Wednesday, July 4, 2012

Are You Prepared for Crisis? Retailers Need a Back-Up Plan for Outages

As I mentioned in my previous post, many around us have been dealing with the effects of the Summer Derecho storm that has impacted much of the eastern US.  Some of us are even effected when our businesses and homes are not located in the path of the storm as its affects no doubt impacted communications for the internet, hosting for many internet sites, and as Matt Heusser has written over at 21st Century It: Cloud Computing: Keeping Things Simple, Except When It Doesn't, an article which discusses how this emergency impacted Amazon's EC2 for several businesses and how some CEOs may react to the outage.

I in turn, posted in the comments there a long comment about how people of non cloud hosted solutions should not feel themselves somehow safer either, but I wanted to also post that comment (edited a bit for grammar) for the rest of my readers to review.  Please take a look and let me know in the comments, what areas you may have seen where companies could do more to avoid catastrophes like this, and in some cases, if it is just an 'Act of God' away from occurring, what can we do to minimize how this affects, not only our own corporate bottom lines, but the citizenry of an ever growing networked society?  Note that I've added a lot to what may be a comment some of you will have already read, but I think it is worth reading a second time.

In an era with ever increasingly severe, and unpredictable weather at times, I find that the story of Amazon's EC2 services outage, (a major outage to be sure) to be just one of many.   Look at the recent storm which has impacted several million citizens in just one night from Indiana, all the way through Ohio, West Virginia, Virginia, Maryland, DC, etc.   So, it isn't just cloud hosted solutions which are vulnerable to outages of this type.  Non-cloud solutions are no safer at times.

A great example are Point of Sale systems, such as those used by so many grocers. retailers, gas stations, convenience stores, restaurants, etc.   When the power is out at many of these locations, the expectation is it will quickly turn back on.  Yet as I a West Virginian look at the news I cannot help but look at major chains, like Krogers, Walmart, Food Lion, Foodland, Dollar General, and others who serve a large area and have now after nearly two plus days of little if any power have had to dispose of millions of dollars, countless tons of perishable products - everything from meats, cheeses, refrigerated juices, prepared meals, milk and deli meats and side items, and also highly time sensitive produce.

It saddens me that in the effort to fine tune profit lines, companies like these which provide vital services are caught just as the local populace without any type of failover plan.  At some stores even things that could be used and necessary in the short term like candles, matches, propane, grills, charcoal, and bottled water remained on shelves because stores had no fail over plan for how to handle inventory when the computers and power were down.   Retailers of all sorts turned people away without cash as credit card and even check verifying machines remained unable to function or connect due to lack of power, or down telephone lines left many desperate consumers stranded without cash.  Even if people had cash though, many stores had insufficient cash reserves, or lack of ability to process and sell merchandise absent the scanner based UPC code look up machines that so many retailers are dependent upon.

What's worse?  (For the corporate bottom line, that is.) People look far outside their normal shopping zones to shop at other stores of the chain, or (perhaps even more likely), customers take their dollars to spend at your competitors, who no doubt raked in cash hand over fist on simple commodities like generators, ice, bottled water, paper plates, cleaning supplies, and canned and other non-perishable items.  Those retailers who had a plan, positioned themselves to not only help the people seeking to find these goods, but likely increased their profit margins in the short term, which no doubt investors of any major retailer will appreciate.

For me at least, this is something that all companies need to address.  Whether they are cloud or not cloud related seems irrelevant at this point.   When I read that retailer X or Y contemplated buying a generator at some point but thought it would be used too infrequently to justify it's cost, I can't help but shake my head as more money is walking out the door in dumpster bins then in their bank accounts. For me, it was sad to see so much, could have been bought, or given away product (if you wanted a public relations effort in this environment), been cooked, and eaten by some who maybe had nothing for that day.  With freak ice storms, out of control wildfires, rain storms, hurricanes and tornadoes, and other such weather phenomena becoming more common in occurrence if I were a CEO I'd be rethinking my fail over plans at the local level when connectivity and power goes down.

Unfortunately, for those of us still stuck in this state of emergency, we are forced to pick up the pieces and begin the clean up as many more tons of lost food, and damaged homes and businesses will have to be performed before we can all get back to a state of normalcy.  So if you happen to live in one of these areas, pay attention to your normal sanitation schedule, and watch for instructions on local news or radio broadcasts on how to properly dispose of the spoilage so as not to attract rodents, and further complicate an already abysmal situation for many of us.

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