Quilts have been passed down from generation to generation as away to link the past with the present. Modern technology ensuresour financial futures can do the same if proper practices andprocedures are followed.

As an example, my wife has a small business that she has run outof the house for the past few years. It has provided her with a wayto have a self-funded hobby, as well as providing an outlet for hercreative talents.

Along the way, however, we have faced many of the same dilemmasthat many other small business owners face – along with many of myfinancial customers, too. I am speaking about accurate recordsretention and duplicative business processes.

My wife's business consists of creating quilt patterns and bookswith a set of instructions written such that anyone who has arudimentary knowledge of quilting can follow and create their ownunique twist to her original design. Her business requires that wekeep the different versions of those patterns that have evolvedover the years – as some have required “tweaking” to account forrequests on different quilt sizes, mistakes that may have beenfound, etc. Think member loan turnover!

On the business side, it also requires very accurate recordkeeping that satisfies the demands a home business must meet tomaintain its operations. Unfortunately, that is my part of thedeal. I have the business degree and finance experience, so I getto handle the accounting and business functions.

This business-side reality hit home recently, as the server thathoused my wife's quilt patterns and the accounting backups took ahit. Even though we had adequate backups, the time needed torebuild the server and re-load all of the software seemed to takeforever. I'm just happy we do not rely on this business for oursole income.

To get things going again, I had to buy a new machine as theother had outlived its technological lifecycle. To compound theproblem, however, it would be necessary to migrate to a new versionof the O/S, which meant upgrading a lot of the existing programs,restoring backups, etc.

Because of this requirement, I stepped back for a moment and puton my consulting hat and thought about what I wanted to implementfor the next 12-, 36- and 60-month time periods.

The first critical requirement I determined was to make sure wewould always have access to her inventory of patterns. They are thelifeblood of the business. This inventory access would also requiremore redundancy and possibly a better offsite backup strategy.

The second requirement, although equal in importance, was toensure we could keep our financial records safe. If cash flow orcash management were non-existent, there was no businesseither.

Next Page: The 'Aha' Moment

Then the “aha” moment hit. This scenario is exactly what I havebeen trying to teach credit unions for years: The business andoperational side of the credit union is just as important as thecore data processing side. They complement each other. But at theend of the day they are two very separate and distinct operationsthat need to be treated accordingly.

Once that enlightened idea took shape, I simply starting puttingtogether my Electronic Content Management (ECM) plan for thepatterns and re-addressing my accounting functions for the businessside of things.

Simply put, I needed to confirm we could duplicate our businessprocesses should anything ever happen to the DP environment. Norocket science here. For the patterns and books, I created anoffsite backup strategy that would store the data locally, back upto a separate drive and also provide offsite retention via anonline backup service.

This was key because the patterns could in effect be reproducedon any Windows machine running Adobe PDF – which was our imagingarchive format. As a result, we could provide deliverables ondemand from any accessible machine. Think member documents.

The accounting and financial side would be a little moredifficult because it would require a machine that could be reloadedwith the accounting software – think core DP system. So the key wasto ensure the backup was offsite and stored such that if I had tobuy another machine and re-load everything I could still continueon with the business operations. Actually, a virtual machine wouldbe a good solution here, but this is a small home-based business,so realties and costs are considerations.

Credit unions must account for their financial operations, aswell as their business operations in much the same manner. That is,the financial data are important. Unlike our little business, theyare dealing with members' money and livelihoods. However, the factremains that unless they are able to re-create their businessoperations and access the documents that spell out their processes,procedures and business workflows, they could very well be dead inthe water, as well, should disaster strike.

So what are a few of the key lessons to be taken from our smallbusiness example?

1. Realize that your core financial operations and businessoperations, although related, are two separate and distinctfunctions. Putting your eggs all in one basket here may create aproblem should anything happen. Risk Management 101:diversify!
2. Make sure you have properly built out and accounted for yourdisaster recovery and business continuity plans to ensure that eachbusiness function and operational area has been addressed andproperly backed up.
3. Make sure your business operations and workflows arereplicable. That is, if someone had to return to your organizationnot knowing anything about your business, is there adequatedocumentation and detail such that it could be successfullyreinstated. (Side note: A well-publicized Gartner study severalyears ago found that approximately 43% of businesses wereimmediately put out of business by catastrophic disasters, withanother 51% closing their doors within the following two years ifadequate business processes and data backup requirements were notin place – leaving only 6% of businesses able to continueoperations.) Sound familiar?
4. Test your backups and business continuity operationscontinually and refine them so if they do need to be put intoplace, there is a high degree of confidence they will function asdesired.
5. Create a technology refresh program to make sure you arekeeping up with the ever-changing tech environments.

This article is by no means complete with respect to what eachcredit union must do to ensure that its survival will continue inthe event of disaster or catastrophe or disrupted businessoperations.

But in light of everything we have seen happen from naturaldisasters, to government shutdowns, to bankruptcies, etc., it onlyseems prudent to take a good look at these operational areas ingreater detail.

It's also revealing that many of the same discussions I havewith my customers about their operations are also very applicableto our own small business operations, as well. I sleep a littleeasier at night under one of my wife's quilts knowing that ifdisaster struck, our little business could continue on.

As a wise man once said: “Happy wife, happy life.”

Happy Thanksgiving!

ScottCowan is vice president of sales and marketing at Millennial Vision Inc.in Salt Lake City.