Smart Tech Spending
Smart Tech Spending is a podcast designed to help growth-driven businesses and mission-driven nonprofits gauge the success of their technology investments and overcome the challenge of measuring their tech ROI. Hosted by Nicole Lefsky, cofounder and managing member of Jersey IT Group, each episode features an interview with an executive or thought leader discussing topics like: Are you spending too much or not enough when it comes to technology services? How to avoid unplanned tech expenses? What technology drives profitability? This show is ideal for business owners, managing partners, CFO's and office managers who oversee technology spending for their companies.
Smart Tech Spending
How to Maintain Margins During a Software Outage
In this episode of Smart Tech Spending, I discuss the financial impact of losing access to essential software programs, following the global IT outage brought on by CrowdStrike. By answering a few key questions I share, businesses will be in a better position to maintain margins if they lose access.
What you’ll learn in this episode:
- How to measure the true cost of losing access to critical software programs for your company
- How long your organization can be "down" and its true impact on the bottom line
- Steps to minimize business interruption during an outage
As always - no tech talk!
Contact Nicole: nicole@jerseyitgroup.com
Connect with Nicole Lefsky: https://www.linkedin.com/in/nicolelefsky
Jersey IT Group’s Website: https://www.jerseyitgroup.com
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[00:00:00] Nicole Lefsky: What software programs does your company rely on to run? Could you continue business if you didn't have access to them? And if you could be down, for how long? Realistically, a few hours a day, a couple of days? I mean, have you considered what that would cost your company?
[00:00:18] Jersey IT Group: You're listening to Smart Tech Spending a podcast designed to help businesses gauge the success of their technology investments.
[00:00:26] If you're looking to overcome the challenge of measuring the ROI of technology tools and services, avoid unplanned expenses and uncover hidden costs, you've come to the right place. Let's get into the episode.
[00:00:40] Nicole Lefsky: Welcome to Episode 9 of Smart Tech Spending. I'm Nicole Lefsky and so happy to be with you today.
[00:00:48] I want to touch on what businesses can learn from a recent event that hit every news station from New Jersey to California and all around the world because it affected thousands of businesses and I bet you know what I'm talking about. It's the recent CrowdStrike Microsoft impact or what was referred to as the global IT outage triggered from an update that cyber security company CrowdStrike implemented and that update didn't work well with some Microsoft systems.
[00:01:19] So, it caused the computers that were running both of them for many people to fail or get a blue screen. They couldn't do any work. Some of the industries that were affected were banking, healthcare, court systems, airlines, retail businesses, you name it, they were affected. In fact, I'm still learning about different businesses, small, midsize, and large companies that may not have hit the news, but they were certainly affected by this outage.
[00:01:46] So, I happen to be traveling when the outage happened. I was in a store and the cashier said to me, I tried to use a gift card and the cashier said, "I'm sorry, you know, that system isn't working as a result of the I. T. outage and I'm waiting for it to come back up and it's just not coming up." So I thought that was interesting.
[00:02:04] And then I, like many, I was supposed to fly that day. I did, my flight was just delayed, but what was interesting was I got a text from the airline saying that the flight status would not update correctly on the website, the airline's website. A couple of hours later, they sent me another text saying that they had an alternative website, like a backend website that they wanted to direct customers to where we could see the status of our flight and see, you know, the actual time it would be taking off.
[00:02:32] So kudos to some airlines who were able to put in place or already had, as part of their disaster plan, a backup system that would not only hold their information, but more importantly, be available to customers, the people they service to use in the event of this type of outage. So my question for you is, have you ever asked yourself what would happen if your company had a system outage?
[00:02:56] Now, look, there are many types of outages. There's power, there's internet, phones, and then there's critical software programs. And in this case, it wasn't a cyber-attack. It wasn't power. It was a software program that wasn't working and it crippled some businesses.
[00:03:14] So in this episode, we're going to focus on losing access to a program that's essential in running your business. Think for a minute. What software programs does your company rely on to run? Could you continue business if you didn't have access to them? And if you could, be down, for how long? Realistically, a few hours? A day? A couple of days. I mean, have you considered what that would cost your company?
[00:03:41] Yes, you might have business interruption insurance, but do you really want to go through the havoc of dealing with that? And is that really going to cover all the direct and indirect costs that you might suffer or your team would suffer?
[00:03:52] So I put a little example together, and we're going to use an example of a company that generates $2 million in annual revenue. Okay. A company of that size is losing Just under a thousand dollars an hour if they're down. If they're down for eight hours, one general work day, I don't know who works eight hours anymore, but if someone still works eight hours, that's over $7,500 lost. Really give this some thought at first, you know, you'll probably think sure we could live without access for a short period of time, but odds are if you're like most, once you sit down and give it some real thought, you probably have more programs you rely on than you initially thought and you probably couldn't go that long without being able to access them.
[00:04:40] And I can tell you from years of working with businesses, when I first sit down with them and we get to know each other and we get to know the details and ins and outs of their business, years ago, they used to say, "Oh, if the Internet went down, we'd be fine. We could function." In the event that they're actually down, you know, uh, a poll that provides internet service that's key to their, their service provider gets knocked out due to a car accident and they're very upset because they can't access what they need to access. So I know firsthand that timeframe that everybody talks about that they can be down is not realistic. So let's give that some real thought.
[00:05:14] Now, when you start to think about what programs you depend on in your business to run it, you have to think about how many you have. And I want to help you dive into that a bit further so you really think this through. Have you considered how you would service your clients if they didn't have access to these programs? If you could, how would you do it differently? You know, is there a manual way to service your clients or access their information? Is your staff trained on this alternative way - this manual system? Is it documented anywhere? And here's a good one. Can you access where it's documented if your system is down?
[00:05:51] And if you do rely on key programs to operate your company, there are a few things that you can do now to help prevent or at the very least minimize the interruption of your business if there's a system outage affecting important apps or programs that you use.
[00:06:05] So first, let's start by thinking about who's going to be involved with this process. I would recommend gathering a representative from every department from your company. We're talking about management, of course, sales, HR, finance or accounting, purchasing, compliance. However, your organization is divided. You really have to look at representation from all of them. You need this feedback to be honest, and you need it to be cumulative. If you're a small organization, bring together your key personnel and your management to begin identifying all of the programs so you don't miss anything.
[00:06:42] Include services that you subscribe to and key tools that your organization relies on to operate. Now, you should always include your managed service provider, of course, your IT company, because they'll be able to provide a lot of insight during this process and they should be maintaining a fairly robust list for you that you can start with of all of the applications you're currently utilizing and other helpful information that we'll talk about in a few minutes.
[00:07:06] Initially, you'll probably think right away about your company's most important app. You know, what program do we really need to run the business? Then as you open up the conversation with different members of your organization, you'll see that every department utilizes programs to run. They may not be of equal importance, but they're all essential in their own way.
[00:07:26] So when you give it further thought, you'll think about HR and financial departments. They rely on applications to verify prior employment, to do background checks, process payroll. I mean, I could go on. The sales team, they probably use a customer relationship management tool, a CRM or billing program, and without access to it, they can't close new business. They can't invoice existing customers. If you are a healthcare provider, what if you can't access your electronic health record system or practice management software or order necessary supplies for your patients? What if you're an accountant and it's tax season or it's extension time and you can't access QuickBooks or your Creative Solutions suite?
[00:08:09] After listing all of these programs and services your company depends on to operate day to day, then your team should look at whether or not there's a way to manually do the tasks that these systems help you do. Then, consider how long this manual system can be sustained, realistically. What will the transition back to having access look like? Who will be responsible for transferring all of the information that you obtain manually back into your system once it's up? Is there a time frame that needs to be met for compliance or something that you need to consider with respect to what is required within your industry?
[00:08:49] You know, taking these initial steps and answering these critical questions will help you get your company on its way to maintaining business during an outage and minimizing financial loss.
[00:09:00] I hope you found this episode to be helpful as always.
[00:09:03] Feel free to reach out to me on LinkedIn or by email with any comments.
[00:09:08] Jersey IT Group: You've been listening to Smart Tech Spending, hosted by Nicole Lefsky. Make sure you never miss an episode by subscribing in your favorite podcast player. And if you enjoyed this episode, we'd appreciate it if you'd rate and review the show.
[00:09:21] Thanks for listening.
