Think Inc.
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New and improved? | Disaster recovery plans



New and (maybe)
improved technology

Do you REALLY need

By Mark Lane

How often are you shopping and notice a "new and improved" version of a product you use? For discussion, let's suppose the product is a financial software package like Quicken or Microsoft Money. (Both companies have recently released the "2003" versions of their popular financial management packages.)

When I noticed the new versions of these products, I thought to myself "Oh ... I really need to get this." But, after reading the packages for a few minutes, a few nagging questions began to creep into my mind.

For example:

Question: What will this new package do that my 2002 or 2001 version won't do?
Answer: Not much.

Q: Will this new version save me time?
A: It looks unlikely.

Q: Will it make me money?
A: Doesn't appear likely.

Q: Will it do my dishes?
A: Boy, I wish ...

Shouldn't the point of these purchases be that they will somehow make our lives easier, more productive or save us money?

Too many times, I find myself making those "must have" purchases or upgrades only to find out later that the item really doesn't do anything substantially better (sometimes it doesn't do ANYTHING better) than the previous version. Frequently, the designers even do something silly like totally redesign the product. Then we end up having to relearn everything just to become as productive as we were before.

Unfortunately, "new and improved" doesn't always mean improved, as in better. So, why do companies bring out the "new and improved" items so often? Because their marketing research tells them that we buy new items, and it makes THEM more money.

As individuals, this may not seem like an important problem. If you purchase the new version of your favorite financial management

package and it doesn't really save you time or money, you are probably out less than $100 and the time necessary for you to investigate the matter.

But this problem is much more serious in the business world. Too frequently information technology departments (and others) make purchases or upgrades with inadequate consideration of the financial impact of their actions on the company. Since IT expenditures are typically a large percentage of a corporate budget, this is a serious issue.

Several recent studies show IT managers realize the importance of evaluating their purchases. However, according to a report by Ernst & Young LLP, while 79 percent of Fortune 1,000 IT decision-makers agree that financial justification of IT projects are important to them, only 40 percent conduct business case analyses on a regular basis.

These findings should be extremely troubling to employees, managers and shareholders in companies. The goal of a company should be to maximize shareholder wealth. A company does this by making the best investments possible while keeping costs as low as necessary.

This objective requires a long-term view of investments by a company and would never allow for the kind of fraudulent activities that have been going on recently in companies like Enron and WorldCom. These activities would not be allowed because a wise manager knows that sooner or later the public will discover the fraud and the inflated stock prices will come crashing back to earth, greatly damaging the shareholder's wealth in the process.

The point is every expenditure in a company should go through some type of review process. If that expenditure doesn't make your employees more productive, save money or actually make your company money, then you should seriously question whether it is necessary.

This may seem like a lot of extra work, but in these trying times, we simply can't afford to do otherwise.

Now if I can just figure out how to justify replacing my 2-year-old laptop. Surely that new one does something better than my old one ...

Mark Lane is an assistant professor of finance at Hawaii Pacific University. He can be reached at



Don't procrastinate
on preparing a
disaster recovery plan

By John Agsalud

Much has been and will be written about the anniversary of Sept. 11. Aside from the political and societal repercussions, if we learned nothing else it's that we must always consider the worst possible scenario for our businesses and plan accordingly.

Though the likelihood of a terrorist attack in Kaimuki or Kailua is remote, we are still at risk for fire, crime and natural disasters. If your office burns down and you don't have your digital records backed up, you may as well have been hit by terrorists.

Take the well-publicized case of bond trading company Cantor Fitzgerald last Sept. 11. Not only did it lose its offices, but nearly 700 of its employees perished at the World Trade Center. Despite the human tragedy, the company was able to rapidly resume operations. One of the main reasons was that all of its systems were backed up in a remote site and it was able to quickly retrieve their records.

They had a plan.

No responsible Hawaii business should be without a clear strategy that provides both data storage and duplication of its computer network in short order. For obvious reasons, local businesses have shown more awareness regarding security matters over the past year. But after an initial flurry of interest, many companies have done little to secure their networks, much less implement an organized recovery plan. One of the main reasons is money. Businesses have slashed to bone over the past decade and resources are scarce.

However, this is not a time to be penny-wise and pound-foolish.

So where do you start?

The answer will differ for each firm. Obviously a publicly traded company on Bishop Street is going to have different needs than a restaurant on the North Shore.

The first thing to do is take stock.

Determine what types of disasters can affect your business. In other words, establish the type of disaster that could occur (e.g., power outage) the impact this disaster would have on your company (e.g., loss of computing and networking) and the cost of fixing the problem. Questions to keep in mind for this exercise are:

>> What software and hardware will you need?
>> Are you going to need a broadband connection?
>> How soon will you require this gear?
>> What do you need to do to get the system up and running?
>> How long will you need it before relocating your office?

Be certain you have a dependable way to back up your digital records and store them offsite.

Without your data, your business is finished. The good news is any enterprise, even the smallest office, can back up key data with an inexpensive backup tape, a Zip drive or a CD-ROM that is able to record data. The key is to store a copy of your data in a different location than your computers, every night. This could be a safe deposit box, a fireproof safe or even your dresser drawer.

Small businesses can also store data online with specialized Web sites, such as Web Drive (, a service now available for Road Runner customers. With this technology, it's easy to keep a copy of your files on a remote server for less than $5 a month.

Bigger firms should consider contracting with an information technology company with a sophisticated data center that can replicate your records at a moment's notice. One final thing: If you have made a backup, be sure and check its integrity. The joke around our office is that backups work 100 percent of the time. It's restoring the data that can be the problem.

Check the fine print in maintenance contracts.

Many companies have some kind of maintenance contract with IT outsourcing companies or manufacturers responsible for their hardware.

What people often skimp on is regularly scheduled replacement of critical parts. Sometimes the difference between your network going down is a $50 part that could have easily been swapped out or, paying a little bit more to have an extra server at the ready in case your old box goes kaput. Go over these details with your IT administrator and make sure that you're ready for any eventuality.

Check your UPS.

No, I'm not talking about the brown trucks that deliver packages. A UPS -- uninterruptible power supply -- is a vital component to any IT system. When the power goes out the UPS goes on, ensuring your computers and network can run until the electricity is back online, or at least until you can shut down the systems properly. These range from $150 boxes you can buy at Costco to $30,000 units for the big boys. Also, remember UPS's are powered by batteries, and batteries don't last forever. I recently walked into the executive offices of a well-known Honolulu company and gingerly asked the president the last time his UPS had been checked. He looked at me blankly, not having a clue what I was talking about.

There are more than a few firms like this in Hawaii and this is a real concern. If you don't have a disaster recover program in place -- get started.

John Agsalud is president of ISDI, a Honolulu-based information technology firm. He can be reached at or by calling 944-8742.

To participate in the Think Inc. discussion, e-mail your comments to; fax them to 529-4750; or mail them to Think Inc., Honolulu Star-Bulletin, 7 Waterfront Plaza, Suite 210, 500 Ala Moana, Honolulu, Hawaii 96813. Anonymous submissions will be discarded.

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