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Business Continuity Planning

November 17, 2020

As the news spewed, the shelves emptied, and the directions from trusted sources evolved, did your business have a well-developed plan of action to follow? Were there tested methods easily rolled out to direct your employees, contractors, and clients during this time of daily change? If there is a written plan, is it current and complete based on risks to your business? Does your plan address how to move to remote operations or execute a reduction in work force?  If you answered “yes” to all these questions, there is a good likelihood that your business quickly and smoothly transitioned to operating in the “new normal” that we are currently experiencing.  Afterall, the shorter the timeframe to recover from an adverse event, the greater the chances are that there will be less loss in terms of business, productivity, and confusion among employees. Running a successful company requires that your business remains operational during a variety of different situations including natural disasters, technical and human hazards, and even pandemics.

Business continuity planning is a proactive approach to avoid and mitigate risks associated with a disruption of operations. A written Business Continuity Plan (BCP) details the procedure to be taken before, during, and after an event to maintain the viability of an organization. One goal of a strong business continuity plan is to continue the delivery of products and/or services within the acceptable time frames and predefined capacity when there is a disruption. During planning and development of their BCP, organizations should consider what their essential services and critical operations are. To elaborate, a company that makes a product, knows the resources required to meet or exceed their customers’ demand and therefore, are able to determine how long the company can operate with current resources in use and stored as well as determine the acceptable length of a downtime before they must return to operations (RTO). How many days, weeks, or months, can the company continue during interruptions? What if their resource supply chain is interrupted? These questions and others should be addressed while conducting a comprehensive review of essential services and critical operations. Essential services may include serving customers, maintaining good customer relations, supporting employees and sustaining core functions, such as accounting, IT and technology support. To understand “what it will take” to restore essential services and critical operations, pre-planning for disasters is a must.

From a natural disaster such as a tornado to a technology downtime event or utility failure, each circumstance effects multiple aspects of your business such as loss of workforce, loss of customers, loss of reputation, loss of productivity, or complete failure, all which result in a financial loss. Avoiding downtime altogether or expediting recovery to “normal” operations reduces risk and ultimately the impact of an emergency on the total bottom line.

Developing a business contingency plan must include assessing the risks that impact your business related to natural, technical, and human hazards. For each risk identified, what is the impact to the organization from a human, property, and business impact? Equally important, organizations should look carefully into their preparedness for responding to the hazards.

Preparedness includes training staff how to respond in a variety of situations. The response may be as simple as calling “911” or much more complicated with specific actions to take such as deploying equipment or shutting down critical equipment during severe weather. Without an assessment of the risks and understanding the impact, appropriate resources may not be planned, and employees will not be trained and ready to take swift action. Having a realistic approach toward contingency planning is an investment.

Financial loss may be among other consequences of a lack of a business continuity plan. Fires in structures not related to wildfires caused $11.1 billion in property damage in 2018, up 3.7 percent from the 2017 loss of $10.7 billion. AccuWeather estimates the total U.S. damage and economic loss due to weather-related causes in 2019 to be $142 billion, according to AccuWeather Founder and CEO Dr. Joel N. Myers, based on an analysis incorporating independent methods to evaluate all direct and indirect impacts of the events based on a variety of sources.

The $142 billion estimate includes 2019 damages and losses due to California wildfires ($80 billion), hurricanes ($22 billion), tornadoes and severe local storms ($19.5 billion), flooding ($12.5 billion) and winter storms ($8 billion). AccuWeather’s estimate includes, among other factors, damage to homes and businesses, as well as their contents and cars, as well as job and wage losses, farm and crop losses, infrastructure damage and auxiliary business losses, and also the long-term impacts unique to the particular weather events such as the lingering health effects resulting from flooding and the disease caused by standing water as well as health impacts from poor air quality from forest fires. While this estimate includes many factors, what may not have been considered is your business’s loss is the cost of each human life that is lost or even future litigation. What is the cost of failure to prepare? Companies with thorough business continuity planning can react more quickly and reduce time to recovery. In 2020, many businesses re-invented their operations one or more times based on the guidance of the local, state, or national public health directives. In this unique situation, are the obstacles your organization has encountered during 2020 become “lessons learned”? Calling obstacles “lessons learned” activates a non-blaming culture enabling leadership and staff to more effectively and thoroughly speak of the issues and obstacles that they have worked through over the last few months or during other adverse situations. An individual or team should be identified to document and summarize lessons learned from each division/functional area and guide the follow up on areas to improve. New policies and/or procedures that were based on immediate need should be formally added to the company policies and procedures through the established process.

Once a BCP is developed, it must be tested through organized practice. Employees must be trained about their roles and expected actions during various events during orientation, periodic reviews, and each time there is a change procedures or related resources.  Testing the plan can be achieved through conducting a tabletop exercise which involves introducing a simulated scenario and talking through the response. This allows company representatives to identify gaps in the plan or procedures that won’t flow as designed.  More advanced tabletop exercises will include representatives from external partners and local response agencies such as police, fire, emergency management, and public health agencies.

At Mergence Global, we guide organizations through the phases of developing a unique business continuity plan, updating existing BCPs to capture the “new” or “temporary” way of doing business, and testing the plans.  As the “new normal” continues and evolves, so should your written plans and the related training. Each organization’s situations and resources are unique and require an on-going cycle of preparedness.

Creating a business continuity plan is a time-consuming task that requires combining emergency planning expertise with company knowledge. It’s worth the time, money, and effort to plan and practice in advance of a disaster. Backed by 30 years of experience, Mergence Global professionals work closely with companies to prepare for the unexpected.

Contact Mergence Global for your business continuity planning. Together with our team of professionals, we can develop your business continuity plan.  Please see our services below:

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