Major events such as terrorism (New York, 2001; London, 2005), Hurricane Katrina, storm flooding, tornadoes, forest fires and lose of key personal all have brought the issue of Business Continuity Management to the attention of all business owners and executives. They now realize that they need to take steps to improve the chances that their business would survive such incidents and continue to operate, deliver an acceptable level of customer service and generate income.
Less news grabbing, but just as significant, are events such as:
- local infrastructure failures (e.g. internet access or telephone systems);
- access denial due to external incidents (a fire in another company, road traffic accidents, bad weather);
- staff unavailability (winter flu, industrial action, unexpected Lottery win!);
- accidental or malicious corruption or destruction of data;
- theft of company property;
- the failure of key suppliers to meet delivery deadlines.
People's views on business continuity planning vary from: “business … what?”, “It's just common sense, isn't it?” to “Oh god, where do we start?” So let's take a step back and look at how business continuity planning can benefit your business.
Failing to plan is planning to fail – Ben Franklin
10 Reasons why you need a continuity plan
The harsh but simple truth is that there are a hundred and one things that can disrupt and destroy your business. A well thought out, practical plan can mean the difference between coping with a disaster and going bust.
Finding out what you don't know:
A business under threat can be viewed like a patient on an operating table. The priorities are clear: maintain the blood supply (cash flow), oxygen (communication links) and at all costs protect the vital organs (the staff and premises). Business continuity planning starts with a thorough analysis of the business to decide which parts are vital. Is that product or service really essential to what we do?
Why do we need four of those, not two? When viewed like this, the non-critical parts reveal themselves – all the procedures and resources that have appeared over the years, but which aren't really necessary.
Gaining a competitive edge:
Having a business continuity plan can give you the edge over your competitors. It shows your commitment to deliver no matter what happens. Put yourself in your customer's shoes: do you sign the contract with the business that has a business continuity plan? Or the one that doesn't?
To find and keep excellent staff you need to inspire confidence and maintain loyalty. When something goes wrong they expect the business to have a plan and to cope. In return they will give you their best efforts.
Insurance – Hate to Pay it – Can't be without it:
Insurance is an important aspect of addressing business risks, but it costs. A robust business continuity plan will demonstrate your commitment to managing risks and your insurer should consider this when calculating how much your insurance premium will be.
Regulations and Compliance:
The demand for business continuity plans is now trickling down from big business to their smaller suppliers. SOX requires that any publicly traded company that receives more than 18 % or finished goods or 22% of raw material must have a continuity plan.
Added to this, legislation such as the Civil Contingencies Act 2004 now requires category one responders (local councils, health authorities, police, fire etc.) to ensure the business continuity arrangements of their suppliers.
A business continuity plan relies upon communication – being able to give the right person (who can fix the problem), the right info, at the right time. It's also the ability to keep talking to customers, suppliers and staff even if your office is a pile of rubble or just locked up and the key missing.
Normal day-to-day business can surely benefit from better communication. Whether that's having a wider range of tools at your disposal or becoming more disciplined at sending the right information to the right people.
A business that will cope with whatever is thrown at it is a more valuable and reliable investment than others. Ensure this is factored in when asking your bank manager for a loan, when selling some equity or dealing with the new owner when you have decided to sell up and relax.
A negotiation tool:
Knowledge is power. Understanding the principles of business continuity means you can spot weaknesses in other businesses. If your main supplier is asking for a price increase, ask about their business continuity plans. If you spot holes, then ask why you should pay extra when there may be more reliable suppliers out there.
While other business people lie awake at night, you can rest easy knowing your business continuity plan is ready, should the worst happen.