A business continuity plan includes processes and procedures the organisation must follow during uncertainties like natural disasters, fire, or cyberattacks. A series of past events has impacted every business practically. Adverse weather events, geopolitical tensions, and cyberattacks have also increased. Considering this, business leaders predict the chances of increasingly impactful incidents that organizations should manage effectively.
As reported by PwC in its 2023 Global Crisis and Resilience Survey, 96% of the 1812 business leaders opined that their businesses have witnessed turbulence in the last two years, and 76% of them found the most severe impact on the business operations. Due to this, 89% of the leaders cited resilience as the most significant strategic priority. However, 70% were confident in dealing with the disruptions. The research suggests that many businesses lack the foundational resilience requirements for success.
This guide discusses the significant role of a business continuity plan as a foundational element. You will learn its importance and how to create an effective one.
What is a Business Continuity Plan?
A Business continuity plan is a strategic roadmap that helps businesses maintain or quickly restart their operations during disruptions like geopolitical tensions, cyberattacks, or natural disasters.
The continuity plan highlights the processes and prompts the organisations need to follow amidst uncertainties to reduce downtime and protect business processes, assets, human resources, business partners, etc.
Do not confuse a business continuity plan with a disaster recovery plan. The latter focuses on restoring IT infrastructure and operations after a disruption. However, a disaster recovery plan is associated with the overall strategy to ensure business continuity. The continuity plan must inform the activities outlined in the organization’s disaster recovery plan. The two are closely tied.
A business continuity plan is the best way for businesses to overcome disruptions successfully. It offers a set plan and the roles and responsibilities to keep the business going. Without this plan, the firm may take longer to recover from the incident.
Why Business Continuity Planning is Important?
Retaining and expanding the customer base is crucial, whether you operate a small or large business. Since restoring IT is vital for most companies, multiple disaster recovery options are available. You can depend on IT to adopt these solutions. The future of the organisation relies on the people and processes. Hence, by managing the incidents effectively, you can make a positive impact on your organisational reputation and market value, and it can also instill confidence in customers.
Furthermore, evolving customer and regulatory expectations for organizational security and continuity have led organizations to prioritize continuity planning to avoid losses and their associated finance, reputation, legal, and regulatory consequences.
For instance, there is an increasing risk of the regulators withdrawing of ‘license to operate’, which can negatively impact the market value and customer trust in the business.
How to Make a Business Continuity Plan?
Making a business continuity plan or updating the existing one includes some predefined steps:
Assess Business Process
A business continuity plan starts with insight into the most essential part of the business. Hence, the foremost task is evaluating your business processes to finalise the most critical aspects of the continuity plan. Questions like the type of events, most vulnerable aspects, potential losses, etc., should be asked initially. This step determines the operations or processes you are trying to safeguard.
Evaluation is more in demand than ever before. The reason is the complexity of the hybrid workplace, the contemporary IT environment, and the growing dependence on business partners and third-party providers.
Determine your RTO and RPO
The next step is to determine the organization’s recovery time objective (RTO), which is the target timeline between the disruption and restarting operations. The recovery point objective (RPO) should also be measured to suggest the maximum volume of data loss an organization can tolerate.
Every firm has its own RTO and RPO depending on the nature of the business, industry, operational determinants, and regulatory environment. Furthermore, the company’s different parts include RTOs and RPOs that should be considered while developing a continuity plan.
Clarity the Roles and Responsibilities
After determining the RTO and RPO, the business leaders must evaluate the tasks that should be performed, by whom, and in order to ensure business continuity. It is the making component of the business continuity plan, which highlights the roles and responsibilities included in the business. It also includes contact information for urgency purposes, key members, and backup site providers.
Why is it Important to Test a Business Continuity Plan?
Implementing a business continuity plan is not sufficient to guarantee preparedness. Instead, practicing and testing are essential to ensure continuity. Testing the plan helps prepare all the stakeholders for real-time events. This allows them to develop the muscle memory required to respond quickly and confidently during disruptions. It also reveals gaps in the implemented plan.
Furthermore, they help identify areas where objectives are misaligned. For instance, executives may have avoided the significance of restoring some IT systems during the drill. However, this could be important in real-life scenarios.
Several businesses test their business continuity plan twice or four times a year. The widely used tests include tabletop exercises, simulations, and structured walk-throughs. The test teams are generally composed of the recovery coordinator and members from each functional department.
A tabletop exercise is basically held in the conference room, with the team discussing the plan, identifying gaps, and ensuring that the business areas are represented effectively.
In contrast, in the simulation testing, the leaders develop an environment that simulates a real-life crisis, with sufficient equipment, team members, and supplies.
In a structured walk-through, every team member must review his or her role in the plan to identify weaknesses. Some businesses implement drills and crisis role-playing in this test.
Concluding Thoughts
A business continuity plan is essential to keeping the business running during natural disasters, geopolitical disputes, and cyber attacks. The plan equips the team members and leaders to quickly get back on track after the crisis. Hence, you must follow the above-discussed steps to create an effective strategy for your business.
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