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The Basics of Electrical Preventive Maintenance and Its Implications for Controlling Costs

in Perspective

By Emily Aschinger Martin

On December 2, 2014 the city of Detroit experienced a widespread shutdown of its electric power due to a failure of the grid. This power failure “forced evacuations, trapped people on elevators and darkened hospital rooms,” according to the Detroit News. The report continued with a statement from Randi Berris, DTE Energy spokeswoman. “Everybody is aware the system has not gotten the attention it needed over the past several decades because of the city’s ongoing financial problems.”

While your own building may not have the potential for the widespread, dramatic consequences of the Detroit power failure, deferring preventative maintenance on your electrical systems can be equally problematic. Building managers are recognizing the economic value in not kicking this expense down the road.

Power consumption is costly. Efficient use of power generated by maintained electrical systems reduces the expense associated with peak energy months. Still, the most obvious consideration for having an electrical preventive maintenance (EPM) program is employee safety, followed by damage to property and equipment due to heat build-up from fire. Any serious injury or resulting loss of life due to operating under unsafe conditions may open up a company to costly liability.

According to a report from Hartford Steam Boiler, the “failure rate of electrical equipment is three times higher for components that are not part of a scheduled preventive maintenance program than those that are.”

A full-service, qualified electrical company can provide a regular, preventative maintenance program which should significantly extend the life a company’s electrical systems. The ROI with this maintenance program is typically very high due to the significant costs of installing new systems versus the relatively low cost of the program.

This same electrical contractor can and should be able to provide a cost-benefit analysis to companies who are considering replacing their old systems with new ones. The ROI again is high in this case due to the significant potential savings in making a highly-informed, replace/no-replace decision when compared to the relative low cost of the cost–benefit analysis. We recommend finding a company qualified to do both.

Several factors may go into the scheduling decision for how often you need to perform maintenance. How often a business needs EPM is based on environment and the weather co nditions where the building is ocated. Or it may depend on the quality and type of the equipment. Even the part of the city in which your building is found can be significant in this decision. Stadiums, auditoriums, office buildings downtown or in inner ring suburbs in most cities are ripe for attention given that the age of these neighborhoods is usually older and typically built with greater density. In general, annual EPM by a licensed professional, with a full de-energized electrical maintenance service performed at least every three years, is a good practice.

Just like a maintenance contract for your home, the contractor you hire to service your business should: maintain a personalized checklist for your individual company and building; trouble shoot for the potential hazards and identify those that require immediate attention, while maintaining an accounting of the red-flag spots to look out for on a follow-up; and let you know at what point your money is better spent on replace rather than repair. Remember, there is little point in testing and inspections if you don’t plan on fixing the problems.

The recommended thorough inspection includes: switchgear, air circuit breakers, vacuum circuit breakers, air disconnect switches, oil circuit breakers, molded-case circuit breakers, battery stations and chargers, cables and bus, protective relays and uninterruptible power supply systems. Cleaning; dusting; identifying worn, loose or missing parts; checking for unwanted water; checking that batteries, lights, and casing are in working order; and ventilation should be part of the mix for all these areas.

Our clients schedule EPM during times that are convenient for them within their distinct scope of operations. For example, we work with 24/7 businesses such as hospitals that can shut down to skeleton operations during the weekend we are scheduled. Though not entirely disturbance free, interruption during pre-scheduled maintenance service is nowhere near the havoc caused by the disruption of unforeseen, ill-timed, electrical failure. 

In the electrical industry, making wise decisions about electric preventive maintenance has more importance for owners and managers than merely how and when to spend money. As in Detroit, it means taking responsibility for controlling those conditions with the potential to escalate into dangerous fire exposures to building employees and visitors; and in the least, averting the inconvenience of unplanned power outages and equipment break downs. 

Emily Aschinger Martin is president and CEO of Aschinger Electric, a St. Louis based, fourth-generation family business celebrating 75 years of service. One of the largest electrical contractors in the region, Aschinger Electric is ranked seventh by the St. Louis Business Journal (based on total revenue, 2013), which also named Martin one of St. Louis’ Most Influential Business Women in 2014. For more information about Aschinger Electric, please call (636) 343-1211 or visit http://www.aschinger.com

Is Technology Working For or Against Your Business?

in Perspective

By Joe Balsarotti

Technology relentlessly marches on. Just think back ten years, when Blackberry and Palm were the phones of choice, computers ran Windows XP and the iPod was everywhere. Now, connected thermostats, Dick Tracy watches, tablets on the job site, and constant attacks by hackers are the news of the day.

The lifeblood of small businesses is contained in their computers: customer lists, invoices, accounting, designs, tax returns, bank registers and more. To lose this data is usually the death knell of a business. Only six percent of all businesses were still around five years after a “major loss” of computer records, 43 percent of firms taken out almost immediately, according to a Gartner survey.

As startling as those statistics are, what is even more startling is that many small businesses turn to ‘the kid down the street that they’d never, never, never let their daughter date’ for IT help, giving them extensive access to financial, legal and personal information. As Grand Moff Tarkin said to Princess Leia, “You’re far too trusting my dear….”

With the advent of the smart phone and tablet, technology seems much easier and information so much closer, but it is also much easier to lose. ‘The Cloud’ brings lightning and rain if you seed it with easy-to-get goodies. It isn’t some mythical place where everything is secure. In reality, it encompasses data centers across the world where some of our rules (and laws) don’t apply.

Target, Home Depot, and Apple are ripe targets to be sure, with millions of users, but when those entities harden their defenses, where do you think the hackers will look next? Your business is the next front in the battle with techno-terrorists.

  • How vulnerable is your business? Ask yourself these questions to get an idea.
  • Does someone perform regular maintenance on your equipment? Computers, servers and the like require the equivalent of an ‘oil change’ just as much as any other machine in your business.
  • Is the person you trust with your most valuable asset, your data, a professional or a hobbyist? Professionals keep up with industry news, they have colleagues to confer with on more involved projects and they can articulate their value to you. Hobbyists, know a lot about the specialty they are interested in, but what good is a hardware guy, when your software doesn’t work right?
  • As with any other tool, you need the right one for the job. Are you buying Yugos when you need panel vans, or a backhoe? Could that computer advertised right next to toilet paper really be the right machine to run a business on for 3-5 years?
  • What disaster plan do you have? If your office burns to the ground, where is the second set of tax records, A/R, A/P and all those drawings, models and customer notes? How much time will not be spent ‘doing  business’ but instead trying to put the digital pieces together?
  • What security have you implemented to keep your financial, legal and customer data safe? Does every employee have to ‘log into’ their machine with a password? Does everyone, including the janitor know that password? Can you track their usage?
  • Are you using a ‘free’ antivirus, trusting that someone worked hundreds of thousands of hours to develop a piece of security software out of the kindness of their heart? Really???
  • Do you REALLY have a technology plan?

Computers and technology can be a boon to businesses, especially small businesses by allowing one to do the work that used to take many. They allow free exchange of ideas and allow designs to come to life in proposals before a single beam is lifted, increase cash flow by allowing instant information on invoicing and payments, and free staff up to deal with clients and prospects instead of pushing paper around, but computers can only work well, when they are treated and maintained as the invaluable tools they are.

In future installments of this column, we’ll look at these pitfalls in depth and explore the rise of new, exciting technologies which can benefit your business. Have a question you want answered in a future column? Send it to me.

Joe Balsarotti is President of Software To Go and is a 35 year veteran of the computer industry, reaching back to the days of the Apple II. He served three terms as Chairman of the National Federation of Independent Business (NFIB) Missouri Leadership Council; was Chairman of the Clayton, Missouri, Merchant Association; Chaired Region VII of the Federal Small Business Regulatory Fairness Board; and currently serves on the Dealer Advisory Panel of the ASCII Group, an organization of over 1000 independent computer and technology solution providers in North America. 

Don’t Be the Breach In Data Management

in Perspective

 By Lucie Huger

It’s easy to understand why the retail and banking industry are highly motivated to protect themselves from a data breach, less so for service providers, like the construction industry. That is until you realize that Target’s data breach – the largest ever – is reported to have originated from the breach of an HVAC contractor’s access to Target’s data network. In an industry that absolutely relies on cultivating and sustaining trusted relationships, secure data management is essential. The construction consumer demands it.

To date, the California-based Privacy Rights Clearinghouse reports 189 data breaches made public this year spanning healthcare, retail, financial, government, education, and miscellaneous businesses, including service providers. The breaches involve the three most common causes: negligence, criminal (hackers or the theft of a device), and corporate espionage/malfeasance.

In response to consumer demands, 46 states now have data breach laws. Multiple states may come into play in a single breach. Consider the rupture of trust that would occur if a contractor performing work for a university learns of a data breach in its business, which unleashes malware into the university network. If the university’s student data is compromised, the school can face scrutiny from every state in which its students reside.

On the federal level, a weak link in the chain of data protection could expose contractors to penalties from the Health Insurance Portability and Accountability Act (HIPAA) and Gramm-Leach-Bliley Act (GLBA). Last year, HIPAA announced the tightening of enforcement of protected health information. A contractor providing a value-added promotional service to its hospital client by helping with a ribbon cutting for a newly built cancer wing must ensure its public relations firm doesn’t expose the names of cancer victims, who will be helped by the new facility. HIPAA requires every link in the chain of information be secure.

To protect valued relationships, contractors should carefully consider data breach vulnerabilities in their own operations and demand equal scrutiny from their building partners or vendors who could come into contact with protected information. This would include:

  • Developing policies and educating employees on their role in data management. This includes establishing, publicizing, and encouraging internal reporting mechanisms of suspected breaches. 
  • Creating a data management team with clear responsibilities and a thorough understanding of the types of data collected, processed, and developed. The team should also understand legal responsibilities and regulatory requirements. 
  • Developing a risk assessment and mitigation plan. This includes reviewing vendor contracts to find weak links that could expose data. Even if a company shuns the exchange of data online, they can be held liable for data shared with vendors who do expose that data, however unintentionally, in a breach.  If a vendor doesn’t have an electronic security policy that addresses employee background screening and data management, then your company should write one for them.
  • Consider engaging a third party audit to review policies, compliance efforts, and technical infrastructure. This is often done after a breach. It’s best to find any holes before they are compromised.

Contractors may also consider “cyber” insurance policies, which can afford some protection against losses, but be aware that not all cyber policies cover the risks a company faces. Cyber policies should cover the costs associated with the data breach, including engaging legal counsel, hiring investigators, providing credit monitoring if needed, and enlisting public relations experts to facilitate communications with all parties served by the company.

If a data breach does occur, contractors obviously need to focus on discovering its source, mitigating the impact, and complying with appropriate state and federal regulations. But equally important is taking immediate action to be in a position to recover from the breach. That means engaging legal counsel to provide protection from potential civil litigation and the discovery process through the attorney-client privilege. This is especially important because third party reports from IT forensic, accounting, or crisis communications firms, as well as internal company communications, may be discoverable in civil litigation. If outside counsel is engaged, these communications may be protected under the attorney-client privilege. 

Technology is a wonderful business tool that enables contractors to conduct business much more efficiently. But it carries evolving risks of inadvertent exposure of sensitive information that can destroy a hard-earned reputation. Don’t waste the trusted relationship you’ve build through neglect. Show your customers that you are serious about data management.

Lucie Huger is a member of the data breach practice group and an officer in the health care practice group of Greensfelder, Hemker & Gale, P.C.

 

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