The Importance Of Business Continuity Plan And How To Make One
A business continuity plan is vital for every business. It helps you to set out how you will prepare and respond as well as continuing your operations after the pandemic. Nothing should be more important to your business than to reduce the losses and minimise recovery time when a pandemic hits.
Being able to analyse and manage the threats posed by a pandemic is critical for your business survival. A business continuity plan can help you handle the impacts when a crisis hits. A comprehensive business continuity plan shall detail your business's risk management strategies and business impact analysis. It shall describe how your business intends to respond to an incident, specification of a recovery plan and defined policies and procedures for managing staff and communication during the crisis.
As part of the planning process, you will need to:
- Identify your core services and what is needed to sustain the supply chain
- Identify arrangement for your employees such as telecommuting, cross-skilling & succession planning
- Develop a communication strategy for employees, customers and suppliers
- Protect the health & safety of your employees
- Consider your financial implications such as cash flow, cost increases and insurance
- Identify contingency plans for the unexpected events
- Schedule how the plan will be tested and updated.
Prevention: Risk Management planning
Risk management planning incorporates the prevention element that identifies, assess & develop strategies to manage risks.
1. ASSESS - The first step is to assess your critical business activities such as key services, resources, staff and things that could affect all of your critical business activities.
2. IDENTIFY - Identify where, when, why & how are these risks are likely to happen on a scale basis and its consequences. Here’s how to help you identify;
- Ask yourself if these risks are internal or external?
- Who might be involved or affected by these risks?
- Ask yourself ‘what if’ to find out more accurate answers
- Brainstorm with people from different department to get different perspectives
- Consider worst case scenarios to spot smaller risks part by part.
- Quick tip: Use mind map/ flow charts to develop a bigger vision and it’s easier for you to add answers easily
3. DEVELOP STRATEGIES - Develop potential strategies to avoid, reduce or transfer risks that you have identified by;
- Evaluating your risks – how severe are them and what are the actions can be taken to avoid and treat them?
- Draw out options to deal with unacceptable risks such as the method of treatment, people who are responsible for the treatment, costs involved, benefits of the treatment, the likelihood of success and ways to measure success.
- Avoid the risks when possible- you may choose not to proceed with the activity if risks are possible. Reduce the risks by having a QC, audit or staff training. Transfer the risks by shifting some responsibilities and cross-training staff, identify alternative suppliers, practice traditional ways of working and more…
- Adequate insurance for your business and staff might save you during a crisis.
Business Impact analysis (BIA)
While BIA is quite similar to risk management planning, a BIA helps to determine what most important activity for your business is and how long your business could stay afloat without these activities. To prepare a business impact analysis, you will need to identify;
- The resources needed to support each activity
- The impact of ceasing to perform these activities
- How long your business could cope without these activities
To identify these answers, here’s a few key questions that you can ask yourself’
- What are the daily activities conducted in each area of my business?
- What are the long-term/ ongoing activities performed by each area of my business?
- How important are these activities to my business? (on a scale basis)
- What are the potential losses if these business activities could not be performed?
- How long could each business activity be unavailable for (either completely/ partially) before my business would suffer?
- Do these activities depend on any outside products or services?
Incident response plan
An incident response plan should contain all the information you will need to respond immediately prior and after an incident/ crisis in terms of containment, control and minimising impacts. The following elements should be in your incident response plan;
- Business continuity plan activation
On the front section of your business continuity plan should include a clear statement of what circumstances should the plan be activated and also the details of the key person/ staff and their substitutes to authorise the activation of the plan.
- Incident response team
Identify and state the key responding persons and their roles handling the incident/ crisis as well as their substitutes.
- Communication plan
Plan the communication methods and timings needed to keep everyone safe while getting your business running in the event of an incident/crisis.
- Contact list
List down all your internal staff & their family member’s contact details, emergency services and external contacts such as your suppliers and clients.
A recovery plan helps to pave the steps to take after the incident/ crisis to help your business operating again with minimal disruptions and shorter recovery times.
Time frame for recovery
- The time frame shall be realistic in order for your business to run normal again
- Create a time frame based on critical business activities in BIA
- Assign a recovery time objective to each critical business activity
- Develop recovery strategies
Prioritise critical business function
- Designate a recovery team (just like your incident response team)
- Review your emergency kit (shall include key documents that are essential for recovery) and contact list
- Maintain communication with your external parties such as suppliers and clients
- Identify alternative suppliers/ facilities and other equipment that can be used
Keep your business operating
- Prepare emergency cash flow or opt for internet banking
- Reduce costs if possible during the incident/ crisis
- Consider different business strategies or models. If going left leads to nowhere, then try going right.
- Consider doing business online (or at least let your business operations run remotely online)
Monitor recovery process
- Always keep your staff up-to-date on what’s going on and what is going to happen for your business
- Contact your insurer and see how well protected your business is
- Seek support for tax assistance, emotional and crisis support.
- Review your recovery process. Did it work and what did you learn from it
Business continuity plan maintenance – Test, evaluate and update schedule
- You should come up with strategies and a schedule for testing if your business continuity plan works out well enough to protect your business amid incidents/ crises.
- Set dates to review and update timetables, deadlines and information of your plan.
- Always keep a detailed revision history of your plan.