquake than they are if it is just your business that is affected. After all, they have probably been affected too. This tolerance, together with government and local government support, including from the Department of Inland Revenue, chambers of commerce and the whole country, played a huge part in softening the blow. Ultimately it enabled businesses to get back on their feet and weather the storm.
If you analysed the stats of the same number of businesses that suffered similar disruption to their operations as those in Christchurch, only as isolated incidents rather than a wide-scale event, you would see a very different and somewhat tragic survival rate.
What are the more common gremlins which upset SMEs' business continuity?
Some of the biggest challenges businesses faced after the earthquakes centred around communications.
With access to their data compromised, their ability to communicate with customers, suppliers and other stakeholders was severely affected.
Furthermore, contrary to the popular "we'll work from home" theory, without an office to work from, their ability to communicate with each other and make decisions was also affected. This resulted in a significant decrease in productivity and increased their recovery time.
One of the biggest mistakes most businesses made was not having a business continuity plan that was current and tested.
This meant that they were having to do things on the fly, which affects your overall recovery time.
Another key factor was knowing all the facts about your insurance. Many businesses came unstuck believing they had cover when they didn't.
What mistakes do SMEs make when protecting themselves from these? And at what cost?
The biggest mistake any business can make is to underestimate the value of its data. Typically, intangible assets such as data make up about 80 per cent of a company's value. Data cannot be insured for its true value or replaced, so it is critical that it is protected, backed up to a secure alternative location and most importantly that it is recoverable.
Ian Forrester is managing director of business continuity specialist Plan-b.By Ian Forrester