Is an Integral Part of Business Continuity Planning
Business Continuity Planning (BCP) is defined as the steps undertaken by a company in order to design a system that is able to prevent potential threats to a company, and also recover from these threats should they be unavoidable.
This system will secure the assets and employees of the company and ensure that when disaster strikes, they will be able to react quickly.
Key Points to Consider:
- Business Continuity Planning (BCP) is the means by which a company is able to set up a system that prevents and helps it recover from potential threats such as earthquakes, floods, typhoons, cyber-attacks, or something like the current pandemic.
- Business Continuity Planning should aim to secure the assets and employees of a company and ensure that they are able to react quickly during unexpected situations.
- Tests should be conducted on Business Continuity Plans in order to make sure that they have little to no identifiable weaknesses which can be fixed.
Business Continuity Planning (BCP) Defined & Explained
During Business Continuity Planning, a business should be able to determine each and every potential threat which has the capability to negatively impact the company's day-to-day operations.
This makes Business Continuity Planning an integral part of the risk management strategy of any organization.
Fire, terrorist attacks, typhoons, cyber-attacks, and pandemics are examples of potential threats that a company may face.
Once such threats are determined, the following should be carried out:
- Considering the potential effects of the risks on the company's day-to-day operations.
- Establishing safety nets and steps to take in order to minimize the threats and their effects to the business.
- Ensuring that procedures are properly tested so that they function well during disasters.
- Making sure that the procedures are acceptable by modern standards.
Threats that adversely impact the company lead to a decrease in revenue and an increase in cost.
These also disrupt operations which leads to delays and bad service quality.
All of these together lead to lost profits and customers.
While insurance might be able to cover part of the increased operating costs and lost revenue, they will not be able to bring back lost customers which may have moved on to other similar businesses.
This is why Business Continuity Plans are essential to any business.
This is also the reason Business Continuity Plans are formulated before threats occur and also why they include input from their employees and stakeholders.
Business Continuity Planning is generally designed to enable a company to carry on its operations during disasters of varying degrees from minor inconveniences to brutal catastrophes.
A Business Continuity Plan differs from disaster recovery plans which are aimed at restoring the IT system of a company after a disaster.
As an example, consider company A:
Company A has a Business Continuity Plan in place that backs up its internal and external data offsite in case something were to happen to their main office.
This ensures that they would still be able to access important data in the event of a disaster.
It is important to note that if a large portion of the population is affected by a certain disaster, the effect of a Business Continuity Plan may be limited, as is the case with the current pandemic.
This is because it is not just the customers that are affected by the pandemic; the employees and owners of businesses are also adversely affected.
A quick fact:
Important steps that a company is required to follow when making a Business Continuity Plan include: business impact analysis, organization, training, and recovery.
Formulating a Business Continuity Plan
The steps for formulating a solid Business Continuity Plan include:
- Business Impact Analysis – the company needs to determine important functions and related resources that are critical to their operations.
- Recovery – during this step, the company should determine and carry out processes that will recover the critical functions of the company.
- Organization – in this step, the company must create a team that will handle the threats and limit their effects to the company. This team is called the continuity team.
- Training – members of the continuity team have to undergo training and testing. They must also undertake activities that review the plan and help them implement the strategies
Checklists which include key details such as important personnel, their contact information, resources required by the continuity team, and locations of backup data may be of use during the formulation of the business continuity plan.
In order to help in the identification and correction of any and all weaknesses in the Business Continuity Plan, the members of the continuity team aren't the only ones that should be tested; the Business Continuity Plan itself should be tested many times over in order to make sure that it is applicable to many different threats.
Important note: for a business continuity plan to accomplish its goals, it is crucial that, even if they are not part of the continuity team, all personnel are informed of the plan.
Analysis of Business Continuity Impact
The analysis of business continuity impact is an important step in formulating a Business Continuity Plan.
The information gathered form the analysis determines what effect the disruption of crucial business functions and processes will have on company operations.
Deciding recovery priorities and strategies is much easier after taking into account the information gained from the analysis.
In order to help in the analysis of business continuity, the Federal Emergency Management Agency (FEMA) has provided an operational and financial impact worksheet.
This should be accomplished by company managers who are well informed about crucial business functions and processes. These worksheets will summarize the following:
- The operational and financial impacts that arise from the interruption of certain business functions and processes
- Determining if the interruption of certain functions and processes will bring about the identified operational and financial impacts
Once the analysis is complete, the company should be able to determine which functions and processes have the biggest impact on their operational and financial operations.
This will allow the company to give priority to those functions and processes in order to achieve the lowest recovery time.
The "recovery time objective" is commonly known as the point in which a function or process must be recovered.
Frequently Asked Questions
Below are some frequently asked questions on Business Continuity Planning that have been briefly answered for you.
Why is Business Continuity Planning important?
Threats that adversely impact the company lead to a decrease in revenue and an increase in cost.
These also disrupt operations which leads to delays and bad service quality.
All of these together lead to lost profits and customers.
While insurance might be able to cover part of the increased operating costs and lost revenue, they will not be able to bring back lost customers which may have moved on to other similar businesses.
This is why BCPs are essential to any business.
What should be included in a Business Continuity Plan?
During BCP, a business should be able to determine each and every potential threat which has the capability to negatively impact the company's day-to-day operations.
It is also important to establish safety nets along with steps to take in order to minimize the threats and their effects to the business.
Procedures must also be properly tested so that they function well during disasters.
Lastly, there should be a final review or testing process that makes sure that the procedures are acceptable by modern standards.
What is the Analysis of Business Continuity Impact?
The analysis of business continuity impact is an important step in formulating a Business Continuity Plan.
It determines what effect the disruption of crucial business functions and processes will have on company operations.
Deciding recovery priorities and strategies is much easier after taking into account the information gained from the analysis.
In order to help in the analysis of business continuity, the Federal Emergency Management Agency (FEMA) has provided an operational and financial impact worksheet.
This should be accomplished by company managers who are well informed about crucial business functions and processes.
These worksheets will summarize the operational and financial impacts that arise from the interruption of certain business functions and processes.
These worksheets will also determine if the interruption of certain functions and processes will bring about the identified operational and financial impacts.
Source: https://fundsnetservices.com/business-continuity-planning
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