What Is Business Continuity Planning And Why It Matters For Your Business
In the life of a company, business continuity planning, also known as BCP, should be at the top of the “required” list. This formal planning process critically addresses how a business mitigates business-interrupting risk to its personnel, assets, operations and IT, and ensures that the company will be able to continue operations in the event of a catastrophic event.
Business owners frequently confuse business continuity planning with disaster recovery. The two are connected, but are not the same. Disaster recovery plans are a component within the bigger, more encompassing scope of a business continuity plan. Disaster recovery focuses on restoring a company’s data and IT operations; BCP encompasses all aspects of a company’s operations beyond IT: manufacturing, communications, HR, distribution, etc.
BCP gauges the “what if” impact to operations around the event of disaster — this includes defining the risks and vulnerabilities, and defining the very specific actions that need to be taken to counteract each. BCP holds a strategic position in a company’s overall health, and its importance cannot be overstated.
Planning and Insurance
When a business suffers disruption that affects operations, the impact can range from significant loss of revenue to actually closing the doors permanently. Your thought process may be heading toward Insurance; however, unlike the golden old days when insurance underwriters threw everything and the kitchen sink into a business insurance policy, today businesses can no longer rely on insurance to pick up the slack 100 percent for business risk. In addition, insurance claims do not deliver immediate funds, nor can they address anything other than financial compensation for loss. The actual resumption of operations, reinstatement or access to data, processes and staffing must still be addressed.
Creating A Business Continuity Plan
To create an effective business continuity plan, leadership and key stakeholders in and out of the company must work together to evaluate all aspects of operations, identify vulnerabilities, workarounds to those vulnerabilities, and options for continuing operations with loss of key functional units of the business. Having comprehensive input becomes critical for BCP and its long-term success.
Here are several elements that should be added to the BCP process:
- Via a thorough analysis of your business, identify any and all risks that could impact the business operations
- Determine the impact of such risks on operations — for example, what if your primary office were inaccessible? Or your distribution center burned? Or manufacturing lost power for more than a week?
- Develop a plan to safeguard against and mitigate these risks. Include plans to fully test all aspects of your plan with simulations, to ensure that they do, in fact, work and are viable.
- Conduct an annual review process to ensure BCP is up-to-date and adjust accordingly.
In 2020, every single business suffered from Covid-19. What impact did it have on your business? While companies shut down and sent workers home to work remotely for more than a year, did that negatively impact your business? Perhaps it was positive with higher productivity. Using the pandemic of 2020 as a milestone and gauge for business continuity planning is one good idea. This pandemic is being upheld as the most disastrous disruption in business and lifestyle since the Spanish flu of 1918.
To ensure business continuity regardless of the forces seeking to disrupt company operations, every company should:
- Develop a continuity team
- Analyze the current business climate
- Determine the areas for improvement
- Develop a checklist so that all the criteria are in place including key personnel
- Train the BCP team
Business continuity planning requires intense focus to not only get it right, but also to continue to explore various ways a company can mitigate risk to its operations, IT, assets, and its personnel.