According to a recent survey conducted by Epicor Software Corp. Yardley, Pa., (recently combined with Activant Solutions Inc.), many distributors do not have comprehensive safeguards in place to protect their business data in the event of a disruption to their enterprise resource planning (ERP) system. “Business continuity should be a very serious concern for distributors,” said Kevin Roach, executive vice president and general manager, Wholesale Distribution, for Epicor. “Data loss is a cash flow killer.
“Research has shown that on average, every hour that your system is down costs your company $80,000-plus in lost sales and productivity. The reality is, we've seen distributors without a data backup plan or warm failover solution go out of business because they're unable to get back on their feet after something as common as a hardware failure.”
More than 60 percent of distributors who completed the Epicor survey to obtain a personalized “Business Continuity Scorecard” for their company did not have a redundant Internet connection or an offsite copy of their data available for failover to a standby system, and the vast majority (87 percent) did not have a formal crisis management plan in place. Most also did not regularly test a data restore from onsite or offsite backups, or regularly review and test their uninterruptible power supply (UPS) requirements to avoid the risk of a power shutdown.
According to Dan Heulitt, director of technical services, Wholesale Distribution, for Epicor, “No matter what industry you support, or what marketplace you cater to, consistently servicing your customers in a timely and professional manner is the #1 rule that you never break. Rule #2 is it's all about the data. The best continuity plans prepare for an unexpected outage, because history suggests it's not if, but when your company will experience a data loss. Therefore, it's vitally important for a company to have two data retention policies in place: onsite for level 1 data corruption and quick-recovery outages, and offsite for level 2 or unexpected prolonged, catastrophic outages.”
Contrary to popular belief, the survey found that natural disasters were not the main threat to business continuity. The results indicated that for the 50 percent of distributors that had experienced a disruption, hardware failure was actually the #1 cause of data loss, followed by user error.
Says Heulitt, “It's important to note that today e-commerce is just as vital as the traditional ERP system. Having a business continuity plan to keep your Internet/global presence functioning could be as simple as having a redundant Internet connection. And no matter what data retention policy is in place or what your e-commerce strategy is, testing has to be done quarterly, with results being shared with everyone in the company.”
On the positive side, more than 90 percent of the distributors surveyed did have a consistent data archive strategy, and the majority employed daily business data backups, redundant hardware and dedicated power outlets in their server rooms, and monitoring software to provide notification of potential network or hardware issues.
However, the survey also suggested that as many as one-third of distributors do not conduct offsite and onsite backups of their database, and only half are doing a daily backup to an offsite location.
“Ideally, the backups should be happening in real time to ensure zero data loss,” said Heulitt. “Offsite backups are necessary in case your building and its contents are damaged due to catastrophic events, rendering your onsite backup useless. In some cases, we have found that alerts for failed backups end up going to an inactive e-mail address. Of course, that doesn't do anyone any good. Best practice is to send the alert to a group e-mail.” Speak with your Activiant/Epicor account manager for more information on this survey or request a copy at www.distribution.activant.com/contact-me.