When confronted with unexpected business disruptions, investment firms must react swiftly, methodically and successfully or else risk significant financial loss. This level of response requires extensive business continuity planning to ensure all aspects of a firm’s business are evaluated and protected.
The key to a successful business continuity plan lies in understanding the impact a disaster situation could have on a business and creating policies to respond to any such impact. Here are the five key steps to this plan:
FIVE STEPS TO BUSINESS CONTINUITY PLANNING
STEP 1: RISK ASSESSMENT
This phase includes:
- Evaluation of the company’s risks and exposures
- Assessment of the potential impact of various business disruption scenarios
- Determination of the most likely threat scenarios
- Assessment of telecommunication recovery options and communication plans
- Prioritization of findings and development of a roadmap
STEP 2: BUSINESS IMPACT ANALYSIS (BIA)
During this phase we collect information on:
- Recovery assumptions, including Recovery Point Objectives (RPO) and Recovery Time Objectives (RTO)
- Critical business processes and workflows as well as the supporting production applications
- Interdependencies, both internal and external
- Critical staff including backups, skill sets, primary and secondary contacts
- Future endeavors that may impact recovery
- Special circumstances
STEP 3: BUSINESS CONTINUITY PLAN DEVELOPMENT
This phase includes:
- Obtaining executive sign-off of Business Impact Analysis
- Synthesizing the Risk Assessment and BIA findings to create an actionable and thorough plan
- Developing department, division and site level plans
- Reviewing plan with key stakeholders to finalize and distribute
STEP 4: STRATEGY AND PLAN DEVELOPMENT
Validate that the recovery times that you have stated in your plan are obtainable and meet the objectives that are stated in the BIA. They should easily be available and readily accessible to staff, especially if and when a disaster were to happen. In the development phase, it’s important to incorporate many perspectives from various staff and all departments to help map the overall company feel and organizational focus. Once the plan is developed, we recommend that you have an executive or management team review and sign off on the overall plan.
STEP 5: PLAN TESTING & MAINTENANCE
- The final critical element of a business continuity plan is to ensure that it is tested and maintained on a regular basis. This includes:
- Conducting periodic table top and simulation exercises to ensure key stakeholders are comfortable with the plan steps
- Executing bi-annual plan reviews
Performing annual Business Impact Assessments
When a business crisis occurs, the last thing you want to do is panic. The second-to-last thing you want to do is be unprepared. Crises typically arise without warning. While you shouldn't start every day expecting the worst, you should be relatively prepared for anything to happen.
A business crisis can cost your company a lot of money and ruin your reputation if you aren't proactively prepared to handle one. Customers aren't very forgiving, especially when a crisis is influenced by accidents within the company or other preventable mistakes. If you want your company to be able to maintain its business continuity in the face of a crisis, then you'll need to come up with a plan to uphold its essential function
Business Continuity Types
1. Operational
Operational continuity means that the systems and processes your business relies on are able to continue functioning without disruption. As these processes are critical to business operations, it's important to have a plan in place in case disruption occurs so you can minimize the loss of revenue.
2. Technological
Organizations that rely on technology to run want to ensure the integrity and continuity of those systems. For example, while the functionality of Google Drive is not within your realm of control, there are many internal systems that you'll want to maintain and mitigate, like maybe having an offline file storage system to access important documents.
3. Economic
Economic continuity means that your business is still able to continue being profitable during possible disruptions. Every business has its ups and downs, so one thing you'll want to do is future-proof your organization for negative scenarios that can hit the bottom line.
4. Workforce
Workforce continuity means that you'll always have enough staff, and the right staff, to handle the work that comes through your doors, especially during times of crisis.
5. Safety
Workforce continuity goes beyond planning the right roles and staffing the right people to fill them. In order for them to show up every day and perform well, they must feel safe to do so. This involves creating a comfortable work environment, and ensuring that, even during a crisis, people have the tools they need to succeed and feel supported in the workplace.
6. Environmental
Environmental continuity means that your team is able to operate effectively and safely in their work environment. This can mean considering possible threats to your physical office or headquarters, and coming up with plans of action if these issues occur.
7. Security
You want your employees to be safe. You also want your employees and business assets to be secure as well. Security breaches can cause major harm to your operations, safety, and reputation. Continuity in this realm means prioritizing employee security and safety of important business information, and plans of action if the information were to become compromised.
8. Reputation
Customer satisfaction and a good reputation can fuel your flywheel and result in increased revenue. The flip side of this coin, however, is that a tarnished reputation can cause great harm.
Reputation continuity means continuously monitoring conversations about your brand or business, prioritizing customer satisfaction, and coming up with action plans for rectifying situations if your reputation is called into question.
Importance of Business Continuity Plan
A business continuity plan is important because regular operations will need to continue in the event of a crisis -- and sometimes, especially during a crisis. Having a business continuity plan in case of each type of crisis will be helpful to maintaining your operations.
Business Continuity vs. Disaster Recovery
Disaster recovery plans are created as part of an overarching business continuity plan. The difference lies in that disaster recovery plans are technical plans focused specifically on recovering from failures, while business continuity plans manage relationships during a crisis.
For instance, in a larger crisis — like a building being flooded — you may have lost some of your IT services. Thus, included in the larger business continuity plan would be one or more disaster recovery instructions that would focus specifically on recovering those IT services.
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