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Maintenance Contract

See Also:
Progress Billing for a General Contractor
Completed Contract Method
Covenant Definition of a Bond Contract
How to Maintain an Effective Job Schedule
Accounting Cycle

Maintenance Contract Definition

A maintenance contract, defined as the contract between 2 parties which creates the agreement that one party will maintain an asset owned by another party, is common across many industries. Maintenance contracts can exist for equipment, a building, landscape, computers and other information technologies, and more.

Maintenance Contract Explanation

A maintenance contract, explained as an agreement which supports many service businesses, is simply an agreement to maintain something. This addresses the many needs listed above, Additionally, a maintenance agreement can span across multiple industries. For example, manufacturing has equipment which needs to be maintained just as much as healthcare, IT, retail, and more. A maintenance contract signifies the agreement to maintain anything and is somewhat of a general concept.

Common parts of a maintenance contract span across all needs. A maintenance contract agreement sets the expectations, timeline, requirements, price, and what is not included in the contract. The two invested parties usually negotiate the annual maintenance contract rules. Then, they finalize it with a maintenance contract form.

Initially, it is presented in the form of a maintenance contract proposal. This, the initial document, is similar to a proforma invoice. It is merely a quote. After negotiation the final agreement is made official with a contractual document.

One will want to pay special attention to the maintenance contract terms and conditions. Through these, agreements may be made which were not necessarily agreed upon. A business can only understand what they are agreeing to when they fully read and understand the contract. Ask your lawyer to read the contract before it is signed if you need help.

Generally, you need a maintenance contract cancellation letter to end an agreement. This document officially ends the relationship between the two parties. Before sending one of these letters, allow the customer to tell you how their expectations are not being met. By doing this, you are being professionally courteous. If the problem persists, you can formally close the agreement with a cancellation letter.

Maintenance Contract Example

Lisa is the owner of a property maintenance firm. Following in her father’s footsteps, she works diligently to maintain the apartments and other real estate properties which have created her livelihood. You can find Lisa often “putting out fires” as the founder of her business.

Lisa has no small task ahead of her. In fact, she has a large one. She must convince one of her customers who recently cancelled service to send her a maintenance contract renewal letter. As the owner of her business, she is the head saleswoman and customer service representative.

When this customer cancelled his services, it surprised her. This was because he never spoke to her about any issues. Upon speaking with him, she realizes that he has found a better price. She must start negotiating quick before she looses this account.

Instead of creating a price war she relies on her ability to satisfy her customers. She agrees, with the customer, to have a single associate dedicated to his account. She can provide this by hiring a part time college student. This person will provide the custom service that many other companies, especially mass market companies, can not.

As a result, Lisa is able to keep the client she was trying to save. She is thankful that she was able to meet his needs. If she creates positive word of mouth, then she can receive the referrals that her company can convert to customers. Over time, this will create the success she deserves.

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Disaster Planning for IT

See Also:
Technology Assessment Criteria
How to Evaluate IT Systems
Technology Strategy for Small to Medium Sized Companies
How to Ensure Redundant Data Communications Links
How do You Know When it is Time to Buy New Software

Disaster Planning for IT

Recently an office building in Houston caught fire and much was destroyed. What if this had been your building? We don’t like to think about things like this, but in light of what just happened recently, it bears consideration. In terms of disaster preparedness, we usually think of hurricanes and flooding, but business interruption can come in many different ways including hardware/software failure, power outages, key personnel changes, fire, arson, sabotage, terrorism, computer viruses, or theft. Are you prepared in case of a disaster?

Here are some key points of a good disaster preparedness and business continuity plan for your business.

Solid Backup System

solid backup system for your data is a critical component of a solid disaster preparedness plan. The goal is to be able to restore your data and your infrastructure as quickly as possible if disaster strikes. Are you testing your backups regularly? Are they being taken offsite and archived? There are many different backup options available today including online backups, but it is imperative you implement, test and plan for a disaster. Would your backup recovery plan have potentially gone up in smoke had your building or office caught fire?

Accurate and Complete Documentation

Another key is to have accurate and complete documentation of your infrastructure so that your system can be easily recreated. You can purchase new equipment and software; but you need access to its previous design. Documentation saves time and eliminates confusion and heartache.

How Long can the Business Survive

You need to review all of your applications and determine how long your business can survive if an interruption were to occur. Email for example is as critical, and as important, if not more so, than your phone system. Third party services offer a way to collect, filter and access your company email if your mail server is disrupted for any reason. In addition, how long can your company survive without your customer list or your accounting system? What about other business critical systems? Do you have a plan in place and do you know how long would it take you to recover had this been your building?


What about security? Is your data secure from malicious attacks? If your power is disrupted, do you have backup power supplies that will properly protect and shut down your equipment in case of a power outage or protect you from power surges?


And most importantly, are your employees OK? And is there a plan in place for everyone to communicate in case of a disaster?

Business Disaster Preparedness

In the event that a disaster may potentially create a threat to your business, we have prepared a short list of precautions for you to take. First and foremost, protect yourself, your families and pets. Secondarily, protect your data. Lives and data are irreplaceable; hardware, software and applications just take some time.

Take Precautions

In regards to your technology and data, we recommend taking the following precautions:

Make sure you have a good backup of your data and take it to a safe and secure place. This can be accomplished in one of several ways:

a. If you have a good tape backup solution, take ALL of your tapes off site to a secure, high and dry location.

b. If you do not have a tape backup or you are in a flood prone area, take your server with you.

c. Worst case, clearly mark the hard drives in your equipment, remove them and take them with you if rising or blowing water is a threat.


If you do not need 24×7 access to your systems, power them down; do not leave equipment running.

a. Gather all critical equipment and move it away from windows and the threat of rising water.

b. Print off important lists such as employee and customer lists.

c. Print off emergency contact numbers for vendors.

Closing Your Office

If you are closing your offices, perform the following steps:

a. All employees should unplug the power cables to their computer and electronic devices from the wall outlets after they shut down their computers.

b. If there is a modem line attached to the computer, make sure to unplug the phone line from the modem.

c. If a server is being used as a fax server, Make sure that all phone lines are unplugged. (Unless the Surge protector is protecting the phone line)

d. All expensive fax machines should be turned off and phone lines should be unplugged.

e. All copiers should also be unplugged from the wall outlets.


a. If you were to lose access to your building, can you forward your phones to another number? Do you know how to do this?

b. Do your clients, friends, etc have your cellular number in case of an emergency?

c. Do your employees know where to contact each other?

Home Systems

For your home systems, please make sure you have a good backup or protection of the following:

a. Personal financial information.

b. Personal data.

c. Family pictures, etc.

This is by no means an exhaustive list, but some highlights that you should be aware of. Please be safe if a disaster does, in fact, occur.

The National Institute for Occupational Safety and Health has several links to documents for emergency preparedness for business at this link:


Personal Disaster Preparedness

Prepare a personal emergency kit – a small bag or case – that you can take with you if an evacuation is necessary. Your kit should include:

  • Medicines
  • Toiletries
  • Shoes
  • Clothes
  • A list of contact names
  • Phone Numbers
  • Important Paperwork (wills, insurance policies, home owner title and deed)
  • Important photographs and jewelry.
  • Cell phone and car and outlet chargers
  • Data backup on tape or CD’s
  • Pack enough for an overnight stay.

Designate a contact name and phone number outside the area where you reside. Choose a family member of friend in another state as a contact to relay information in case telephones are out of service.


  • Know what zone you live in, and if you have to evacuate. Find your zone here: http://www.csc.noaa.gov/
  • Test flashlights, other emergency lights and battery operated radio.
  • Buy extra batteries for flash lights, radio and clocks.
  • Get cash.
  • Assemble important papers and secure them in water safe package. Have them where you can grab them and take them with you if you must evacuate.
  • Designate an emergency contact person outside your area.
  • Gather/print list of important phone numbers.
  • Fill your gas tank.
  • Fill your grill propane tank.
  • Assemble three day supply of non-perishable food and beverages.
  • Have a non-electric can opener on hand.
  • Ensure a two week supply or prescriptions and medicines, including for pets.
  • Address special dietary needs.
  • Gather/pack toiletries, glasses, hearing aids.
  • Gather/pack a change of clothes and shoes.
  • Gather rope, masking and duct tape, tarp, boards, nails, hammer.
  • Have on hand heavy duty garbage bags.
  • Gather matches/lighter.
  • Have a portable cooler on hand for freezer and refrigerator contents.
  • Have insect repellent on hand.
  • Prepare to have five gallons of water per person, two gallons per pet.
  • If possible, have a gasoline powered generator on hand.
  • Talk to your neighbors to find out who will be staying. Exchange phone numbers in the event that they work.

Disasters are expected to happen. So, start preparing today and download your free External Analysis whitepaper that guides you through overcoming obstacles and preparing how your company is going to react to external factors.

disaster planning for IT

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System Recovery

See Also:
How to Evaluate IT Systems
How to Choose a Software Dealer
Technology Strategy for Small to Medium Sized Companies
How to Ensure Redundant Data Communications Links
How do You Know When it is Time to Buy New Software

System Recovery – Modern

Modern system recovery processes are complete solutions. It is designed to reduce any server down time with the use of a specialized back up and virtual server appliance. In addition, it creates real-time backups as frequent as every 15 minutes. System recovery also offers offsite storage at an affordable cost. It provides a low cost, speedy disaster recovery process.

In addition, data is encrypted. It is not accessible to anyone, either on the backup device or at the remote storage facility without a required passkey.

It also eliminates the need to assign a data custodian to change tapes as well as the cost and hassle of managing an on-site tape backup solution. Your IT department or resource monitors and manages the entire process.

Executive Summary

A recent study discovered that, of companies experiencing a major loss of data, 43 percent never reopened, 51 percent closed within two years of the loss, and a mere 6 percent survived over the long-term.1 For small and medium-sized businesses, these statistics suggest the necessity of implementing a robust data backup and recovery solution. Loss of data could mean lost emails, accounting data loss, patient or client data loss, loss of legal records, lost orders, and so on. This document will discuss how a data backup and disaster recovery solution overcomes challenges that are commonly faced by small and medium businesses.

Traditional Solutions vs Emerging Technology

Magnetic tape and disks are the two leading media for data backup storage. While magnetic tape is currently dominant, analyst Dave Russell of Gartner believes that “Recovery will move to online disk-based storage in the future. This will cause a major shift in the backup market during the next four to five years.”2


Smaller companies in particular will benefit from the shift, as recent advances in design and manufacturing lower the total cost of disk-based storage in terms of storage per bit. Falling prices, combined with the various performance advantages that storage industry analysts cite, render disk increasingly attractive. Gartner Group highlights the suitability of disk for these organizations by explaining that, “The need for high-performance online recovery of data, combined with the availability of low-cost disk arrays, has influenced enterprises and small and midsize businesses to adopt a disk-based approach for backup and recovery.”3


Tape, in contrast to disk, is physically delicate and easily compromised by environmental factors such as heat, humidity, and magnetic interference. Moreover, you must replace tape cartridges frequently (every 6-12 months). Tape’s innate sensitivity contributes to high failure rates, with analysts estimating that anywhere from 42 to 71 percent of tape restores fail. Even when magnetic tape backups are successful, tapes themselves are subject to loss or theft, and may be in the possession of an employee or vendor unable to reach a recovery site. Thus, even when physical backup and restoration processes succeed, tape may not prove to be as timely and appropriate a medium for data storage as disk. Time is a crucial consideration because each hour of server, application, and network downtime endured until data restoration comes at a high cost, especially to smaller businesses.

Analyst Jon Oltsik of Enterprise Strategy Group also points out that tape is seldom encrypted. This compounds the destructive impact of tape theft:

“Very few people encrypt backup tapes, which means that they rely on the security of the backup and off-site rotation process.”4

Magnetic tape encryption, unlike disk encryption, has historically been too costly for all but large enterprises:

“Encryption of any data that is leaving the security of the data center, in transit, has always been an option, unfortunately, a very expensive option,” explains Clipper Group.5

Advantages of Emerging Technology

Disk offers not only lower cost encryption but also other advantages. In contrast to tape, “disks are more durable, last longer, withstand more overwriting and you don’t need to clean any heads,” according to Rinku Tyagi of PCQuest. Additionally, “When it comes to backing up using disks, they are easier to manage. Disk backup systems include management tools, often browser-based, for you to easily configure settings and check status from anywhere.”6

HP enumerates other advantages of disk storage, noting that “Data is backed up to disk much faster than tape, which translates to less impact on production server availability. Disk is also a more reliable media than tape and less prone to error, which translates to less failed recoveries.”7 Clipper Group believes that the superior speed of disk storage is an enduring advantage: “High performance disk will always be the choice for online applications that require fast access.”8

While disk offers advantages over tape, it is not a panacea. After installing disk technology, companies will still be responsible for monitoring and managing backup processes, encrypting and safeguarding backed up onsite and offsite data, restoring data to new hardware, and other functions. Without implementing a layer of governance over disk-based data backup, these companies court the danger of failed backups and delayed restoration of data, thereby jeopardizing their chances of successful recovery from major data loss.

Smaller companies unable or unwilling to invest in the human expertise and infrastructure support systems necessary for management of their backup system can leverage a data backup and recovery solution to remove staffing burdens.



“Incremental Forever” methodology captures all changes to the initial image in increments of as often as 15 minutes. The Incremental Forever technology not only backs up recent data sets but also allows end users to reconstruct the state of their data as it stood at the end of various restoration points over the last two days, various days over the last two weeks, various weeks over the last month, or various months since the implementation of the latest in backup technology. This level of forensic and auditable data recovery may satisfy various regulatory requirements (such as HIPAA and GLBA) for data retention and data record reconstruction, and also serves stakeholders such as supply chain planners, warehouse analysts, auditors, and legal counsel.


This technology generates an image of all hard drive partitions via an agent. It is then warehoused on the backup device physically located at your location. The data is stored AES-256 bit encrypted and compressed, reaching efficiencies as high as 2:1. We recommend a block-level, not file-level, backup. This means it captures data at the level of 1s and 0s. Block level data is raw data which does not have a file structure imposed on it. Database applications such as Microsoft SQL Server and Microsoft Exchange Server transfer data in blocks. Block transfer is the most efficient way to write to disk and is much less prone to errors such as those that result from file-level backups. Additionally, open files or open databases do not affect block level backups. The block-level image is an exact digital duplicate of the on-site server.


A good backup system should allow for quick and flexible restores. Today’s solutions allow for recovery of files, folders, partitions, mailboxes/messages, databases/tables using a quick and intuitive process. In case of a complete server failure, this new technology allows for a bare metal restore to new hardware which has a different configuration, hardware and drivers as compared to the failed server. Incremental based backup allows restores from several points in time. This allows a company to restore multiple versions of files, folders, messages/mailboxes, and database/tables.


After imaging the servers to which it is attached, the backup device then creates an independent 256-bit encrypted tunnel. It then transmits the imaged data to two secure offsite locations. It resides in an encrypted, compressed format creating a total of three copies of the data in three geographically distinct regions. Since the data is encrypted and only we have the key, no one has access at any of the remote storage facilities.

Transmitting data to remote sites guarantees that the data is safe in uncompromisable locations. These remote sites are in case of physical damage to the client’s network/backup device or even a regional disaster. Encryption is an important step in the process of transmitting data between the backup device and the remote sites. This is because it greatly reduces the risk of data loss incidents that plague magnetic tape. In addition, it prevents man-in-the-middle attacks during transmission. No one has ever broken the 256-bit Advanced Encryption Standard (AES) algorithm. Furthermore, it is currently considered the gold standard of encryption techniques and renders transmitted data immune to theft.


If any of your servers fail, then the server virtualization technology embedded in the backup device allows servers and applications to be restored and rebooted within a couple of hours. You may sometimes endure a wait of several days in order to receive replacement servers from vendors. However, your backup device can have your business up and running while waiting on a replacement server. The backup device multitasks; even while functioning as a virtual server, it can continue to back up data from other devices plugged into the device. The technology thus allows you to remain in business without any significant loss of data backup, server functionality, or application downtime.


Transmission itself occurs over your Internet connection. You can easily configure it to minimize bandwidth consumption. Today’s device leverages Adaptive Bandwidth Throttling, which only utilizes unused bandwidth or allows us to set an outbound limit. The UDP based smart transfer technology utilizes a host of innovative algorithms to speed up data transport and resume from failure. The device can therefore exercise file control over the data imaging and transmission processes.


You can monitor the device by the Network Operations Center 24x7x365. Failed processes generate immediate alerts to engineers, who often remotely correct errors after receiving notification. In case of more serious backup issues, the Network Operations Center will conduct repairs at your site. If any backup units are irreparably damaged or destroyed, then they will ship replacements directly to your location. These replacements are pre-loaded with all stored data.


These devices today are extremely affordable, and are available with offsite storage for as little as $1.50 per GB.

system recovery

1 Cummings, Maeve; Haag, Stephen; and McCubbrey, Donald. 2003.Management information systems for the information age

2 Russell, Dave. 2007. Gartner Group. Recovery will move to disk-based, manager of managers approach by 2011

3 Russell, Dave. 2007. Gartner Group. Recovery will move to disk-based, manager of managers approach by 2011

4 Jon Oltsik, quoted in Shread, Paul. 2005. Internetnews.com. Bank’s tape loss puts spotlight on backup practices

5 Reine, David. 2007. Clipper Group. Security for small data centers—right-sizing tape encryption

6 Tyagi, Rinku. 2006. PCQuest. What’s for your backup: Disk or tape?

7 HP 2007. HP proLiant dl100 g2 data protection storage server—questions & answers

8 Reine, David. 2007. Clipper Group. Security for small data centers—right-sizing tape encryption

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Cloud Computing: Advantages and Disadvantages

We currently run on a Windows NT server using Remote Terminal Services. It has worked like a charm and is instrumental in our daily operations. Unfortunately, it is coming to the end of it’s useful life. Our outsourced IT department has informed us that we should replace the system during the year. They are recommending that we go to their cloud computing system. We’re not sure.

Cloud Computing: Advantages and Disadvantages

Cloud computing seems all the rage right now. We have had our own local cloud computing system for the past six years. Now they are asking us to consider going to a “regional” cloud system. Google would like us to consider their “national” cloud system. I’m not sure I want our financial information floating around. Furthermore, what do we do if they go out of business or mess up our information. (Think ATT sidekick!).

The cloud computing advantages as I see them are: access from anywhere, secure backup, redundant systems in the event of national disasters, and limited upfront investment. The disadvantages of cloud computer are: control, security, and control. (Did I mention control?)

We have a client that is using a national cloud computing accounting system. The annual fee came up for renewal and the company demanded immediate payment. They would not finance the system like they had in the past. Our client was stuck. Also, the bill came due December 15. Not a good cutoff date.

As information has become more valuable and instrumental in our ability to service our clients I am not comfortable in outsourcing our servers. What are your thoughts? I would like to hear from anyone who has had any experience with cloud computing.

Download your free External Analysis whitepaper that guides you through overcoming obstacles and preparing how your company is going to react to external factors.

cloud computing

Strategic CFO Lab Member Extra

Access your Projections Execution Plan in SCFO Lab. The step-by-step plan to get ahead of your cash flow.

Click here to access your Execution Plan. Not a Lab Member?

Click here to learn more about SCFO Labs

cloud computing

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