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What are the consequences of a company lacking a contingency plan that addresses incidents that disrupt operations? The major loss of profits and reputational standing are two examples. Negative results like these force businesses to put countless hours toward rebuilding.
Let’s look at how organizations can avoid these impactful outcomes by creating a strong business continuity plan.
A business continuity plan is a comprehensive strategy designed to ensure an organization can continue its essential operations during and after a significant disruption. The goal is to minimize downtime, protect assets, and quickly return to normal operations.
According to PwC, 96% of business leaders stated their organizations experienced disruption in the past two years. Also, 76% said their most serious disruption had a medium to high impact on business operations.
A successful plan should assess all risks, including weather events and cyberattacks. Once a company identifies these vulnerabilities, the plan should also:
Business continuity is a big part of risk management. It enables teams to develop recovery procedures and strategies to mitigate the risks and ensure continuity.
The main goal of risk management is to identify, assess, and manage potential risk. Business continuity planning focuses on proactive actions that help ensure resiliency.
Business continuity increases customer confidence by demonstrating that an organization can handle disruptions and continue delivering products or services without significant interruption.
As a result, customers feel more secure and confident in their ongoing relationship with the organization, knowing their business will be met even in adverse situations.
In today’s business landscape, there are countless rules and regulations. A business continuity plan can help account for regulatory obligations. A business continuity plan starts with a realistic assessment of potential risks.
Companies can use these plans to mitigate these risks, track requirements to meet regulatory compliance during and after a disaster and help teams avoid fines and penalties.
Pre-established plans empower business leaders to act fast during a disruption. This proactively minimizes confusion for team members. It also ensures a coordinated response across the organization.
Stakeholders look to business leaders to take charge when situations occur. Investors, lenders, and other individuals need to know a business can manage risks and uncertainties. A business continuity plan shows that a leader will protect the stakeholders’ investments.
Yes, developing and implementing a business continuity plan requires an initial investment. However, creating this plan can ultimately result in significant cost savings. Businesses save money over time by mitigating the financial losses associated with operational disruption.
Additionally, it provides aid for expenses related to rebuilding operations. Rather than having no documentation or plan for consistency, workers can save time and energy by following the steps outlined. While this doesn’t keep employers from spending money, it gives businesses a jumping-off point.
A strong business continuity plan analyzes all the risks affecting a company’s normal operations. Possible incidents include natural disasters, civil unrest, political violence, and cyberattacks. With this plan, employers can:
Follow these steps to create a plan:
Most teams don’t have a designated business continuity specialist. These professionals are responsible for specific tasks within the business continuity framework. They focus on:
Employers can create a continuity team instead of hiring one person to handle the tasks. This group spearheads the review process and manages the disruption if an incident arises. The business continuity team also ensures the plan is consistent across all business units and updated regularly.
To reduce problems and plan for the future, businesses must understand their risks. Start the planning process by listing every potential threat to operations. Assess the probability and impact of each threat. This planning should be a team effort. Address every threat, including:
Employers must identify and prioritize key business processes, resources, and dependencies should there be a business disruption. These observations can help teams assign recovery time objectives and make decisions about recovery priorities and strategies.
Every business has different recovery requirements. Business leaders must develop strategies to respond to risk events and recover critical functions within their recovery time objectives identified during the risk assessment and business impact analysis.
Creating a recovery strategy includes brainstorming solutions that can create consistency.
Offering training and exercises can help prepare an organization for potential business disruptions. Performing trial runs can make recovery easier during a disruption. This preparation can help identify any missing aspects and possible improvements.
It’s vital to update the organization’s continuity plan regularly. The continuity team should make necessary adjustments as staff members change and emerging risks arise. Learning from past mistakes and trial runs can make business continuity management impactful.
While these two plan types are similar, one can’t replace the other. Disaster recovery plans focus on technology and information technology infrastructure, while business continuity plans examine the operational recovery of key business processes, resources, and dependencies.
Both support critical business functions and incident management, especially for companies that struggle with technology downtimes and related costs. IT professionals generally lead disaster recovery planning by creating plans to recover from unexpected technology disruptions. The prioritized IT resources identified during the business impact analysis will help guide disaster recovery planning.
A business continuity plan can help ensure your team prepares for what’s next. Marsh McLennan Agency's risk management specialists can help you create a proactive plan to address potential disruptive incidents.
Partnering with our team offers your business:
Ready to elevate your business’s incident preparation and improve resiliency and risk management?
Reach out to a specialist today to learn more.
Reach out to a specialist today.
