Why develop a Business Continuity Program?

A Business Continuity Program is the complete action plan to help prevent disasters and set up a plan to recover from an unexpected event that interrupts your business. A large percentage of businesses do not survive a disaster and end up out of business. Stay in business for the long term – be ready for disaster and unexpected events with a complete Business Continuity Plan.

A Business Continuity Program is sometimes viewed as an expensive program for many companies. You hear comments like:

“We don’t need it; we have never had a problem.”
“We have insurance.”
“Our people are really good. If something happens they will get us back operational in no time”

Believing these statements could prevent your company from surviving an emergency or disaster event.

If your company has never experienced a problem, consider yourself very lucky. Remember a problem does not have to happen at your facility. What happens if your major supplier or customer has a problem? What if another company in your building or campus has a problem? Any of these problems could impact your business.

You have insurance, but many sources of disasters are not covered by business insurance. Business interruption insurance covers the lost profits, buildings and operational costs. But if you have no business to operate, or no building to work out of, then insurance will not really help.

Sure your people are good, but even the best people will have trouble recovering your business if they do not know where they are going to recover the business and what they need to recover. You could buy everything after a disaster and locate a new building and build out the infrastructure and contact your clients and suppliers, etc. You also have to consider that your best people may not be available to recover your business. They may be hurt, on vacation, stressed due to the disaster or they may have died in the disaster.

By developing a Business Continuity Program for your company and making business continuity part of your corporate culture, you will be well on your way to becoming a company that will be able to survive an emergency or disaster event.

Excerpted from “Business Continuity Program Development – A Basic Guide” developed by Business Continuity & Recovery Consulting

Could your company survive a supply chain problem during a pandemic?

While North America has not entered officially entered the flu season, there is much that needs to be considered by companies concerning their supply chain. When a pandemic strikes, it will be too late to start to investigate the areas of the supply chain that could impact your business, even if your staff does not become sick.

Have you looked closely at you supply chain? Do you know what material each company provides and the percentage of your raw materials that are supplied by each member of your supply chain?

If you find that a significant portion of your materials come from 1 or 2 suppliers then you may have a problem if these suppliers are impacted by a pandemic flu. You need to also identify how close these suppliers are to each other. If they are too close, they could both be affected by a regional quarantine.

You may be thinking that you could easily switch to another supplier if your primary supplier is shut down. This may not be possible. You do not know what percentage of the supplier’s production capacity is used to supply your raw material. If you are taking 30 to 40% of any one supplier’s capacity and other suppliers are operating at near capacity, then they will not have excess capacity to accept your order. Also, how long would it take to find negotiate and accept a new supplier into your supply chain? Would this new supplier accept that once your original supplier was back in production you would move your orders back to him?

So who in your supply chain is the critical supplier? Can you diversify part of you requirements to another supplier in another region? Do your agreements with your suppliers have the correct wording to ensure sufficient supplies during a disruption to the supplier’s work place?

Do your suppliers have a pandemic response plan? Do you?

Some research and checking now could save your company in the future.

Business Continuity Planning in this Economic Cycle

Is business continuity planning something that you need to do during an economic downturn? Or is this a "nice to have" that can be put on the back-burner and looked at when the economy picks-up?

I am going to argue that now is the time you should be developing and implementing a full business continuity plan.

Many companies cut back on their marketing and spending during tough economic times. The same is true for those projects that they know they need to complete but they have always had other projects with a higher priority to take care of first. Business Continuity Planning is one of those projects. As many marketing people will tell you, during tough economic times, you should increase your marketing, not cut back. People still need to know you are in business. Companies still need to buy your services; they need to find you.

So why should you consider developing a Business Continuity Plan now?

I suggest you take a look at your supply chain. Do you have one or two main suppliers of your raw material? Do you have one or two customers that provide over 50% of your revenues? What would happen if any one of these companies went out of business? Could your business survive?

A Business Continuity Plan is not a program that can or should be deferred until the "time is right". The only right time is now to begin developing and implementing a plan.

Disasters happen at the worse possible time. They do not wait until you or your executives say that they can respond to the emergency or disaster event.

My advice is to start your planning now. When everyone else is experiencing problems, you will be able to know that you have thought through your business' primary activities and will know how to respond effectively and efficiently to any emergency event.

Could you use your Business Continuity Plan right now?

The Business Continuity Plan for most companies has taken a long time to develop and consumed numerous resources, in dollars and staff time. It is maintained regularly with updated contact lists and team members are required to sign-off that they have read the plan and understand it. The plan document sits in a big red binder on every manager’s office and people even have copies at home.

But, could it actually be used during an emergency to bring the company back to an operational status?

Here are some things that you need to ask about your plan before answering yes to the question just asked.

How is the document organized? Does it have tables and lists of team members, vendors, clients, inventory, call trees and other great information spread throughout the plan?

Are the actual recovery tasks detailed so that someone with a little bit less experience can follow them and restore or recover the technology and business activities?

Where are the recovery tasks actually located in the document? Are they at the back after pages and pages of company information, the recovery philosophy, schedules and maps? Or are the tasks up front where they should be so that they are readily available and the team members do not have to flip through pages and pages of information that they do not need.

A well organized plan document can save a lot of time during an actual disaster and can also make the maintenance of the plan easier if it is well designed and the layout is actually usable by those people who will need it after an emergency event.

Other reasons to implement Business Continuity planning

What are the reasons that you develop business continuity plans for your company?

Sure there are the usual reasons; if a disaster strikes we will be able to continue operations. We need it to get government contracts. It differentiates us from our competition. It is good business sense to plan for the unexpected.

How about gaining a better understanding of your business? How about helping to make strategic business decisions?

According to a survey conducted by Marsh, an insurance and risk company in the UK, many businesses are now looking at business continuity planning as something more than just a compliance or insurance issue. They are looking at this planning as a good practice to manage their overall operational risk.

These companies can use this planning to spot risky interdependencies, better allocate resources to key processes and activities and improve risk management in their companies.