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A business continuity plan (BCP) is a system of prevention and recovery from potential threats to a company. The plan ensures that personnel and assets are protected and are able to function quickly in the event of a disaster.
BCP involves defining any and all risks that can affect the company's operations, making it an important part of the organization's risk management strategy. Risks may include natural disasters (fire, flood, weather-related events, or pandemics), acts of terrorism, or cyber-attacks. Once the risks are identified, the plan should also include:
BCPs are an important part of any business. Threats, disruptions, or halts to the business activity for any period of time, mean not only losses and higher costs but also difficulty to start back again, which leads to a drop in profitability, financial loss, and potential bankruptcy and liquidations. And businesses can't rely on insurance alone because it doesn't cover all the costs or the customers who move to the competition. It is generally conceived in advance and involves input from key stakeholders and personnel.
Business impact analysis, recovery, organization, and training are all steps corporations need to follow when creating a Business Continuity Plan.
Businesses are prone to a host of disasters that vary in degree from minor to catastrophic. Business continuity planning is typically meant to help a company continue operating in the event of major disasters such as fires. BCPs are different from a disaster recovery plan, which focuses on the recovery of a company's information technology system after a crisis.
Consider a finance company based in a major city. It may put a BCP in place by taking steps including backing up its computer and client files offsite. If something were to happen to the company's corporate office, its satellite offices would still have access to important information.
An important point to note is that BCP may not be as effective if a large portion of the population is affected, as in the case of a disease outbreak. Nonetheless, BCPs can improve risk management—preventing disruptions from spreading. They can also help mitigate downtime of networks or technology, saving the company money.
There are several steps many companies must follow to develop a solid BCP. They include:
Companies may also find it useful to come up with a checklist that includes key details such as emergency contact information, a list of resources the continuity team may need, where backup data and other required information are housed or stored, and other important personnel.
Along with testing the continuity team, the company should also test the BCP itself. It should be tested several times to ensure it can be applied to many different risk scenarios. This will help identify any weaknesses in the plan which can then be corrected.
In order for a business continuity plan to be successful, all employees—even those who aren't on the continuity team—must be aware of the plan.
An important part of developing a BCP is a business continuity impact analysis. It identifies the effects of disruption of business functions and processes. It also uses the information to make decisions about recovery priorities and strategies.
FEMA provides an operational and financial impact worksheet to help run a business continuity analysis. The worksheet should be completed by business function and process managers who are well acquainted with the business. These worksheets will summarize the following:
Completing the analysis can help companies identify and prioritize the processes that have the most impact on the business's financial and operational functions. The point at which they must be recovered is generally known as the “recovery time objective.”
BCPs and disaster recovery plans are similar in nature; the latter focuses on technology and information technology (IT) infrastructure. BCPs are more encompassing—focusing on the entire organization, such as customer service and supply chain.
BCPs focus on reducing overall costs or losses, while disaster recovery plans look only at technology downtimes and related costs. Disaster recovery plans tend to involve only IT personnel—which create and manage the policy. However, BCPs tend to have more personnel trained on the potential processes.
Businesses are prone to a host of disasters that vary in degree from minor to catastrophic and business continuity plans (BCPs) are an important part of any business. BCP is typically meant to help a company continue operating in the event of threats and disruptions. This could result in a loss of revenue and higher costs, which leads to a drop in profitability. And businesses can't rely on insurance alone because it doesn't cover all the costs and the customers who move to the competition.
Business continuity plans involve identifying any and all risks that can affect the company's operations. The plan should also determine how those risks will affect operations and implement safeguards and procedures to mitigate the risks. There should also be testing procedures to ensure these safeguards and procedures work. Finally, there should be a review process to make sure that the plan is up to date.
An important part of developing a BCP is a business continuity impact analysis which identifies the effects of disruption of business functions and processes. It also uses the information to make decisions about recovery priorities and strategies.
FEMA provides an operational and financial impact worksheet to help run a business continuity analysis.
These worksheets summarize the impacts—both financial and operational—that stem from the loss of individual business functions and processes. They also identify when the loss of a function or process would result in the identified business impacts.
Business continuity plans (BCPs) are created to help speed up the recovery of an organization filling a threat or disaster. The plan puts in place mechanisms and functions to allow personnel and assets to minimize company downtime. BCPs cover all organizational risks should a disaster happen, such as flood or fire.