5 Step Guide to Business Continuity Planning (BCP)

Regardless of the size of your business, you need a ‘plan B’ to recover quickly in the event of a natural disaster or a crisis so that you can survive the disruption. A business continuity plan helps you dust yourself off and get back to business quickly and easily.

What Is a Business Continuity Plan (BCP)?

A business continuity plan (BCP) is a protocol for preventing and recovering from potentially significant threats to the company’s business continuity. Such a plan often addresses the need for updated business norms and operational standards in unpredictable circumstances such as natural disasters, data breaches, or large-scale system failures. Such a plan aims to ensure business continuity with as little damage as possible to the regular working environment. As such, it covers everything from business processes to staffing details. A BCP outlines everything necessary to maintain business operations in the most challenging circumstances.

Why businesses need a BCP

• • The COVID-19 pandemic illustrated the downfalls of not having a BCP. Organizations with a plan in place were better able to cope than those without plans.
  • The recorded number of natural disasters has increasedOpens a new window from 375 in 2016 to 389 in 2023. Globally, the loss because of natural disasters was $280 billion in 2023, according to a study by the Swiss Re Institute.Opens a new window
  • There was a cyberattack every 39 seconds in 2023, according to WatchguardOpens a new window . Cyberattacks skyrocketed during the COVID-19 pandemic, ransomware has made a comeback due to ransomware-as-a-service, and cyber espionage is more commonplace. Organizations have to be better prepared to fight disasters, which makes preparing a BCP an imperative for any company.

Also Read: What Is Disaster Recovery? Definition, Cloud and On-premise, Benefits and Best Practices

Business continuity plan (BCP) vs. disaster recovery plan (DCP)

A BCP is often confused with a disaster recovery (DR) plan. While a DR plan outlines the restoration of IT systems and infrastructure, the scope of a BCP is much more broad. It covers the entire organization, not just technology. The end goal of a BCP is to ensure your business’s essential services continue to run in the event of an incident. For instance, if there is an earthquake where your customer service representatives operate, your BCP specifies who will handle customer calls until the original office reopens.

IT systems don’t work in silos. Other departments also need to be restored to meet business demands. 

“Many people think a disaster recovery plan (DRP) is the same as a business continuity plan, but a DRP is only a small, yet essential, a portion of a full BCP,” says Caleb Pipkin, a security expert at Logically. “A BCP is a comprehensive guide on how to continue the mission and business-critical operations during a time of an unplanned disruption.”

Key Benefits of a Business Continuity Plan

A business continuity plan ensures that your organization will be better situated to address your customers needs even in the wake of a disaster. Without a plan, your organization will take longer to recover from an event or incident. This could lead to loss of business, clients, and eventually, revenue. Some some key benefits of a business continuity plan include:

1. Provides a roadmap for action during disasters

Organizations with a well-defined business continuity plan can use it as a roadmap during disruptions. A proactive plan allows the firm to react swiftly and effectively to maintain business continuity without worrying about how to respond. The plan reduces the downtime the business experiences by outlining the steps to follow before, during, and after a crisis.  The result is a faster and more complete recovery in the shortest possible timeframe.

2. Gives a competitive advantage

A fast reaction to a disruption allows organizations to gain a edge over their rivals, leading to a significant competitive advantage in the long run. Clients may also be more confident in your ability to perform during adverse circumstances, strengthening your relationship with your business partners. Acting quickly, competently, and decisively during an unexpected event will reflect positively on your company.

Also Read: 8 Disaster Recovery Software Companies

3. Reduces losses

Business disruption can lead to financial, legal, and reputational losses. Failure to plan could be disastrous for businesses, leading to potential loss of customers and, in the worst circumstances, the inability to recover at all. A well-defined business continuity strategy minimizes the damage to an organization and allows for the reduction of these losses as much as possible.

4. Ensures continuity of employment and safeguards livelihoods

One of the most significant consequences of a disaster is the loss of employment. The loss of livelihood can be curtailed if the business continues to function. A BCP gives employees greater confidence in their employers because they know management is taking steps to protect their jobs.

5. Can save lives

A regularly tested and updated BCP can potentially help save the lives of the employees and the customers during a disaster. For instance, regular fire drills can ensure that everyone knows where to go in the event of an actual emergency. 

6. Maintains brand value and builds resilience

An organization’s brand is a challenging asset to build. A business continuity plan can ensure that your organization continues to function during uncertain times. This will foster goodwill among your customers, employees, and stakeholders and help maintain brand value. It may even help mitigate financial and reputational losses during a disaster.

Also Read: 10 Best Practices for Disaster Recovery Planning (DRP)

7. Facilitates compliance with regulations

Many global standards, frameworks, or regulatory requirements require an organization to maintain a business continuity plan. For example, the NIST Cybersecurity Framework recommends contingency plans; The EU’s GDPR requires a BCP for data protection and privacy requirements; and highly-regulated industries like finance (FINRA) and healthcare (HIPPA) also require BCPs.

8. Secures the supply chain

A BCP can help organizations maintain an uninterrupted flow of raw materials when challenges may stop or slow aspects of their supply chain. For example, a natural disaster may prevent transportation, a labor strike may lead to a work stoppage, or a system outage may prevent the factory from producing products.

9. Boosts operational efficiency

Building a BCP requires an in-depth evaluation of the company’s processes. Undertaking this process can identify areas where the business can improve operations. Essentially, preparing the plan requires you to examine the effectiveness of your current methods and operations.

Also Read: 7 Ways to Build an Effective Disaster Recovery and Business Continuity Plan 

Step-by-Step Guide to Building a Formidable Business Continuity Plan

The COVID-19 pandemic has put the spotlight on preparing for a disaster like never before. Nearly every organization had to implement some sort of business continuity plan — regardless of if they had one prepared. Here are the key steps in building a formidable business continuity plan: 

How to Build a Business Continuity Plan

Step 1: Risk assessment 

This phase involves asking crucial questions to evaluate the risks faced by the company. What are the likely business threats and disruptions which are most likely to occur? What is the most profitable activity of your organization? It is vital to prioritize key risks and operations, which will help mitigate the damage in the event of a disaster. 

Step 2: Business impact analysis

The second step involves a thorough and in-depth assessment of your business processes to determine the vulnerable areas and the potential losses if those processes are disrupted. This is also known as business impact analysis. This process helps the organization define the impact to business operations should a disaster, accident, or emergency occur. It helps in identifying the most crucial elements of the business processes. For instance, maintaining a supply chain might be more critical during a crisis than public relations.

How to perform a business impact analysis: 

• Collating information: As a first step, a questionnaire is prepared to find out critical business processes and resources that will help in the proper assessment of the impact of a disruptive event. One-on-one sessions with key management members may be conducted further to gain insights into the organization’s processes and workings.
• Analysis: Once you’ve collected the information, it is time to perform an analysis based on an interruption in which crucial activities or resources are not available. Typically, you would work on the assumption of a worst-case scenario, regardless of the likelihood of such an event. This approach allows you to zero in on the systems essential to your organization’s survival.
• Preparing a report: The report identifies the procedures to follow during a business disruption, including the minimum staff and resources required for running the organization during a crisis. The report also explains the impact on the revenue, supply chain, and other business expenses during a designated time frame. The business impact analysis report may also include checklists or worksheets that include things like the names and contact information for key personnel, locations of data backups, service providers to contact during an emergency, and more.
• Presenting the report: Usually, this report goes through several amendments before being cleared by the senior management. 

Also Read: Will Extreme Weather Events Affect Your Business? Lessons From the Texas Winter Storm

Step 3: BCP Testing

Typically, organizations test their continuity plans at least twice a year. Several methods are available to test the effectiveness of your plan: 

• TableTop test: As the name suggests, the identified executives go through the plan in detail to evaluate whether it will work on not. Different disaster types and the response to them are discussed at length. This type of testing is designed to make all the key personnel aware of their role in the event of a disaster. The response procedure is reviewed, and responsibilities are outlined, so everybody knows their roles.
• Walk through: In this type of testing, the team members go through their part in the plan with a specific disaster in mind. Drills or a simulated response and disaster role-playing are part of this. This is a more thorough form of testing and likely to reveal the shortcoming in the plan. Any vulnerabilities discovered should be used to update the BCP accordingly.
• Disaster simulation testing: In this type of testing, an environment that simulates an actual disaster is created. This is the closest to the actual event and gives the best case scenario about the plan’s workability. It will help the team find gaps that might be overlooked in the other types of tests. Document the results of your testing so you can compare the improvement from the previous tests. It will help you in strengthening your business continuity plan. 

Step 4: Maintenance

A business continuity plan should not be treated as a one-time exercise. It needs to be maintained, so that it always reflects the organization’s structural and personnel changes. The documentation should be regularly updated to ensure readiness in case of a business disruption.

Also Read: Offsite Data Replication: A Great Way To Meet Recovery Time Objectives

Step 5: Communication

Sometimes executives tend to ignore communication while preparing a BCP. It is a crucial aspect, and your BCP should clearly define who will maintain the communication channels with the employees, regulators, business partners, and partners during the crisis. It should also include their contact information, as well as any pre-written statements for the press or other stakeholders.

Takeaway

A business continuity plan is of paramount importance for a business of any size. Acting swiftly and efficiently when confronted with an unanticipated crisis can prevent unspeakable damages. You can avoid financial and reputational loss by quickly adapting during a disaster.

Howoever, your business may still encounter issues beyond your control. Key executives might not be available, the primary and the alternate data recovery sites might both be out of service, or the event may have damaged the communications network might be damaged. Unexpected factors are common during a natural disaster, but that doesn’t mean your plan was for naught. A business continuity plan is not a one-time exercise. It needs to be continuously evaluated, tested, amended, and maintained so it doesn’t let you down when you need it the most.