A document that details the functioning of a business during a disruption is called Business Continuity Planning, which is also abbreviated as BCP. Since the disruption is unplanned, the organization needs to have a plan of continuing its functionality and keeping the business afloat.
What is Business Continuity Planning?
A business continuity plan is more detailed and comprehensive than a disaster recovery plan and also contains various contingencies for business processes like HR department, assets and other business partners – common aspects of the business which may be affected.
These continuity plans often include equipment and supplies, back up data, etc. The plan also has emergency contact details of persons to be contacted in an emergency, important and relevant people, amongst others. It provides a detailed strategy and plan of action on how the business is to be maintained for unplanned outages – both for the long term as well as for short term.
The disaster recovery plan – although sounds similar – is different than Business continuity plan but the former is focused only on restoring IT infrastructure and other operations, which is just one part of a Business continuity plan. BCP focuses on the continuity of the entire business.
The BCP is prepared in advance and often involves input from major stakeholders and people in the business. BCP involves all the possible risks which an organization may face and which may affect the operations of the business.
It is a crucial part of the company’s risk management strategy. These risks may be natural disasters like flood, fire or other climate disasters or even more modern cyber attacks.
Once all those possible risks are identified and listed, the plan should contain:
- How operations will be affected by those risks
- Having safeguard procedures to reduce risks
- Testing of those implemented procedures to check if they work
- Reviewing and renewing the process from time to time
BCPs are a crucial part of every organization since threats cause disruption in the working of the company, which results in loss of revenue, which in turn results in higher costs for the company. This not only reduces the profitability of the business but also throws the business many years back. Of course, you have to insure your business, but business insurance doesn’t cover everything. This offers the competition an advantage and customers are lost.
Business continuity plan considers a variety of disasters and in various proportion. The primary purpose of the plan is to help a company to continue its operations when a disaster occurs. The plan should also cover steps to reestablish the office productivity as well as enterprise software so that basic business needs can be met. The plan should also have manual workarounds so that the basic operations can be continued till the computer systems can resume normal functioning. Think of a finance company which is based in a metropolitan city. The BCP of this company will have back up data so that in case of disaster, it will still have all the client information.
A point to consider is that the continuity plan is not as effective if a major portion of the population is affected, as in case of a recent pandemic – COVID 19,
Primarily there are three aspects for a BCP for its important applications and processes:
- High availability: Have capability and processes restored so that the business will have access to different applications regardless of failures. These failures may be in business processes, in IT – hardware or software, and physical facilities.
- Continuous operations: Protect the ability to run things during an unexpected disruption and also during planned outage like planned or scheduled back ups.
- Disaster recovery: Have a way to recover data by having a data centre at different sites. This will be a back up if the primary site is destroyed or is left inoperable because of disaster.
Importance of Business Continuity Planning
- Having a business plan is very important so as to address the problems in the regular working of IT, business processes, infrastructure, etc. It is estimated that an average failure of infrastructure can cost more than $1,00,000 an hour. In order to withstand and endure these threats, many businesses have realized that they need to have not only a better infrastructure but also a back up for everything.
- Companies are now following the pattern to develop a holistic Business continuity plan which can keep their business running, protect their data and retain the customers as well. This will effectively reduce the operating costs in the long run.
- Business continuity plan reduces downtime and helps to achieve consistent improvements in the business. In spite of all these necessities, developing a business continuity plan has become very difficult because the systems are now distributed across various departments, and their integration is not easy. This also creates vulnerabilities. When the critical systems are linked together, this complicates the business continuity planning. The problem is when and if one link of the chain breaks, then the entire impact can cause a ripple effect throughout the business. Apart from loss of revenue, a crucial problem which the organization may face is the loss of customer trust.
- Recovering the data is the most important task for every business. Almost every company has tons of data of customers, competitors, sales data, production schedule, maintenance, and several plans. Recovering IT is important, but so is recovering the rest of the functions. If you are able to recover all of the functions, it results in an increase in customer trust and has a positive reputation of your company in the market.
Features of Business continuity planning
Following are few of the important components of business continuity:
- Strategy: Strategy are the objects which are related to the various strategies which are used by the business for their day-to-day operations.
- Organization: Organizations are objects which are related to skills, structure, communication and duties of the employee.
- Data and applications: The objects which are part of the software that are required to enable business operations and also the method which provides high availability. This high availability is used for the implementation of that software.
- Processes: These are necessary to run a business as well as ensuring smooth and consistent operations of IT processes.
- Technology: The objects which are related or part of the network. They may also be related to industry specific tech, which is mandatory for continuous and uninterrupted operations and provide back up for data and application.
- Facilities: These are the objects which provide a back up site if the primary site is destroyed.
The BCP becomes a reference guide when the continuity event occurs, or crisis takes place and becomes a blueprint for dealing with the crisis or the unexpected event.
Developing a Business Continuity Plan
Since we have already established the importance of BCP, let us look at the steps involved in developing a solid continuity plan.
- Impact analysis: Also known as the study of business impact analysis, here, identification of affected functions and related resources are made, which are time sensitive.
- Recovery: the part where the business identifies as well as implements critical steps to recover important basic functions.
- Organization: In the case of an organization, a continuity team should be created, which will devise a proper and stepwise plan in order to manage the disruption and disaster. This team should be enough in numbers so as to tackle the situation and should also be qualified and trained to curb it.
- Training: Extensive training of the continuity team should be done. The participants should also go over the strategies and plan.
Apart from these, the company should have a checklist which has important contact details such as emergency contact numbers, list of resources that may be needed by the continuity team, storage locations of all backup data. Both BCP and the team should be tested by the company several times to ensure it can be easily applied to risk scenarios. This will lead to the identification of shortcomings in the plan, which can be timely identified and corrected.
Business Impact Analysis
One of the most crucial steps of developing a business continuity plan is developing a business continuity impact analysis. It helps to identify the effects of disruption of business and its processes. It uses this information to make and implement decisions about recovery priorities as well as strategies.
Financial and operational impact worksheets are available, which can be used to determine and check business continuity analysis. This worksheet should be filled by different functions of the business and the process managers who are aware of the business thoroughly. These worksheets will summarize as follows:
- The impacts both operational as well as financial, which have resulted from the loss of individual business.
- Identifying when the loss of a process or function would result in the business impacts.
Performing these analyses will help the companies to prioritize the business processes which have a major impact on the operational and financial functions of the business. The point at which they should be recovered is called a recovery time objective.
Conducting the business impact analysis
The worksheets of financial and operational impacts and business continuity resource requirements are distributed to the process managers along with instructions about the process and how the firms should be field.
Once all the managers have completed their worksheets, this information is reviewed. Gaps or inconsistencies if any, are identified and solved. Meetings may be conducted with individual managers so as to clarify the information and octane missing pieces of information if any.
Once the worksheet has been completed and validated, the priorities for business restoration should be identified. Dependent resource requirements, as well as primary resource requirements, should be identified. This information is used to develop a recovery strategy is.
Developing recovery strategies
In case of any mishap businesses impacted and it may suffer major financial losses. Recovery strategy is our different means to restore the operations of the business to a minimum acceptable level and are prioritized by RTO or Recovery time objectives. These objectives are developed during the business impact analysis.
Many resources are required for recovery strategies like equipment, people, facilities, materials, information technology, etc. Detailed analysis is to be conducted on resources that are necessary to execute recovery strategies.
For example, if there are many backup machines available to perform the function of a failed machine, then there is no resource gap, but if machines are lost in fire or floods, and insufficient inventory is available to fulfil the customer orders. Different facility can be used to make the orders. This facility can be contracted or owned.
Many strategies involved collaborating with third parties or reciprocal agreements. Knowledgeable staff are consulted to determine what will work and what will not work. Different alternatives should be explored and presented to the management for their approval.
The decision on spending is also taken by them. Different recovery strategies may be available depending on the size of the company and the resources available.
Another option is to utilize other facilities which perform similar functions. Operations can be allocated to a different site, assuming that both of them are not impacted by this incident. This strategy makes as a mission that surviving site has the capacity and resources to complete the work of the impacted site. Different prioritization of productions or service levels is done.
Telecommuting can be done in which the staff can work from home with the help of remote connectivity. It is used in combination with other strategies as well so as to reduce the requirement of an alternate site. The strategy ensures that the commuters have a proper home environment and are well equipped with have required machines like a computer, broadband connection, etc. in order to work.
In case of emergencies, The space available at the different site can be used for business purposes. Conference rooms, restaurants and other training rooms can be converted into office space when required.
Partnerships with other companies can be done so that you can support each other during the event of a disaster. As the missions are made that space is available with both of them, including basic requirements like to communication, information technology, and other necessary things to run business operations.
Agreements are negotiated for such type of shared business continue to plan. These agreements should be reviewed periodically to determine if they should be changed or kept the same.
Third-party vendors can be used to provide support for business continuity and information technology recovery. These external suppliers provide complete business support, including data centers, live office, and other necessary things. The cost and the availability of these options may vary depending on the region and the type of disaster.
Pinky is an MBA in Marketing from the University of Mumbai. She loves helping people out in learning Marketing and sharing latest ideas and tactics for growing businesses.