What is a Business Continuity Plan? And Why is it Important?
A business continuity plan is a type of business plan that helps businesses prepare for every eventuality that may impact their business, including economic and environmental factors. Learn why business continuity planning is important and the steps to start your own plan.
Business continuity planning is something many companies have been very grateful for – and which others will have regretted not having.
Business continuity plans will have been dusted off or hastily put together in 2020 and into 2021 as companies sought to overcome the enormous disruption caused by the coronavirus pandemic.
When it comes to making sure that a company can cope with threats and protect its people and assets when the unexpected happens, it’s often the plans that were made well in advance that suddenly become invaluable.
So what is a business continuity plan?
This is the document that organisations turn to in just those circumstances – when they are forced by unexpected events to find a way to continue operating.
A business continuity plan can sound similar to a disaster recovery plan. But the latter is concerned primarily with maintaining or recovering company IT systems during and after a crisis. In contrast, a continuity plan will usually incorporate the disaster recovery plan and go much further by setting out contingencies for all parts of the business that might be adversely affected by unplanned disruptions or unexpected events.
At its most simple, the continuity plan sets out the procedures to follow and the systems to put in place when disaster strikes. From personnel and property to IT networks and supplier risk management, it should contain all that’s needed to ensure the business can keep functioning.
Why are business continuity plans important?
The clue is in the name – without it there may be a significant risk of the business being unable to continue.
As lockdowns were put in place in March 2020, for example, companies had to quickly identify alternative working spaces, migrate to virtual working systems, put new communication channels in place and ensure staff could access the resources they needed, to cite just a few examples of the measures taken That’s when business continuity planning becomes indispensable.
A company’s ability to handle a crisis can also affect customer confidence and have long-term repercussions for its reputation.
Recent years have unfortunately provided numerous examples of crises that have had wide-ranging, sometimes devastating, consequences for businesses, from natural disasters and pandemics to terrorist attacks and cyber-attacks.
Even where a crisis or a disaster isn’t potentially fatal to the business it can still have severe consequences, undermining its viability, adding to costs, eating into profitability and resulting in a possible loss of staff and customers.
What are the steps for developing a business continuity plan?
The continuity plan often builds to some extent on business scenario planning, which seeks to identify the potential risks facing a company and set out a strategy for dealing with them.
The number of stages in a continuity plan will vary with the size and type of business and the market it’s in, among other factors. However, the key steps are likely to include:
- Business impact analysis – identify the priorities in terms of the short-term vulnerabilities and threats, such as the loss of certain functions or operations.
- Recovery – assess the resources needed (based on the impact analysis), identify gaps in capabilities and implement strategies to recover critical business functions.
- Plan development – develop the continuity plan, establish the relevant continuity teams, create relocation plans and secure management buy-in.
- Testing and exercises – train and test the relevant teams, including exercises to be carried out to ensure the strategies work properly.
It may also help to devise a checklist that runs through important details such as the resources needed, where and how data are stored and emergency contact information.
How to create a business continuity plan during the pandemic
The fundamental steps in a continuity plan will be the same across a range of different circumstances. Over the last year, however, the focus will inevitably have been on finding a way to keep companies operating through a pandemic in which repeated use of the description ‘unprecedented’ has been fully justified.
There will be some features that are unique or particularly crucial to a continuity plan during a pandemic. For example, the real impact on the organisation may take much longer to understand than it might do in the event of a one-off disaster (such as a fire or flood), while its global nature also poses particular problems for supply chains and all business locations.
Your business continuity plan may still have the same steps, but it will likely need to be updated to reflect the impacts and risks that are unique to a pandemic. For instance, it may require new policies to deal with workplace health and safety, infection risks, distancing requirements and customer-facing protocols.
Where can I find a business continuity plan template?
A quick search online will bring up a number of templates and other resources for continuity plans. Examples of templates that you can customise for your own business include smartsheet and bcpbuilder.
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Jeff is a freelance journalist who writes across finance & business. He was the personal finance editor at The Scotsman & Scotland on Sunday & a member of the Financial Services Consumer Panel. Read more