Business continuity plans are vitally important for modern risk management because, unfortunately, there are so many ways for businesses to be disrupted. Your ability to recover quickly from that disruption and resume normal operations is crucial to your long-term survival.
That said, plenty of organizations struggle to craft a business continuity plan. Why not? Because “BCPs” must address many different risks, and typically involve lots of people at your enterprise. So many businesses are just spooked by the complexity of the challenge and keep putting off action from one quarter to the next.
In this article we’ll simplify the process for you. We’ll start by explaining the difference between business continuity and disaster recovery planning. Then we’ll share the key components of a business continuity plan and provide a seven-step process for building one.
What Is a Business Continuity Plan?
A business continuity plan (BCP) is a set of procedures that an organization creates to assure that when a disruption strikes, you can keep key business functions running both during and after the crisis.
The goal of a BCP is to minimize downtime, mitigate financial losses, and maintain or quickly restore critical operations when faced with unexpected disruptions. Those disruptions can include natural disasters, cyberattacks, pandemics, power outages, equipment failures, or other events that might harm normal business operations.
What’s the Difference Between Business Continuity and Disaster Recovery?
Business continuity planning and disaster recovery planning are not the same. They address distinct aspects of an organization’s ability to cope with and recover from adverse events.
Disaster recovery planning is a subset of business continuity planning, and it specifically addresses the recovery of IT systems and data immediately following a disaster. So, it deals with the technical aspects of restoring IT infrastructure and data. Business continuity planning has a broader scope; it focuses on assuring the continuity of key business functions at all times, not just during disasters.
Business continuity planning and disaster recovery planning also differ in their components. Business continuity involves many components, including risk assessments, business impact analysis, recovery strategies, crisis management teams, communication plans, and more; it covers both non-technical and technical aspects. Disaster recovery is all about IT-related components, such as data backup and recovery procedures, IT system redundancy, data centers, and infrastructure.
Business continuity planning is an active and ongoing process. Disaster recovery planning is more reactive because it deals with the recovery phase after an incident has happened.
What Are the Benefits of Having a Business Continuity Plan?
Having a business continuity plan brings three primary advantages.
Minimized downtime. A business continuity plan helps to reduce downtime by allowing organizations to continue operations during and after disruptions. This eventually reduces financial losses and assures business sustainability. (Did you know that the hourly cost of downtime surpasses $300,000 for more than 90 percent of small and medium-sized enterprises?)
Efficient decision-making. As we’ll discuss below, a continuity plan provides clear guidelines for decision-making during a crisis. This reduces confusion and helps leaders make quick decisions which is vital for minimizing damage.
Cost savings. While business continuity planning (and maintenance of that plan) may require an initial investment, it can yield cost savings in the long run. By minimizing the harm of disruptions, organizations can avoid the high costs associated with extended downtime and data loss.
Key Components of an Effective Business Continuity Plan
An effective business continuity plan encompasses many elements. The seven most important ones below.
1. Risk assessment
The first step in business continuity planning is to conduct a comprehensive risk assessment to identify potential threats or vulnerabilities that could disrupt business functions. This assessment informs the development of strategies for mitigation and preparedness.
2. Business impact analysis and recovery objectives
Once you identify your continuity risks in Step 1, perform a business impact analysis (BIA) to understand exactly what the consequences would be for each of those continuity risks. Use metrics such as recovery time objectives (RTO) and recovery point objectives (RPO), which define the maximum allowable downtime and data loss in the event of a disaster, to help you understand just how disruptive the disaster could be.
3. Business continuity strategy
Next, develop strategies that you can implement in response to the disaster, to assure that business operations can continue during the disruption. These strategies usually include data backup, disaster recovery plans, and cybersecurity measures within the organization.
4. Crisis management and communication
Crisis management assures that the strategies you developed in Step 3 will actually be executed when the time comes. Draft clear instructions for who performs what duties; have communication plans at the ready (even something as simple as a phone tree, so employees know who to call) so that you can activate your plan at the needed time, and all important stakeholder groups know what is happening and how you plan to respond.
Documentation plays a pivotal role in business continuity management; it assures that key personnel and stakeholders have access to all relevant information when needed. It includes details of recovery strategies, contact information for external partners, and specific procedures related to the supply chain.
Training and awareness programs assure that people are familiar with what they should do when implementing the business continuity plan. Use drills or other simulations, and use those exercises as tests of your plan. You might find that some parts of the plan don’t work as expected, and need adjustment.
7. Periodic review and update
Risks change. Your business might evolve into new areas of operations, new external threats might emerge, or (most likely) both might happen at the same time. So review your business continuity plan on a regular basis (once every year or two, for example; or after some major event such as a merger or acquisition) to confirm that the plan still fits your needs.
How to Create a Business Continuity Plan in Seven Steps
Here are the seven steps to guide you through creating a business continuity plan.
Step 1: Start the planning process
Planning sets the foundation for everything else. We recommend that you start with assembling a dedicated team that will be responsible for implementing the plan. This team may include individuals from different departments within the organization, including IT specialists, operations personnel, and key decision-makers.
Remember to define clear roles for each team member, as this will come in handy for accountability and efficient collaboration throughout the planning process.
Step 2: Conduct a risk assessment
Identify continuity risks that could affect your organization. This includes natural disasters such as earthquakes or hurricanes, technological risks such as cyberattacks or system failures, and even human-related risks such as workplace violence.
Your goal should be to understand the likelihood of these risks. To do this, you may want to analyze historical data, collect expert opinions, and consider factors specific to your industry. Only after doing so can you prioritize risks based on their potential severity.
Step 3: Perform a thorough business impact analysis
During this step, your organization conducts in-depth reviews of divisions and operations to identify which functions are mission-critical. Within each division, there are specific functions that are important for the organization’s overall health.
To perform a proper business impact analysis, you can begin by engaging key stakeholders from different divisions. For instance, in the research and development (R&D) department, safeguarding intellectual property may be of great importance, while the legal department may prioritize compliance and contract management.
Then, consider both the immediate and long-term consequences. If a supply chain disruption hits your manufacturing department, it will also affect your sales and customer relationships. Uncover and evaluate such dependencies during your business impact analysis.
Step 4: Build the business continuity plan
Now draft detailed procedures for each critical function, specifying how they will be maintained during a disruption. This includes identifying key personnel responsible for handling these procedures, listing the resources required, and building risk communication protocols.
Another good practice is to define the chain of command and decision-making processes during a crisis. Your plan should include clear instructions for activating the plan, testing and updating schedules, and guidelines for post-incident reviews. (We know first-hand that the success of a business continuity plan depends on its clarity and alignment with the organization’s operational needs!)
Step 5: Allocate necessary resources
Consider the technology infrastructure necessary for business operations. This includes data backup and recovery systems, communication tools, or any specialized software essential for critical functions.
Beyond people, technology, and financial resources, consider logistical support such as transportation, alternative workspace options, or supply chain contingencies. Determine how you’ll secure these resources quickly when a disruption occurs. While executing all these steps, make sure you maintain a repository of resource information within the business continuity plan documentation.
Step 6: Create a communication plan
Assure that your plan outlines how and when to notify employees about the situation, their roles, and any necessary safety measures. This includes setting up designated communication channels such as email, phone, or messaging platforms.
Beyond your organization, external stakeholders such as customers, suppliers, regulatory bodies, and the public may need to be informed. Determine how you’ll communicate with these parties and what information will be shared.
To make things easier during a potential crisis, we suggest that you designate spokespersons in advance who will represent your organization and communicate risks to stakeholders.
Step 7: Document the plan
Once you’ve developed your plan, you need to document every aspect. Create a well-organized document that outlines all the strategies and procedures outlined in your continuity plan.
Plus, maintain a historical record of any past crises that your organization faced and how the continuity plan was performed. You can use this data to fine-tune the current plan and learn from past experiences.
Let ZenGRC Be a Part of Your Business Continuity Plan
A robust business continuity plan is a cornerstone of your business resilience. ZenGRC is a governance, risk, and compliance (GRC) management platform that helps you develop business continuity and disaster recovery plans. By prioritizing risk management, incident response, documentation, and effective recovery procedures, ZenGRC ensures that your organizational continuity remains resistant to disruptions.
ZenGRC comes with a centralized dashboard that gives stakeholders a complete overview of your business continuity initiatives, including key activities and associated time frames.