Stay Prepared: Why You Need a Business Continuity Plan

Companies today face an ever-growing list of potential disruptions from natural disasters to cyberattacks. The question isn’t if your organization will face a disruption, but when.

The reality underscores the importance of being prepared, and that’s where a Business Continuity Plan (BCP) comes in. A well-structured BCP doesn’t just help a company bounce back from disruptions; it ensures that your business can continue to operate smoothly when the unexpected happens, minimizing downtime and financial losses. In this article, we’ll discuss how to create a BCP and why it’s an indispensable tool for companies.

Why is a Business Continuity Plan Important?

The importance of a BCP cannot be overstated. Every organization, regardless of size or industry, risks being impacted by disruptions. A BCP provides a well-constructed, effective recovery plan, allowing companies to resume operations quickly. Although creating a BCP requires financial costs, these are minimal compared to the potential losses a company could encounter without a plan in place.

How is a Business Continuity Plan Created & What Does It Do?

Building a formal BCP requires a business to execute two foundational analyses: a Business Impact Analysis (BIA) and a location-based risk assessment.

1. Business Impact Analysis: A BIA should inventory all business functions executed by departments. Any impact to the business, if functions could not be recovered during a business interruption, should then be assessed, establishing the parameters of given recovery time frames. This analysis will prioritize the criticality of areas or functions of the business.

Next, resource requirements should be documented, department by department. All personnel, technology, hardware, and supplies needed to support recovery should be recorded at the very minimum. The results of this analysis formalize a business’s understanding of what areas must be recovered when and what resources are needed to achieve this.

2. Risk Assessment: Next, a location-based risk assessment should be executed. The risk assessment will focus on a single company location, and analyze numerous threats, such as natural incidents, malicious activities, loss of utilities and services, technical failures, information security breaches, and pandemics.

The risk assessment provides insight into what threats pose the highest risk or are most impactful to a specific location critical to business operations. It can also provide insight into weaker control environments that can be enhanced or provide valuable testing scenarios. Once both foundational analyses are executed, businesses can form strategies that shape a BCP.

Every business runs the risk of impact from disruptions. BCPs provide a company with a well-built, effective recovery plan to support its initiative to return to normal business operations as quickly as possible.

While a business continuity strategy comes with a financial cost, it is only a fraction of the price a company could pay when disaster hits without having a plan.

Learning From the CrowdStrike Outage

The CrowdStrike outage is a textbook example of why a comprehensive BCP is crucial for businesses. As one of the leading cybersecurity firms, CrowdStrike’s temporary downtime had a ripple effect, causing significant disruptions for many of its clients who rely on its services to protect their digital assets.

This incident highlights the importance of having a BCP in place – not just for dealing with external threats, but also for managing risks associated with third-party providers. When your business relies on external partners and vendors, your BCP should include strategies to maintain operations during a provider’s outage so your organization can continue to function.

Do You Need a Business Continuity Plan?

Businesses do not have the luxury of predicting when disasters or obstacles will impact their operations. A formal program should be created to provide comprehensive solutions to protect from the negative impacts of business disruptions. Today, financial institutions and healthcare companies are regulated to create robust Business Continuity Programs due to the increased levels of proprietary data they maintain.

Due to a myriad of real-world incidents such as COVID-19, a rise in nationwide cyberattacks, supply chain issues, and a multitude of other threats to someone’s business, the need for strong, comprehensive BCPs has become apparent for industries other than just financial institutions and healthcare systems. Whether your business operates in manufacturing, distribution, retail, or construction, the value of a BCP is vitally important for the protection of current and future company assets. Without a system of preparedness, leadership may expose its employees, stakeholders, and the company to higher levels of risk.

Executive Buy-In & the Cost of Inaction

For most industries, companies are not required to have a BCP – but just because it is not regulated, does not mean it is not incredibly necessary. With the rise of cyberattacks and other threats to business, building and maintaining a BCP is not only needed but crucial for the longevity and success of a business.

Business interruptions are a “when” not an “if” situation, making it pivotal that executives and leaders utilize the resources necessary to create an effective BCP capability. The cost of inaction in the present can mean dire consequences in the long term. While executive leaders enjoy considering the possibility of downtime between operations, it is necessary to invest, upkeep, and train on plans to maintain business structures to avoid the fallout of an unprepared staff during an event.

There Is No Substitute for Preparedness

No one can predict when disasters and cascading obstacles will occur. Companies that are prepared with a response and recovery capability are guaranteed to experience less disruption to their company and assets when disruptions do occur. While a BCP gives a company security and assurance in the present, the true value appears when the plan is needed most critically.

As the intersection of various fields grows, response and recovery plans ensure a company’s future is safe. Whether it is mandated or not per industry regulations, a BCP is only an additive benefit to the protection efforts surrounding a company. Through training and implementation, BCPs streamline the defense practices a company enacts in a time of instability, ensuring that firms return to normal business activity as quickly as possible.

If your organization needs help identifying gaps in your existing BCP or creating new plans designed for your organization, we’re here for you. Get in touch with Wolf’s Business Continuity Planning team to learn more.