Weathering the storm: Hurricane preparation key for South Florida businesses
Hurricane preparation has become an essential part of doing business in South Florida, as companies search for high — and low-tech — solutions.
08/23/2012 5:00 AM
08/23/2012 5:41 PM
Compuquip Technologies can’t stop for storms. The Doral company handles outsourced information technology tasks for other businesses and receives about 3,000 telephone calls a day for customer support. That’s why cautious Compuquip keeps copies of customer records, software applications and other computer files on remote hardware in a windowless, multi-tenant data center designed to withstand a Category 5 hurricane.
"Our team could run our company out of a Starbucks or out of a hotel or anywhere there is Internet access," said Eric Dosal, president and chief executive officer. "In the event our office goes down, we have multiple options."
Low-tech precautions are critical to business continuity, too. Even the simplest errors in hurricane preparation can undo sophisticated efforts to minimize physical, digital and financial damage to a business . If a Category 1 storm or worse approaches, for example, Compuquip’s managers will remind employees to buy as much gasoline as possible so they can use mobile-phone battery chargers adapted for cars.
"We went through this with Wilma," Dosal said, referring to the 2005 hurricane that caused a multi-day electricity outage throughout South Florida, leaving many gasoline stations powerless and out of service. "When we get a hurricane advisory, we tell employees to fill up their tanks."
Good planning in the event of a bad storm is imperative for all enterprises and their employees, Richard Knabb, director of the National Hurricane Center, advised recently during the Miami Chamber of Commerce’s annual hurricane-preparation seminar.
"The worst possible thing you can do is not have a plan . . . I can assure that at my house and at the hurricane center, we have a written plan, and I implore you to do that," Knabb said. "If you don’t know what you would tell your employees, if you don’t know if you have enough of the proper insurance, if you don’t know if your business or home is ready to take the winds of a hurricane, if you don’t know if your home or business is in a storm-surge evacuation zone, find out all those things, and write down what your plan is going to be."
Contingency planning is especially crucial for companies like Compuquip that can’t afford to go down for long. But almost any enterprise can become better prepared for a major storm without spending a small fortune.
Businesses should avoid the temptation to "over-engineer a solution that’s way too expensive and ends up on a shelf," said Stefan Pittinger, vice president and general manager of the South Florida operations of Peak10, which helps businesses protect themselves from natural disasters and recover afterward.
Insisting on zero downtime and instant post-hurricane access to information technology may be overkill, depending on the business. "You need to identify, within your IT infrastructure, what you can do without for an hour," Pittinger said. "What can you do without for two hours? What you can do without for a week or two?"
Pittinger said companies typically want instant access to their most critical information technology in a disaster, so "the point-blank question is: What’s critical? The answer every single time is: Everything!" But companies usually lower their standards when they learn "it’s going to cost this much to get your operation up and running in 15 minutes, or this much in two hours, or this much in two days," he said. "Suddenly, everything isn’t critical when you have a price point next to that."
Experts said that addressing five basic areas can help companies ride out a storm: ensuring computer-system redundancy; having access to phone service and the Internet; alternative power sources; insurance for storm risks; and delegation of post-storm duties to employees.
Businesses commonly guard against the risk of power outages on their premises by backing up their computer systems. Many have turned to automated online processes that regularly back up, or replicate, their computer systems on external hard drives in remote data centers, collectively known in high-tech shorthand as "the cloud."
Some businesses use the older, more cumbersome routine of putting backed-up versions of their computer systems on disks or tapes, then trucking the backups to remote storage facilities they control. "There’s nothing wrong with that, the only problem is, it becomes very costly," Dosal said. Nevertheless, "some people want to keep stuff in their facility. They don’t trust the cloud" due to security concerns or other reasons. "Even some of the largest companies, they’re not sending their stuff up to the cloud."
In a hurricane zone, however, keeping a computer system and its replicated twin in the same office is riskier in many respects than storing the twin separately in a storm-proof bunker. That’s one reason why many businesses in South Florida have turned to the cloud, or bunker-style data centers with fortified space, where tenants install equipment to back up their home-office computer systems.
Related services usually are available, too. Some data-center operators, for example, provide limited seating and Internet connections inside their facilities on an emergency basis to employees of powerless client companies.
Users of smart phones can prevent the loss of photos, phone numbers and other bits of personal stuff on these devices by backing them up to a cloud with the help of such remote-storage operations as iCloud and DropBox.
"All our emails and contacts are on a cloud. We use Microsoft 365 for that," said Robert Plessett, managing partner of TeleSwitch, a Miami company that sells integrated telephone, video conferencing and surveillance systems to commercial clients. "So if I don’t have power here, if I don’t have Internet access, I can go someplace else and I can still get my emails on my phone."
Terremark, a Miami-based subsidiary of the wireless telecom carrier Verizon, operates one of the most connected data centers in the world, the carrier-neutral, 750,000-square-foot Network Access Point (NAP) of the Americas in Miami. Leading telecom carriers and Internet service providers have connected more than 140 countries by co-locating switching equipment at the multi-tenant NAP, which also serves as a remote, secure location for computer-system backup.
"To build and operate your own data center is the most expensive option," said Tom Mays, senior vice president of advanced data solutions at Terremark and head of its disaster recovery business. "Customers can save a significant amount using the cloud . . . The benefits of the cloud come from the fact that it is multi-tenant. We’re running multiple customers on the same infrastructure, and everybody is getting kind of a cooperative benefit."
Mays advises business managers shopping data centers to ask questions about their security systems and procedures and about their track record in actual disasters: "Is the provider not just an infrastructure provider but also a disaster recovery expert? Is it somebody who has a lot of scar tissue around what can happen in a real disaster situation?" He also said it’s helpful to know the density of a data center’s connections to carriers of telecommunications and Internet traffic.
Some businesses purchase disaster recovery as a fully outsourced service from such data-center operators as Terremark, Peak10 and Quality Technology Services (QTS). Terremark, for example, will deploy teams with the expertise to manage the recovery of storm-battered businesses until normal operations resume.
"In a real disaster situation, a lot of times the customer’s key personnel aren’t available," Mays said. "So it’s really better for most of our customers, especially here in South Florida, if they can just pick up the phone and call an expert team."
No backed-up version of a computer system is worth much without being able to access it, especially via smart phones, laptops, tablets and other wireless devices, which mobile employees increasingly use for online access to their companies’ data and software. Wireless devices could prove more vital than ever if South Florida’s next hurricane takes the usual toll on land lines for electricity, telephone service and Internet access.
Texting often is more effective in the immediate aftermath of a hurricane than attempting voice calls, which may involve repeated tries due to network congestion.
"A text will queue up in the system," said Tampa-based Chuck Hamby, regional public relations manager for Verizon. "You don’t have to try and try again."
But the high-tech power of wireless communications is vulnerable to some low-tech risks. One is plain water. Water-damaged smart phones can get stupid in a hurry. Exposure to rain can render them inoperable and make photos, phone numbers, apps and other stored stuff disappear. So smart users keep smart phones dry. Kelly Starling, for one, takes her mobile phone along with her when she jogs but takes no chances if rain seems imminent.
In cloudy weather, "I run with my iPhone in a plastic baggy," said Starling, the South Florida public relations manager for telecom carrier AT&T. "I put it in a Ziploc so I don’t get water damage."
Land-line telephones sometimes work immediately after a hurricane, but cordless models that need electricity may die soon after a power outage begins. "We have two cordless phones in our house, but I also have a good old-fashioned Princess phone that’s hanging on the wall," Starling said. "Cordless phones don’t do you any good if you don’t have power."
Charging one or more spare cell-phone batteries and keeping a car charger handy are pre-storm precautions worth taking. "You can even get disposable cell-phone batteries now at some convenience stores," Starling said.
Be aware that battery failures in some wireless devices may require a replacement of the whole device, not just the battery. Apple Computer declares on its website, for example, that its "battery replacement" policy requires a customer to ship an iPhone or an iPad with a dead battery to the company in exchange for a replacement model with a working battery but none of the customers’ personal files or software applications.
Electric generators for commercial use include 15-kilowatt models for small offices and 60-killowatt models for warehouses under 10,000 square feet, said Gabriel Lopez, sales and operations manager at General Power Limited, a Miami-based distributor and retailer of generators.
"For high-quality products with heavy-duty engines that can be used 24/7, the lowest prices are in the range of $10,000 with basic specifications like weather-proof and sound-proof enclosures," Lopez said. "In the 60-kilowatt range, you’re going to be talking about $19,000."
Built-in fuel tanks with enough capacity for 10 hours of operation are standard features. With an external fuel tank, some diesel generators can run up to five days without a refill. Another accessory called an automatic transfer switch will start an electric generator as soon as Florida Power & Light service ends. Lopez said the switches are sold separately at prices starting around $600 and ranging up to $2,500 for medium-size models.
A cheaper tactic is sending employees to restaurants, libraries and other public places where electricity and wireless Internet access may be available after a hurricane. If Doral-based Compuquip Technologies loses power in a hurricane, some employees are instructed to go to specific Starbucks coffee shops to try to use their cell phones and laptops.
In a widespread power outage, Florida Power & Light routinely restores electricity first in areas where public safety facilities are located.
"We have to get hospitals back on, we have to get police and fire, we have to get water and wastewater facilities back on. They do receive priority," said Keddy Bostic, an FPL spokesman. "Wilma also taught that we have to get [electricity] back on major thoroughfares. We bring up those quickly. We bring up grocery stores, gas stations, in order to give the community a chance to start rebounding."
Some companies count on generators in a power outage as a supplemental source of electricity, not the sole source. One of them is Frank H. Furman Insurance, which lost power but not customers during Hurricane Wilma. Within 24 hours of Wilma’s landfall, Furman Insurance took pre-arranged delivery of a trailer with a portable office inside, enough seats, desks, telephones, electrical outlets and Internet connections for 19 employees. While some employees processed claims in the trailer, others next door in the home office gradually brought the insurance agency’s computer system, phones and copiers back to life with two small gasoline-powered generators.
That plan allowed Furman Insurance to handle a mountain of post-hurricane work, not only processing claims from owners of damaged properties but also issuing new coverage for contractors to rebuild, and the agency is prepared to do so again with the help of its disaster recovery service, Agility, said Dirk DeJong, the company’s president and chief operating officer. "We pay them a monthly fee, a very minimal fee, to be on a disaster call-up list, so in the event we can’t operate, they’ll come in and get us operational within 24 hours."
Multi-risk commercial policies for smaller companies known as BOPs, short for business owner’s policies, usually combine property and liability coverage with business income insurance, also known as business interruption insurance. This type of insurance covers the loss of business income, which can be worse than property damage for a hurricane-struck enterprise. But it may be unavailable, depending on a company’s location.
Business interruption insurance reflects the lofty price and limited availability of windstorm insurance in South Florida, especially coverage for companies near the coast. "West of I-95, I can get business income insurance much easier," DeJong said. "If I’m east of Federal Highway, and I have a BOP policy with ABC Insurance, they’re going to cover me for business interruption, but not for wind if a hurricane comes."
Companies can hold down their premiums for business interruption insurance by limiting the maximum payout. Some smaller businesses, for example, are content with coverage in the range of $250,000 to $500,000. Another way to hold down BOP premiums is increased fortification against hurricane damage, which also reduces the risk of a business interruption.
"Would putting on a new roof be beneficial? Chances are that would be, because that’s one of the key things that underwriters are going to look at," said Christina Royer, a vice president in the Fort Lauderdale office of Seitlin Insurance and Advisory Service. "Any betterments you can make will influence how you look to an underwriter."
Royer, who heads the risk management unit at Seitlin Insurance, also recommends that companies negotiate expanded terms for business interruption insurance to cover costs not generally included in standard coverage, like claim preparation fees.
"If you have a loss and you’re going to need forensic accounting experts to prove up your loss, that is coverage that you make sure you address in the policy," she said.
Royer, who advises keeping current insurance policies for property, equipment and vehicles in a dry location, said her personal insurance policies at home are secured and set for travel: "I keep those in a plastic container, and I keep all of the information I’m going to need in a suitcase, so if I have to go, it’s ready to go."
Royer said property insurance commands plenty of attention, but too many South Florida businesses do piecemeal planning for a hurricane.
"Insurance is certainly an important component, but I think where most businesses, both large and small, go wrong is not really mapping out a disaster plan and business continuity plan,” she said. “They haven’t internally, from an operational standpoint, determined how they’re going to do that."
An advance hurricane response plan for employees will maximize efficiency and promote recovery when one actually hits, note business leaders. Set up emergency delegation of duties to handle such storm-related issues as damage to business premises and contents, including computers and phone systems, and external communications with customers, suppliers, vendors, lenders and insurance agents.
Management should share personal contact details with employees to ensure post-storm communications. "Make sure they have your mobile phone number so they can text you back," said attorney Kevin M. Levy, who moderated a panel discussion on hurricane preparedness at a Greater Miami Chamber of Commerce event on June 14.
Encouraging employees to make their own personal preparations for a hurricane should be an integral part of a company’s hurricane plan as well.
"Disaster recovery is about: ‘How do we get back to where we were before?’ " said Levy, of the law firm Gunster, Yoakley & Stewart. After all, no employee of a storm-battered business can contribute professionally, Levy said. unless personally "you’re under control and you’ve got yourself taken care of."
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