Business continuity refers to maintaining business operations or quickly resuming them during and after a disruption. Interruptions typically affect workflows and IT systems since they are arguably the most delicate business assets in any organization. A disruption could be caused by a natural disaster, malicious cyberattack, equipment failure, power outage, or random accident.
Business continuity must not be confused with backup and disaster recovery (BDR). A BDR plan focuses on restoring data in the event of data loss and is only a small but essential part of a holistic business continuity plan (BCP). A comprehensive continuity plan is a company-wide set of guidelines and procedures that cover most of the business assets, HR, shareholders, and customers. The goal of a BCP is to ensure that at least the most essential business functions remain operational during a crisis.
The importance of business continuity
A recent study by Mercer shockingly revealed that 51 percent of organizations lack the basic continuity strategies to cope with disasters such as the current COVID-19 pandemic. Preparedness is key to managing risks and unavoidable setbacks. Crucially, business continuity has more to do with building resilience and tolerance than dealing with the aftermath of a disaster.
A holistic business continuity plan ensures business survival during and after a disaster. According to the Federal Emergency Management Agency, 40 percent of businesses do not bounce back from a disaster, and another 25 percent fail within a year.
Organizations cannot afford long periods of downtime in today’s fast-paced business environment. The implications of business interruption include financial damages, loss of business, tarnished reputation, and the collapse of customers’ trust. A proactive business continuity plan minimizes the risk of extended downtime by increasing the business’s immunity to catastrophic failures through contingency systems.
In some cases, a guarantee of business continuity to a predefined threshold is required for industrial standards or legal compliance. Mandatory continuity mostly applies to businesses involved in supplying essential services and those handling sensitive personal and financial information.
Essentials of a good business continuity plan
A comprehensive continuity plan must include response procedures and clear guidelines to ensure that business-critical operations proceed despite the disruption of regular routines. The development of such a plan follows three main steps:
1) Identify critical functions and their dependencies
Begin by identifying the mission-critical functions within the organization. Be careful if someone suggests you should only consider IT systems; you want to think about each business process and function. Next, analyze their dependencies — the people, resources, tools, or processes enabling them. Examples of dependencies may include personnel, IT assets, communication channels, data, and supply lines. Distinguish vital from nonessential operations based on the core objectives of the business. Go deep and review at length during a round table exercise.
2) Determine acceptable recovery time objectives
Recovery time objectives (RTO) describe the maximum time it takes to resume normal business operations after an interruption. Set realistic recovery time limits for each crucial business function. Although the shorter the recovery time, the better, RTOs largely depend on the available resources, persons involved, and nature of the processes. For instance, a backup generator can restore power to your business premises instantly, but regrouping and mobilizing the workforce to change tactics will take some time. Recovery point objective (RPO) is also something to consider when creating your business continuity plan. RPO is a metric you can use to determine how long you can wait between data backups. This will help ensure all of your most recent files have been backed up to a server, not just the files that were saved at the beginning of the quarter.
3) Develop strategies to maintain key functions
Finally, put in place contingency plans for each business-critical process. Ensure that every business function has the appropriate response measures in case of a disaster. The policy should also describe the chain of command during an emergency and the responsibilities assigned to the departments and individuals affected by the disruption. After formulating the plan, you also have to test and refine it regularly.
Guarantee safety for your business
Having a business continuity plan is not an insurance policy but a guarantee that your business will still perform even in a crisis. Disasters pressure many companies to their breaking points — a holistic business continuity plan gives you a fighting chance during the worst of times.
If you’re ready to have your business prepared for unprecedented circumstances or have any questions concerning how you can complete these planning steps yourself, contact us today. We are glad to share more details of our best practices to help others be better protected.