What is the real cost of a computer crash?

The big news in bad IT this week is Virgin Blue, who was forced to cancel flights after their airport check-in system failed for 21 hours – as reported on Monday here.

The question we don't see answered yet is how much this glitch will actually cost the company. Bear in mind this is a large public company that is constantly under scrutiny by press and media. There are, of course, the immediate costs of fixing the glitch, the cost of not getting people onto flights, the cost of hotels for stranded passengers, and then – if we look deeper – the ancillary costs such as stressed employees and damage to the brand.

No doubt the cost of this glitch will be significant; possibly higher than the cost of implementing a more robust IT system in the first place. Unfortunately, hindsight is not a replacement for failover systems. To make it worse, the system was outsourced to a third party who should have invested in robust systems.

Sure, in our SME businesses we can have our systems down, and hardly expect it to make the local paper; let alone the national media. But, this was just short of a day of downtime for Virgin Blue, and the fallout from it has been extensive. I'm sure they had a disaster recovery path planned and tested for this system, hence why the outage was only measured in hours – not days or weeks.

So, how would your business cope should your computer systems fail? Do you know where your recovery systems are, or how long it would take to bring them online? Do you have people who know what to do in the event of a major glitch? Have you checked the quality and capability of third party providers?

Unfortunately, most SME businesses do not have a monitored backup system – if they even back up at all. Even fewer have a structured path to recovery.

Most IT providers that work with SME clients sell backup tools and methods, but very few discuss recovery. Several years ago, I would have argued that this was dangerous, but probably cost justified in small business, as the cost of building a recovery option was high and the manual processes of rebuilding over a few days could still be used. However, in the almost nine years that I've been in business, computers have penetrated further and further into businesses and have become entrenched in our communication and production cycles. Today, we are so dependent on our PCs that business simply comes to a standstill when computers fail. This means that we now need a structured recovery solution, despite the cost of building and maintaining it.

The good news is that, in recent months, the cost of having offsite recovery options has come down in price to a point where any sized business can find an affordable solution to the recovery issue.

Examples of the technology options vary enormously, and it's important to understand why the cheapest offsite backup options may not be right for your business, in terms of recovery cycles. Just having files offsite is no longer good enough. It's time SME businesses started demanding a recovery time as part of the proposition, including a commitment that data of a certain age will be up and running within a certain amount of time.

Many of the online do-it-yourself repositories take days to get your data back to you. But, there's currently a revolution in this area of technology, and it's about to go another step in just a few months. Many large hosting organisation such as PacNet and other ISPs are about to offer businesses the opportunity to store backup solutions in their data centres, and have failover servers on standby for almost instant recovery. At the moment, these services are available from smaller providers, but the quality of the service is less than top notch and the prices are relatively high.

Soon, the quality will improve and the price will drop, as large companies bring competition to this lucrative market. It's already a huge business in America where broadband is faster and cheaper than it is here (don't get me started on why we need some form of NBN soon!).

Ultimately, make sure you're investing not just in backup, but also in a recovery solution that will get your complete systems back up and running in hours – not days or weeks. Then ensure you have them tested, and keep testing to ensure all your systems can be recovered and scripts are updated regularly.In summary, what we can all learn from Virgin Blue this week is:

1. Have offsite backup that is a full system snapshot.
2. Ensure there are disaster recovery capabilities.
3. Run a test of the recovery.
4. Script the process.
5. Keep testing and updating.

As always, there are multiple levels of solutions and a huge array of price points. If you're not sure of the level of cover you need, seek a knowledgeable advisor.

Click here to read more IT Systems expert advice. David Markus is the founder of Combo - the IT services company that ensures IT is never an impediment to growth.

As a company director, how do I protect myself from employees who want to collect $20,000 rewards for my software piracy?

This week’s question came up in response to this article, about dobbing in your company for software fraud. It’s a tough call when staff can install programs and the company owners become liable.

Before you dismiss this threat, ask yourself this question: Do all of my staff love me, even the ones who left over the last few months?

There are, of course, arguments for using free open source applications to avoid licensing costs. But, there are downsides to those solutions in terms of needing to train staff on unfamiliar applications and spending time fudging processes to replicate the functions in more expensive software. This is not an argument I like to get into, as there are multiple arguments in either direction for every tool we might choose to use. At the end of the day, there is always some tool a business should use to improve productivity that isn’t free. And so my following comments are important to note...

In small to medium businesses, I’ve seen that the worst culprit of fraudulent software installation is often the in-house IT guy who wants to get the work done, but doesn’t want to ask the boss for more dollars. So, trying to be helpful, he grabs an illegal copy of that software the worker needs and sets it up for them.

I have also seen staff brining software from home and installing it themselves so they can do the work they need to do without delays. Without stringent IT security measures in place, this can happen all too easily. Often this software is still in place long after the offending staff have moved on.

This is just another reason why, as a business owner or company director, you should consider getting a reputable firm to do a software audit of your systems to make sure you’re compliant. If you then have your systems monitored and managed by an external source, you can be alerted to the installation of any new software and check whether or not it is legal.

Today’s management tools are designed to keep a watchful eye over your systems to prevent issues such as license key duplications, or cracked license codes. They also monitor machine resources and security breaches.

I also suggest that while you’re having a licensing audit done, you also have a backup and recovery audit done to ensure your IT resources can really guarantee that you’ll recover from a data incident. Many IT guys in the small business world underestimate the importance of backup, and design minimalistic solutions that leave out the opportunity for a speedy recovery even if the data files are available.

Independent audits will cost you money to have done properly, but if you go to a reliable source you will learn something that gives you a great return on your investment. There is no such thing as a perfect IT solution in a small business environment as we just can’t afford to do it all. So, it’s always good to review and prioritise the shortcuts and the needs for expenditure.

If you run an audit and all you learn is that you’re happy with the compromises you’ve taken and the position you’re in, the peace of mind will have been worth the expense. This will allow you to stop worrying about the elephant in the corner, and get on with building your successful business. Without the risk of massive fines or employees getting the bonus they need to start a new life.

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David Markus is the founder of Combo - the IT services company that ensures IT is never an impediment to growth.

Does social networking have a place inside business?

This week's question is a little off track for me, as I usually focus on the strategies for making IT work for a business, whereas this is about making a business work by using IT. A subtle, but important, difference.

After a conversation at the Microsoft Australia Partner Conference, I am convinced there is something in this for teams – large and small – and that we may be missing a big team-building opportunity. Just as LinkedIn, Facebook and Twitter have become important for broad social networking, I believe that if we fail to adopt new technologies such as, Huddle.com for sharing documents, and Yammer.com for connecting with co-workers we will be missing out on opportunities to build our teams.

The key to these technologies is that they allow groups to communicate better on multiple levels, in a time-shifted manner, so you no longer need to be present to be part of the team and to share experiences and contributions. As we have more ways to communicate, and computers become more prevalent and more connected, I think these tools must form some part of our corporate culture even in small companies of a few staff.

Benefits include:

• Foster staff loyalty by building internal communities.
• Keep conversations alive inside the walls of your office and retain the feel of 'small', even as you grow beyond the motherhood team of a small business.
• Inspire your employees to work together in new and creative ways.

Ideas I have of how to make use of these tools include sharing:

• Companies successes quickly with all staff.
• Changes in policy and procedure.
• Upcoming event information.
• Photos from the latest staff event.
• Progress of projects inside and outside the company walls.
• Developing new ideas in and from the team.

While many of these things can be done on a simple intranet, there are more web 2.0 ways of driving this to compel the younger generations to get involved and engaged by the company culture.

No doubt we are about to see a new wave of consulting offers from people who have figured out which of these technologies are leaders, and how to use them to gain productivity, efficiency, connection and – ultimately – employee loyalty.

I would love to hear from readers who are successfully using these tools to engage their employees, and how they have derived quantifiable benefits from them without losing hours to social chit chat that extends beyond office walls.

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David Markus is the founder of Combo - the IT services company that ensures IT is never an impediment to growth.

Do we still need a server for our business or can we do IT in the cloud?

Good question, and one that may be worth reassessing as the big IT companies refocus on delivering applications online through web browsers.

I spent a large chunk of last week at the Microsoft Partner Conference on the Gold Coast, which was a very pleasant time. Shame so much of it was indoors learning about the future of IT and not outside in the sun. Despite the lack of clouds in the sky, indoors the message was very clear – Microsoft is committing all of its development resources to building applications that run on massive servers on the internet, and do away with the need to have servers in the office. Their marketing slogan is "We are all in" sitting in a fluffy cloud image.

Large, efficient, centralised servers will offer all our regular applications, from the Office suite to email to financial applications and SQL databases – so, we just log in and use what we need from wherever we are. The tools are coming online now, and developers are writing applications as we speak. So, for basics like email, we can move right now, and there promises to be a flurry of new releases of online applications over the next 18 months.

So, what do I think about all of this? In short, I'm keen to see people begin to migrate their platforms in the direction of the cloud, as I see some distinct benefits for the growth businesses I work with. These benefits include:

• Total scalability from one person to 30,000 on one system, without ever having to worry about upgrading hardware.
• Price is 100% known as there is no support variables or hardware failures to cover.
• Instant upgrades without effort each time the software vendor releases an update.
• Access from anywhere without needing to build a complex network.
• Better security than small businesses can afford to buy.
• Backup looked after by the host.
• Disaster recovery no longer an issue.

But, what are the challenges with this new realm of technology?

As you guessed, there are many challenges ahead of us. This is what we call disruptive technology. The internal combustion engine was disruptive technology. Before that, we used horse and cart to get around. The motor carriage completely changed that realm of transport, even leading to aircraft capable of flying thousands of kilometres on engine-driven propellers. This put thousands of blacksmiths who fitted horseshoes out of business. There were good cars and bad cars built, but today the cars manufactured are pretty reliable devices that we have come to trust – and depend upon.

Similarly, I see a few years of confusion ahead as individuals struggle with a wide variety of choice for cloud-based solutions, both to replace the tools we use today and to supplement them.

Microsoft will have many competitors who appear to have the upper hand for awhile, but will invest billions to dominate the market place. Until there is a clear winner in each application space, there will be a high demand for guidance and support, as we will be faced with more choice than ever before – and many choices will lead to dead ends and bad investments.

I hope at the end of the upheaval we have found new and better ways to make use of computers, and feel the change was worth it. What I am seeing of new collaboration tools, and methods of sharing more complex information faster, leads me to believe it will be worth the struggle.

If you are considering the alternative cloud solutions on offer – and I firmly believe you should – do ask for help from people who work in the space with multiple clients and benefit from their experience. A move to cloud computing runs the risk of unexpected twists and turns, so you need an experienced advisor to keep these to a minimum.

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David Markus is the founder of Combo - the IT services company that ensures IT is never an impediment to growth.

How do I get my boss to stop doing the IT work and start growing our business?

Would you believe me if I told you I’m not allowed to touch the servers in my business anymore? It’s true!

A few years ago, my technical team ganged up on me – despite my qualifications as a graduate engineer with all sorts of Microsoft qualifications and years of server management experience – and changed the administrator’s password and effectively locked me out of the backend of our systems.

Their instincts may have been driven more by the mistakes I was capable of making as an out-of-date technician than the fact that I should have been focussed on business growth. Either way, it had much the same effect.

Unfortunately, people who are capable of working with technology often find themselves drawn into the depths of it to the distraction of all else. We all know the answers to every problem – especially IT ones – are just a few searches and clicks away on Google. And so we can be easily sucked in by the calls for assistance from the staff around us.

I often talk about ‘hero work’ in IT where the technically capable like to swoop in to fix a problem and zoom off to the fading cries of, “You’re a genius, thanks!” This kind of hero work has instant gratification for people who like solving problems or like helping people. Now, if you’re like me and you like helping people AND solving problems, the short-term rewards of this kind of work can drive you to work extraordinary hours and hardly notice the time.

However, this is rarely the right solution – as my team observed. Often, having a go at solving technology problems leads to more problems, due to the lack of knowledge of the grey areas. It is far better to get the right resources aligned to solve the problems on a long-term basis. And this is never the right job for a managing director – even a capable one.

Imagine if you will a marketing company where one of the directors has a strong grasp of technology, due to personal involvement in his early career. When the business is small, he starts looking after the PCs himself. As the network grows, he looks after more of it and directs the decisions. Eventually, as the business grows further, he outsources to a bloke he knows and manages him closely and jumps in when the chips are down. His technical interest remains and many of the problems are solved, but his staff are troubled by an environment where they can’t get their problems looked at or fixed, unless the director is around. Hardly empowering, right?

The solution for the marketing company was to outsource to a managed services company where the marketing firm’s staff were encouraged to call the helpdesk if a problem arose, or a new starter needed a PC. Suddenly, the director was set free to work on growing the business, and so it grew.

Today, even technical experts who work with technology all day for multiple clients, and do training courses and read technical books in their spare time, rely on being part of a team to solve problems effectively. The breadth and depth required to work effectively and keep at the forefront of technology is simply exhausting and to believe you can do it in your spare time is pure folly.

If you need to assess the resources you have working on the IT systems in your business, find a technology guide who understands your scale of business and work with them to get the right solutions and services in place. This will enable you to focus on business growth and future value, rather than being distracted by IT.

Click here to read more IT Systems expert advice.

David Markus is the founder of Combo - the IT services company that ensures IT is never an impediment to growth.