Business Continuity planning is a necessary activity for any organization that takes its business and clients seriously. With so many possible disaster and business interruption scenarios looming, it seems to make sense to be prepared and try to prevent or minimize the impact of any disruptions.
Disabling events can come in a variety of shapes. They can vary from more common events like hard drive corruption to more serious events such as building fires or flooding or other natural disasters to even national/international events such as a disruption in energy supplies or widespread power or communications failures.
For smaller companies the impact of the above mentioned and even lesser disasters can hit much harder. For example, unexpected non-availability of key workers alone could be catastrophic, potentially causing as much disruption to business continuity as technological hardship, especially if it occurs during the height of the company’s busy season. If only one person is trained to do particular and/or essential tasks, their unexpected absence can severely disrupt productivity.
Business Continuity is not the same as Disaster Recovery. Business Continuity is a proactive plan to avoid and mitigate risks associated with a disruption of operations which details steps taken before, during and after an event to maintain the financial viability of an organization. Disaster Recovery is a reactive plan for responding after an event to deal with safety and restoration of critical personnel, locations and operational procedures. DR planning is part of Business Continuity planning.
There are a number of very troubling statistics on the impact of unplanned disruptive events:
– A company that experiences a computer outage lasting more than 10 days will never fully recover financially. 50% will be out of business within five years.
– An estimated 25% of businesses do not reopen following a major disaster.
– 70 percent of small firms that experience a major data loss go out of business within a year.
Of companies experiencing catastrophic data loss:
– 43% of companies never reopened.
– 51% of companies closed within 2 years
– 80% of companies that do not recover from a disaster within one month are likely to go out of business.
– 75% of companies without business continuity plans fail within 3 years of a disaster
– Companies that aren’t able to resume operations within ten days (of a disaster hit) are not likely to survive.
– Of those businesses that experience a disaster and have no emergency plan, 43% never reopen; of those that do reopen, only 29% are still operating 2 years later.
– 48% of small business owners surveyed said they have no continuity plan in place.
A pre-defined Business Continuity plan maximizes the chance of a successful recovery by eliminating hasty, on-the-fly decision making under stressful conditions. It details how to get your business back on track after an interruption – in the most thoughtful way possible.
The time for Business Continuity is now. Planning for a disruption or catastrophic event should happen when business is going well, not when disaster strikes. Having a pre-defined, well-documented Business Continuity plan that clearly communicates how your business will respond during an event can help mitigate risk – and is one of the best investments your company can make.