Business Continuity Planning - Explained
What is Business Continuity Planning?
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What is Business Continuity Planning?
Business continuity planning (BCP) refers to the mechanism of developing different measures so as to protect and recover a business from prospective threats. The main objective of BCP is to make sure that the staff as well as assets of the firm remain safe, and the business can cope up effectively during disasters. This type of planning is done beforehand, and the prime stakeholders and executives of the firm are asked to give their views. BCP includes identifying each and every risk that can have a negative impact on the functioning of the firm. It is considered to be a crucial element of the risk management strategy of a firm. These risks involve natural disasters like fire, flood, earthquakes, and cyber attacks. After the identification of risks, it is important for planners to include the following elements in the BCP:
- Ascertaining the impact of those risks on a company's operations
- Executing prevention processes to reduce the risks
- Simulating processes in order to make sure that they function well
- Analyzing the procedure to ensure of its timeliness
Every firm or organization requires to have BCP. No firm would like to face threats or damages because more threats or damages means less revenues, less profits, and more expenses. Firms cannot solely depend on insurance companies for mitigating their losses or risks as they don't give damages for all the losses. Also, your customers may switch to your competitors once your operations are affected.
How Does Business Continuity Planning Work?
Organizations can be affected by a mountain of risks varying from small to disastrous. Business continuity planning enables a company to continue its operations in the event of huge disasters like fire, flood, etc. BCPs and disaster recovery plan are two different terms with different relevance. The latter emphasizes on recovering the IT system of a firm post-crisis stage. A finance organization, located in a big city, can implement BCP by creating a data backup of its computers, and client information off the site. Since the company already has got the backup of its crucial information outside its office, it wont be affected by any disasters or threats disrupting the company's system. However, it must be noted that the BCP tends to be ineffective in case a large number of people get affected by the disaster.
Developing a Business Continuity Plan
A company needs to follow the following steps for creating an effective BCP:
- The Business Impact Analysis: The organization will determine time-sensitive resources and information.
- Recovery: This stage involves organizations to implement procedures in order to retrieve crucial business operations.
- Organization: This stage asks for building a continuity team that will create a plan to effectively manage the disaster.
- Training: The continuity team should be offered sound training, and tested in dummy situations. They should also finish modules related to the plan and strategies.
Organizations may also devise a checklist that includes vital information like the emergency contact details, resources that the members of the team may require, the place where backup information is stored, etc. Besides testing the skills of continuity team, the firm should test the business continuity plan so as to ensure its effective functioning. And, its functioning needs to be checked a lot of times for knowing several risk situations it can be implemented in. This enables in reviewing and controlling the plans shortcomings before the actual disaster takes place (Note: For making a BCP succeed, all employees, whether they are a part of continuity team or not, must completely know about the plan.) Key points
- Business continuity plan refers to a procedure undertaken by the firm to establish a prevention and recovery mechanism, and helping the company from prospective disasters and threats.
- BCP safeguards the company's assets and personnel, and further ensures that their performance doesn't get affected in the event of a disaster.
- A company should test BCPs many times in order to make sure that any drawback is corrected or reviewed at the right time.
Business Continuity Impact Analysis
The creation of a BCP involves a business continuity impact analysis. It determines the consequences that a business might face during disasters. It makes use of the information in establishing decision-making strategies for prioritizing recovery of the business. FEMA offers the Operations & Financial Impacts Worksheet to enable an organization follow an effective business continuity analysis. Organizations function and process executives who are familiar with the business fill required information in this worksheet. These worksheets give a summary of:
- The financial and functional consequences that the business would face during or after a disaster.
- Determining the point where the absence of a specific function or process would cause identified organizational impact.
Once the companies finish this analysis, they know which activities and process of the company hold a huge impact on its financial and economic performance. The stage at which they need to be recovered anyhow is called the Recovery Time Objective.
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