How companies coped in the aftermath of the Buncefield
inferno.
IT services companies and hardware suppliers are among the
businesses counting the cost of the fire at the Buncefield oil
depot last month.
Explosions and heat from the fire caused severe damage to more
than 80 buildings on the industrial estates surrounding the
terminal, and some were demolished by the blasts.
Initial estimates from Hertfordshire Chamber of Commerce put the
cost of the damage at between £500m and £1bn.
IT software and services firm Northgate Information Solutions
was the closest business to the fire, when a blast ripped through
the oil depot in the early hours of Sunday 11 December.
The explosion rolled across Northgate's car park and into its
150,000 square-foot building, starting a fire which left the firm's
UK headquarters an empty shell.
Other companies that suffered severe damage include printer
manufacturer Epson, imaging company Fuji, Waverley, the
distribution arm of Scottish and Newcastle Breweries, online
retailer Asos, IT services company Steria, networks equipment
supplier 3Com and eye care manufacturer Alcon.
The incident was as dramatic a test of business continuity
planning that any firm could expect to face. The larger firms
responded quickly and were able to resume trading by the following
day. But there are lessons to learn, particularly for smaller
businesses.
"Some of the large companies, such as Northgate and Fuji, were
able to get up and running fairly quickly, but a number of smaller
businesses were caught on the hop," said Tim Hutchings, chief
executive of Hertfordshire Chamber of Commerce.
Digby Jones, director general of the Confederation of British
Industry, urged firms to make business continuity planning their
new year's resolution, following the Buncefield fire.
"It was a miracle that no one was killed, but more than anything
it showed that the unexpected can happen at any time. Please, take
a long hard look at how you safeguard your workplace and
employees," he said.
It is too early to talk of business casualties yet, but at least
two small companies are in "intensive care". Others owe their
survival more to luck than good planning, according to Hutchings.
If they had been denied access to their premises for more than 24
hours, their survival would have been "extremely questionable", he
said.
"Evidence suggests that not as many companies had computer
back-ups and other financial records stored off-site, as they
should," he added.
Case study: Asos weighs the risks
Online clothing retailer Asos opened its 85,000 square-foot
warehouse on the Buncefield site just months before the blast.
The building and clothing with a retail value of £5.5m suffered
extensive damage, effectively shutting down the business.
The firm suspended its shares on 23 December and has refunded
19,000 customers who ordered goods over the web for Christmas.
"We are heavily seasonable, so it could not have happened at a
worse time," said Asos finance director Jon Kamaluddin.
One hundred warehouse staff are now cleaning up and sorting the
good stock from the damaged, and the company is confident that it
will be up and running by the end of January. It said insurance
cover will mean that its predicted end-of-year profits will not be
affected.
"We have always known that operating from one site would be an
Achilles' heel for us, but where do you draw the line? Do you set
yourself up in two warehouses and incur the cost of running across
two operations, or do you accept that this is a risk in your
business model and take out insurance to cover that risk? That is
the decision we made," said Kamaluddin.
Case study: Steria meets council paycheck deadline
despite control centre loss
John Torrie, chief executive at IT services firm Steria, was
shaken out of bed by the explosion and was at the site within half
an hour.
The blast had devastated the back of the Steria building,
destroying a newly installed control centre used for remote
monitoring of customers' IT systems.
Torrie convened an emergency board meeting at the firm's Sunbury
office at 10am that morning, while managers raced to secure
temporary offices in Hemel Hempstead before they were snapped up by
other firms affected by the blast.
"We had the operational issue of recovering customer services
and we still had to keep the business running. We had a major
contract bid due in on Friday [16 December]," he said. The IT
department was able to rebuild the bid team's infrastructure in the
head office, and they were functioning by lunchtime, said
Torrie.
IT staff worked around the clock to rebuild the control
centre.
"We had to bring down one system completely. Fortunately, it was
a batch processing system. We rebuilt the system image in another
datacentre on standby equipment. And that was up and running by
8.30 on Monday morning," said Torrie.
Three customers experienced slight delays in their IT services,
he said, but the firm managed to get its systems up and running in
time to ensure that a local authority was able to pay its 75,000
staff on time.
Case study: back-up and recovery systems enable
Northgate to survive datacentre devastation
Chris Stone, chief executive at IT services firm Northgate
Information Solutions, was phoned at 6:25 on Sunday morning by his
head of security. Northgate's UK head office, which directly faced
the oil depot, had been completely destroyed.
"The explosion rolled across our car park, which is all that
separated us from the oil depot. It came in at the end of the
building and it ripped up and out, setting the building on fire,"
said Stone.
Stone's first thought was the safety of staff. "There was a
moment of fear when you think, well, all the people you were
expecting to be there were accounted for, but in the IT world, some
of our more talented programmers are prone to have good ideas at
curious times of day," he said.
In the event, only four people were in the building. Three
suffered cuts and bruises from flying debris and were taken to
hospital.
The blast devastated the company's state-of-the-art datacentre -
more than 20,000 square feet containing servers belonging to both
Northgate and its customers.
The timing of the explosion was unfortunate. Night shift
operators had just finished preparing the back-up tapes, containing
a day's worth of data. The tapes were due to be collected an hour
later and taken to a secure off-site store by courier.
By 8am, after a series of conference calls with Northgate's
other directors, Stone had invoked the disaster recovery plan.
Managers were able to communicate with staff by sending SMS
messages to their mobile phones, instructing them not to come into
work while the firm found alternative premises.
Northgate's disaster recovery supplier, Sungard, began firing up
back-up systems. It was able to provide duplicate hardware for
customers who had taken up a disaster recovery option. Other
customers had to wait while Northgate engineers bought in and
commissioned new hardware. "It was a good end of year for our
suppliers," said Stone.
"We had our first engineers arrive at the Sungard facility at
about 10am on Monday. Then we retrieved the back-up tapes from the
off-site store. The back-ups had been completed on Friday
night."
Northgate is still attempting to recover the missing 24 hours
worth of data. "We have recovered a lot of it already. We have been
able to recover the assets and to retrieve the data from the
drives," said Stone.
"All customers are now operating effectively. Well over half the
customers are back to where they were before the explosion."