Why Business Continuity?
If you had to imagine a worst-case scenario event for your business, what would it look like? It could be a major data breach, which is becoming more frequent across different industries, a malware attack, or perhaps even a natural disaster – all potentially catastrophic and certainly disruption-causing scenarios that any business owner would want to keep at bay.
The truth is that the unexpected happens all too frequently in the business world. Businesses that don't plan ahead risk facing anything ranging from operational disruption to significant financial losses, and even business closure. Therefore risk mitigation through business continuity planning isn't optional, it must be at the core of all business operations. After all, anticipating the unforeseen and avoiding major disruptions is critical to any successful business.
Breaking Down Business Continuity Planning
Business continuity planning is the process of creating operational systems and processes that aim to prevent, recover from, and increase your business's resilience to potential threats. At its core, a business continuity plan assesses risks posed to your business by natural disasters, cyber-attacks and other threats, while ensuring that operations can be resumed within a reasonable period to mitigate losses.
A business continuity plan typically considers three key business elements: resilience, recovery, and contingency.
- Resilience: your business's ability to anticipate and mitigate risk while continuously adapting in the face of ever-changing threats.
- Recovery: the arrangements in place that restore business function, established through detection, correction, and testing.
- Contingency: your business's general capacity to cope with the disruption that was truly unforeseen and any final responses should resilience and recovery fail.
Bringing in independent consultants to carry out a Business Impact Analysis (BIA) can reveal the areas where you are most vulnerable and what measures you need to implement to ensure that your organization is prepared. It will give you confidence that your company's operational risk and resilience strategies will work effectively if they are activated at a time of need.
Why Your Organization Needs A Business Continuity Program
Unexpected events can have devastating effects on businesses of any size but for some, this translates to ceasing trading altogether as the disruption proves too big to recover from.
In 2014, the Federal Emergency Management Agency (FEMA) found that more than 40% of businesses never reopen following a disaster and from those that do, only 29% were still operational after two years. The predicted prospects for businesses that lose information technology for nine days or more following a disaster are even bleaker: bankruptcy within a year.
Digital disruptions and malicious cyber-attacks are devastating ever more businesses and organizations globally. In 2017 WannaCry, the ransomware virus, crippled over 200,000 computers in 150 countries, encrypting files and making them impossible to access. A bitcoin ransomware payment was demanded to restore full access. WannaCry was eventually curtailed but it's just one example of what is now becoming a more frequent cyber-occurrence.
More sophisticated cyber-attacks have occurred and their rate is predicted to increase, and cyber criminals will go after the easiest targets, or simply put, organizations that have failed to identify and repair their digital security gaps. This is also more formally known as the 'resiliency perception gap' whereby the perception of an organization's resilience strategies towards disruptions doesn't match how successful these strategies actually are at preventing or deterring them.
It is therefore essential to conduct comprehensive risk assessments frequently and have a robust business continuity plan in place to protect your business. No business can afford to operate at reduced capacity for long periods of time following a disruption or disaster - a business continuity plan will provide support in restoring function, addressing board and stakeholders as well as reassuring customers. Business continuity planning is then further exemplary of effective risk management.
Insurance companies and auditors across multiple industries often require evidence of a business continuity program. Having a robust continuity strategy will address any compliance requirements, catering to shareholders who expect to see some affirmations of a continuity plan in place as part of your organization's due diligence.
Planning is key if you wish to dramatically increase the odds of business continuity when facing a disruption that's why the core of every good continuity plan is frequent training and annual plan testing.
From training videos to relocation exercises that will test your off-site recovery capabilities, your business needs to take a risk-based approach to ensure resiliency. Staff and stakeholders should know their roles and responsibilities, so if a catastrophe does occur, they'll be able to respond quickly and accurately.