What Is Business Continuity Planning [BCP]?
Business continuity planning [BCP] is the process involved in creating a system of prevention and recovery from potential threats to a company. The plan ensures that personnel and assets are protected and are able to function quickly in the event of a disaster.
Key Takeaways
- Business continuity planning [BCP] is the process a company undergoes to create a prevention and recovery system from potential threats such as natural disasters or cyber-attacks.
- BCP is designed to protect personnel and assets and make sure they can function quickly when disaster strikes.
- BCPs should be tested to ensure there are no weaknesses, which can be identified and corrected.
Understanding Business Continuity Planning [BCP]
BCP involves defining any and all risks that can affect the company's operations, making it an important part of the organization's risk management strategy. Risks may include natural disasters—fire, flood, or weather-related events—and cyber-attacks. Once the risks are identified, the plan should also include:
- Determining how those risks will affect operations
- Implementing safeguards and procedures to mitigate the risks
- Testing procedures to ensure they work
- Reviewing the process to make sure that it is up to date
BCPs are an important part of any business. Threats and disruptions mean a loss of revenue and higher costs, which leads to a drop in profitability. And businesses can't rely on insurance alone because it doesn't cover all the costs and the customers who move to the competition. It is generally conceived in advance and involves input from key stakeholders and personnel.
Businesses are prone to a host of disasters that vary in degree from minor to catastrophic. Business continuity planning is typically meant to help a company continue operating in the event of major disasters such as fires. BCPs are different from a disaster recovery plan, which focuses on the recovery of a company's IT system after a crisis.
Consider a finance company based in a major city. It may put a BCP in place by taking steps including backing up its computer and client files offsite. If something were to happen to the company's corporate office, its satellite offices would still have access to important information.
An important point to note is that BCP may not be as effective if a large portion of the population is affected, as in the case of a disease outbreak.
Business impact analysis, recovery, organization, and training are all steps corporations need to follow when creating a Business Continuity Plan.
Developing a Business Continuity Plan
There are several steps many companies must follow to develop a solid BCP. They include:
- Business Impact Analysis: Here, the business will identify functions and related resources that are time-sensitive. [More on this below.]
- Recovery:In this portion, the business must identify and implement steps to recover critical business functions.
- Organization: A continuity team must be created. This team will devise a plan to manage the disruption.
- Training: The continuity team must be trained and tested. Members of the team should also complete exercises that go over the plan and strategies.
Companies may also find it useful to come up with a checklist that includes key details such as emergency contact information, a list of resources the continuity team may need, where backup data and other required information are housed or stored, and other important personnel.
Along with testing the continuity team, the company should also test the BCP itself. It should be tested several times to ensure it can be applied to many different risk scenarios. This will help identify any weaknesses in the plan which can then be identified and corrected.
In order for a business continuity plan to be successful, all employees—even those who aren't on the continuity team—must be aware of the plan.
Business Continuity Impact Analysis
An important part of developing a BCP is a business continuity impact analysis. It identifies the effects of disruption of business functions and processes. It also uses the information to make decisions about recovery priorities and strategies.
FEMA provides an operational and financial impact worksheet to help run a business continuity analysis. The worksheet should be completed by business function and process managers who are well acquainted with the business. These worksheets will summarize the following:
- The impacts—both financial and operational—that stem from the loss of individual business functions and process
- Identifying when the loss of a function or process would result in the identified business impacts
Completing the analysis can help companies identify and prioritize the processes that have the most impact on the business's financial and operational functions. The point at which they must be recovered is generally known as the “recovery time objective.”
Why Is Business Continuity Planning [BCP] Important?
Businesses are prone to a host of disasters that vary in degree from minor to catastrophic and BCPs are an important part of any business. BCP is typically meant to help a company continue operating in the event of threats and disruptions. This could result in a loss of revenue and higher costs, which leads to a drop in profitability. And businesses can't rely on insurance alone because it doesn't cover all the costs and the customers who move to the competition.
What Should a Business Continuity Planning [BCP] Include?
Business continuity planning involves identifying any and all risks that can affect the company's operations. The plan should also determine how those risks will affect operations and implement safeguards and procedures to mitigate the risks. There should also be testing procedures to ensure these safeguards and procedures work. Finally, there should be a review process to make sure that the plan is up to date.
What Is Business Continuity Impact Analysis?
An important part of developing a BCP is a business continuity impact analysis which identifies the effects of disruption of business functions and processes. It also uses the information to make decisions about recovery priorities and strategies. FEMA provides an operational and financial impact worksheet to help run a business continuity analysis. These worksheets summarize the impacts—both financial and operational—that stem from the loss of individual business functions and processes. They also identify when the loss of a function or process would result in the identified business impacts.