What is a Business Continuity Plan (BCP)?
A Business Continuity Plan (BCP) is a proactive system designed for preventing and recovering from potential threats to a company. This plan guarantees the protection of personnel and assets, ensuring function in the event of a disaster.
Understanding Business Continuity Plan
Business Continuity Planning is a part of an organisation’s risk management strategy, including the identification of different risks that could impact its operations. These risks span from natural disasters such as fires, floods, and weather-related events to potential cyber-attacks.
Once identified, the BCP should address the following key components:
- Evaluate how each identified risk may affect the company’s day-to-day operations.
- Develop and put in place preventive measures and operational procedures to mitigate the identified risks effectively.
- Conduct thorough testing of the implemented safeguards and procedures to ensure their functionality and efficiency in real-world scenarios.
- Periodically review and update the BCP to reflect any changes in the business environment, ensuring its relevance and effectiveness over time.
BCP is integral for any business as it safeguards against threats and disruptions, preventing potential revenue loss and increased costs that could negatively impact profitability. Relying solely on insurance is insufficient, as it may not cover all costs, and customers may shift to competitors. BCP is a proactive and collaborative process involving input from key stakeholders and personnel for a comprehensive and resilient business preparedness.
Benefits of a BCP
Businesses face a lot of potential disasters, ranging from minor setbacks to catastrophic events. A Business Continuity Plan is designed to enable a company to sustain its operations, especially in the aftermath of major disasters like fires. It is distinct from a Disaster Recovery Plan, which primarily focuses on restoring a company’s IT systems post-crisis.
Consider, for example, a finance company situated in a bustling city. Implementing a BCP involves strategic measures such as offsite backups of computer and client files. In the unfortunate event of a crisis impacting the corporate office, the company’s satellite offices would still retain access to important information.
It’s necessary to recognise that the effectiveness of BCP may be compromised in scenarios where a significant portion of the population is affected, such as during a disease outbreak. Nevertheless, BCPs play a key role in enhancing risk management by preventing the spread of disruptions. Also, they contribute to minimising downtime in networks or technology, ultimately saving the company valuable resources.
How to Create a BCP
Creating a BCP involves a series of steps for companies to ensure resilience in the face of disruptions. These steps includes:
- Business Impact Analysis. Identify time-sensitive functions and related resources. (Further details below.)
- Recovery. Identify and implement steps to recover critical business functions.
- Organisation. Establish a continuity team tasked with creating a plan to manage disruptions.
- Training. Train and test the continuity team, conducting exercises to review the plan and strategies.
To enhance effectiveness, companies can create a checklist covering emergency contact information, required resources for the continuity team, storage locations of backup data, and other personnel details.
In addition to testing the continuity team, it’s required to evaluate the BCP itself. Regular testing, conducted multiple times, ensures applicability across various risk scenarios. This proactive approach helps identify and rectify any weaknesses in the plan, reinforcing its overall efficacy.
Business Continuity Impact Analysis
An integral component of a BCP is conducting a thorough Business Continuity Impact Analysis. This analysis serves to identify the repercussions of disruptions to business functions and processes, facilitating logical decision-making regarding recovery priorities and strategies.
FEMA offers an operational and financial impact worksheet for this analysis. The worksheet is intended to be filled out by business function and process managers who possess a deep understanding of the business. The completed worksheets serve as concise summaries of:
- The financial and operational impacts resulting from the loss of individual business functions and processes.
- Identifying when the loss of a specific function or process would lead to the identified business impacts.
Conducting this analysis proves instrumental in helping companies recognise and prioritise processes that wield the most significant influence on the financial and operational aspects of the business. The point at which these processes must be recovered is commonly referred to as the recovery time objective.
Business Continuity Plan and a Disaster Recovery Plan
Business continuity plans and disaster recovery plans share similarities, but they differ in their primary focus. The latter specifically targets technology and information technology infrastructure, whereas BCPs take a more comprehensive approach, addressing the entire organisation, including aspects like customer service and supply chain management.
BCPs aim to minimise overall costs or losses across the organisation, while disaster recovery plans concentrate solely on technology downtimes and associated expenses. In the context of personnel involvement, disaster recovery plans often engage IT personnel responsible for creating and managing the policy. In contrast, BCPs often involve more personnel who are trained to handle potential processes.
Conclusion
A Business Continuity Plan is developed to expedite the recovery of an organisation in time of a threat or disaster. The plan establishes mechanisms and functions to enable personnel and assets to mitigate company downtime effectively. A BCP addresses all organisational risks that may arise in the event of a disaster, such as floods or fires.
DISCLAIMER: This article is for informational purposes only and is not meant as official corporate advice. Please consult a business coach and disaster recovery expert.