By John Fason and Jerry Montella
April 25, 2003 — Not surprisingly, public utilities, like many businesses, have experienced a heightened awareness of security on all fronts during the past year. A recent survey of 1,000 U.S. companies commissioned by AT&T revealed that, since September 2001, three in four businesses have reviewed or evaluated their current business continuity and disaster recovery plans, and as many as 40 percent have organized teams or processes to focus on business continuity and disaster recovery planning.
While data recovery – or off-site data backup and storage – is certainly an essential dimension of a sound business continuity strategy, it alone does not provide the full range of protection needed in the event that any manner of business interruption, natural or otherwise, should occur.
For utilities in particular, which rely heavily on monthly customer billing for revenue, cash flow and customer relations, the absence of a “print-to-mail” component of a comprehensive disaster plan can leave you scrambling to find a way to actually use the data you’re likely to be paying good money to back up.
While it is a relatively new concept within the disaster recovery industry, print-to-mail simply means having an executable strategy in place to generate and disseminate critical documents, should your hardware, equipment or printing systems fail. Not unlike the security of its people and physical property, a company must also take preventive measures to safeguard its financial security, at all costs.
Southern Company Services, a subsidiary of Southern Company, regards print-to-mail as a fundamental part of its comprehensive disaster recovery strategy. In fact, prior to exploring print-to-mail in 1999, the company identified the lack of it as a major weakness should their in-house printing facilities fail.
For example, one of its major business units, the Customer Service System, interfaces with billing and many other critical business operations. With approximately 4 million customers throughout the Southeast, there are 21 billing cycles per month, with each cycle approximately 200,000 invoices per day.
In fact, postal costs alone total an estimated $50,000 per day. While power outages, human error, systems failures, and natural disasters are among the most common causes of business interruption, a print-to-mail plan to support this application is absolutely critical.
Beyond billing, critical document flow represents the synergy among myriad external and internal audiences: they are an essential part of a utility’s daily operation, and the inability to produce them can be detrimental on many levels. Without invoices, even for a short period, cash flow generated through customer billing is interrupted, while customer service, accounting and other departments may also be negatively impacted as a direct result.
In fact, a recent study by Contingency Planning and Management Magazine showed that nearly 75 percent of all U.S. businesses have had a business interruption. Of those, one in five fail to resume operations.
When you consider the alternatives, the return on investment of completing the data recovery cycle with a print-to-mail element far outweighs the risk of inactivity. Like data recovery subscription services, which can range from $100 to $250,000 per month, print-to-mail expenditures are based on potential volume multiplied by the cost of running the necessary equipment to generate the mailing and get it into the mail stream. Southern Company Services has found the print-to-mail investment to be reasonable from a cost perspective and complementary with its data recovery and overall business continuity plans.
Furthermore, a well-conceived strategy translates into both hard- and soft-cost advantages. Beyond revenue protection, the ability to print using exact USPS specifications, and mitigating the risk of fines and lawsuits, a print-to-mail plan will eliminate overtime and temporary staff costs associated with an in-house recovery period, which can be significant.
On a broader level, the ability to manage smoothly through crisis enables the company to maintain a stable public image, while focusing efforts and resources in more important areas – such as delivering service to its customers.
Despite print-to-mail’s low profile – even among many business continuity professionals – one of the worst things a public utility can do is take a “wait-and-see” approach. Southern Company Services’ experience was that a print-to-mail program requires a fair degree of customization and testing.
This cannot be accomplished in a crisis situation, making a preventive approach critical. It’s next to impossible to find a printer or print-to-mail service at the last minute to handle your needs; the system needs to be in place before the problems arise. Transferring data, mailing requirements and MICR codes to a sister utility can be equally infeasible, especially when the overflow volumes have doubled or tripled.
A first step toward pursuing a suitable print-to-mail option is auditing the current business continuity and data recovery plan.
Pose these key questions:
* Does your data recovery include systems printers?
* Who recovers the production printers?
* What about finishing and mailing?
* How will you communicate with your internal and external audiences?
* Have any current print-to-mail plans that exist been thoroughly tested and updated?
Secondly, applying a Business Impact Analysis (BIA) illustrates those critical processes that would be most damaging to the company’s financial security should a business interruption occur. On a very broad level, a BIA is typically performed against a wide range of variables, and, by design, will expose your company’s most critical operations, allow you to gauge what resources and how much time it would take to find alternatives for each one, and then rank them in priority order.
A more rudimentary, yet illustrative application to assess risk is calculating the lost or delayed revenue if you were unable to generate billing for a given period of time. Even the most basic figures arm you with the information needed for a cost-benefit analysis when you begin to evaluate service providers.
In addition to expense, there are several base-line requirements that should be applied to the print-to-mail options under consideration. First, seek providers with dedicated facilities, and those that can accommodate not only the volumes, but also the specific print and MICR and postal requirements. The ability to mirror data and replicate systems exactly must be core competencies. Additional capabilities including stockholder services or short-term year-end reporting backup plans may also be considered. Specialization in print-to-mail is also highly beneficial.
Most importantly, however, the provider must offer proof-of-concept testing, which simply means the ability to demonstrate the system at work. Southern Company Services’ print-to-mail service insists on periodic testing – an aspect it regarded as superfluous at first, but one it now deems valuable. Often, an issue specialists don’t think will impact the data and print outcomes becomes a huge problem in implementation. Proof-of-concept testing provides a precise replication process and the opportunity to troubleshoot.
As complement to the increased focus on security in all its aspects, an effective business continuity plan recognizes that data recovery alone does not complete the cycle of communication with internal and external audiences – nor does it protect a company’s financial well-being or future. Rather, a comprehensive approach designed to safeguard a company’s critical business processes, which includes a print-to-mail aspect, will prove worth the investment.
About the Authors: John Fason is a member of the Information Resources Disaster Recovery team for Southern Company Services, a subsidiary of Southern Company. He has a B.S. in criminal justice from Valdosta State University, and is a candidate for the Certified Business Continuity Professional designation through the Disaster Recovery Institute.
Jerry Montella is the General Manager of Mail-Gard, a CC3 company, and the nation’s leading provider of print-to-mail continuity and recovery services. For more information, please visit www.mailgard.com.