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Making a Risk Management Plan for Your Business

It’s impossible to eliminate all business risk. Therefore, it’s essential for having a plan for its management. You’ll be developing one covering compliance, environmental, financial, operational and reputation risk management. These guidelines are for making a risk management plan for your business.

Developing Your Executive Summary

When you start the risk management plan with an executive summary, you’re breaking apart what it will be compromised of into easy to understand chunks. Even though this summary is the project’s high-level overview, the goal is describing the risk management plan’s approach and scope. In doing so, you’re informing all stakeholders regarding what to expect when they’re reviewing these plans so that they can set their expectations appropriately.

Who Are the Stakeholders and What Potential Problems Need Identifying?

During this phase of making the risk management plan, you’re going to need to have a team meeting. Every member of the team must be vocal regarding what they believe could be potential problems or risks. Stakeholders should also be involved in this meeting as well to help you collect ideas regarding what could become a potential risk. All who are participating should look at past projects, what went wrong, what is going wrong in current projects and what everyone hopes to achieve from what they learned from these experiences. During this session, you’ll be creating a sample risk management plan that begins to outline risk management standards and risk management strategies.

Evaluate the Potential Risks Identified

A myriad of internal and external sources can pose as risks including commercial, management and technical, for example. When you’re identifying what these potential risks are and have your list complete, the next step is organizing it according to importance and likelihood. Categorize each risk according to how it could impact your project. For example, does the risk threaten to throw off timelines or budgets? Using a risk breakdown structure is an effective way to help ensure all potential risks are effectively categorized and considered. Use of this risk management plan template keeps everything organized and paints a clear picture of everything you’re identifying.

Assign Ownership and Create Responses

It’s essential to ensure a team member is overseeing each potential risk. That way, they can jump into action should an issue occur. Those who are assigned a risk, as well as the project manager, should work as a team to develop responses before problems arise. That way, if there are issues, the person overseeing the risk can refer to the response that was predetermined.

Have a System for Monitoring

Having effective risk management companies plans includes having a system for monitoring. It’s not wise to develop a security risk management or compliance risk management plan, for example, without having a system for monitoring. What this means is there’s a system for monitoring in place to ensure risk doesn’t occur until the project is finished. In doing so, you’re ensuring no new risks will potentially surface. If one does, like during the IT risk management process, for example, your team will know how to react.


purpose of business continuity management plan

business meeting

5 Reasons your organization needs a business continuity plan

You never need a continuity plan until you do. Here are 5 reasons you should start yours today.

Read time: 6 minutes

Organizations often underestimate the importance of a business continuity plan. No one ever notices its absence – until disaster strikes. By then, it’s too late.

Any unplanned interruption of normal business processes can create immense hurdles and costly setbacks. Operations suffer. Revenue may suffer even more. 

Unplanned interruptions take many forms. It can be something as simple as a power outage. It could be a major hurricane. Ultimately, a disaster can be anything that disrupts normal business operations. Regardless of the cause, unplanned means unexpected.

With a business continuity plan in place, you position yourself to minimize the impact and damage of an unexpected event. In this article, we will discuss:

What constitutes business continuity planning and the difference between it and disaster recovery.

The top 5 reasons your organization needs a business continuity plan.

The importance of business continuity planning beyond simply restoring operations.

How to get started building a business continuity plan.

planning meeting

What is business continuity planning?

A business continuity plan gives an organization the ability to maintain essential processes before, during, and after a disaster.

Business continuity differs from disaster recovery in its holistic approach to the business.  Business continuity reflects a business-wide implementation plan to ensure the continuation of critical business functions should a disruptive event occur. Disaster recovery “recovers” an organization’s hardware, applications, and data after a technology disruption.

disaster recovery planning

While it takes time and effort to build and test a business continuity plan, you’ll find it well worth it should a disaster strike.

Here are 5 of the main reasons you need a business continuity plan:

Reason #1: Disaster recovery

As noted in the previous section, disaster recovery plays a significant role in the restoration of business operations.

Disasters happen. Their unexpected nature is what makes them so devastating. Being prepared may not prevent the disaster, but it does mitigate the impact on your business.

Research states that 40 percent of small businesses never recover from a disaster.¹ Larger organizations take major hits.

Often when we think of disasters, we think of major events like earthquakes, floods, and natural disasters. These, however, aren’t the only causes of downtime. Data deletion due to human error, poor security habits of users, and incompetent employees or accidents also rank among the prime reasons for IT downtime.

data center backup

Reason #2: Data shows backups are not enough

Most companies deploy some form of data backup. Having data backed up does you no good if you cannot access it, such as could occur in a power outage or need to leave an office site even on a temporary basis. 

Accessing data in the event of a disaster can prove a problem. After all, having a backup is different from accessing it.

It’s a question business continuity planning asks: How will you access that data in the event of an outage? 

For example, the average enterprise backup reaches over a petabyte or more. This pushes conventional storage to its limits. Even several terabytes of data backed up by a small to mid-sized business can strain capacity and bandwidth. And if you don’t have a data center or hardware prepared to handle this volume of data, it does you no good.

By deploying business continuity and disaster recovery solutions leveraging cloud technologies and virtual servers, organizations can run critical business applications from backup instances on virtual servers in the cloud. This approach enables you to effectively “flip a switch” and can keep your downtime to a minimum.

business man and woman meeting

Reason #3: Insurance does not protect your data

Cyberattacks are becoming more sophisticated and successful every year. 

A 2018 study of companies that were attacked found that 68% of breaches took months or longer to discover.² And insurance doesn’t restore data due to data center, server, or backup loss, or even lost access to any of these. 

Insurance isn’t enough to cover all the damages of a disaster. Yes, it can cover the costs of repairs, but in terms of loss of revenue and business prospects due to downtime, it has little effect.

happy business woman

Reason #4: Competitive edge

You have a big advantage over your competitors if you can restore normal operations while they are still trying to figure it out. Getting your network back up and running fast, restoring access to your business data and documents, and reconnecting your employees to communicate with each other and support your customers allows for your organization to stand-out as a leader and one that can be trusted and relied upon.

working remotely

Reason #5: Business must go on

Keeping a business going is essential. Taking a very simple view, if you lose the ability to buy and sell, your business – for all practical purposes – ceases to function.

Business continuity makes this possible by establishing actions that must be taken to ensure operations remain active, no matter the nature of the disaster. For example:

If the power goes out without certainty of when it will be restored, can you switch to a server or network located in a functioning data center?

If you experience a server failure, do you have a backup server (or virtual server) ready to go?

If your office location becomes inaccessible for any reason, can your employees work remotely?

When building your business continuity plan, you consider all the possible disruptions you might encounter. Loss of power or an office location is one of the biggest reasons offsite and redundant backup remains one of the most important aspects of IT reliability.

Your business simply cannot afford downtime. A solid business continuity plan can mean the difference between being back up and running in a matter of minutes versus days or even weeks.

customer support rep

The importance of a business continuity plan

A business continuity plan positions your organization to survive serious disruption. It eliminates confusion common to every disaster, providing a clear blueprint for what everyone should do.

More importantly, your business continuity plan supports:

Communication between employees and customers

Workflow operations essential to business activity

Customer service response, especially if you are a service provider

Business security, keeping your data and information secured wherever you and your team find yourself working

The flow of information and documents

Beyond business operations, your business continuity plan helps people. By keeping operations going, you are better positioned to keep your employees working, protecting the jobs that support them and their families. You also continue to meet the needs of your customers, impacting their lives, and if you are in a B2B business, the lives of their customers.

business meeting

We are here to help

We have helped many businesses develop and implement business continuity plans.

In addition to consulting services like these, our IT services can remove the burden of monitoring and managing your data infrastructure to help give you increased reliability, reduced risk and a comprehensive business continuity plan in the event of a disaster.

Ricoh’s IT services include: 

Server & network management

Device & desktop management

Managed cybersecurity services

End user communication services

Managed cloud services

Data center services

Disaster recovery and backup

IT project work

Remote IT support

We know that your business is unique and has its own needs. In every engagement, you can be confident that we’ll work together to create a business continuity plan and if needed, a technology infrastructure built specifically for you.

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Back to Glossary

What is a business continuity plan?

A business continuity plan refers to an organization’s system of procedures to restore critical business functions in the event of an unplanned disaster. These disasters could include natural disasters, cyberattacks, service outages, or other potential threats. Business continuity planning (BCP) enables organizations to resume business operations with minimal downtime.

Explore additional business continuity planning topics:  

What is the purpose of a business continuity plan?

An optimized business continuity plan encompasses three main components.

First, a company needs to be resilient. That means key business functions are designed within the context of potential disasters. The business continuity team runs a risk assessment against each function for weaknesses and susceptibilities, then establishes protections against them. This supports ongoing risk management policies.

Second, stakeholders prioritize functions and determine which need to be brought online first. Disaster recovery is a key factor, and the faster functions can return to an operational state, the less likely the organization is to sustain lasting damage. IT stakeholders set disaster recovery time goals and develop an actionable disaster recovery plan. After mission-critical functions return to working order, team members work down the list of priority functions, utilizing third-party support to implement recovery strategies as needed.

Third, organizations require a contingency plan with branching paths that describe chains of command, stakeholder responsibilities, and any necessary technical knowledge necessary for emergency management within established disaster scenarios. Finally, an optimized business continuity plan includes a recovery time objective (RTO) to establish the speed at which business operations must be recovered, and a business impact analysis (BIA) to determine how successful recovery efforts were. Likewise, a disaster report shows stakeholders how the disaster recovery planning process can improve in the future.

With these three elements, an organization can weather crises, assess damage quickly, and recover as soon as possible. It's also important to understand that a business continuity plan is a living document that must be updated regularly as the organization adopts new technologies and processes. As organizations grow to scale, they adopt new solutions and infrastructures; these must be accounted for in the plan, or disaster recovery challenges could become augmented by unexpected bottlenecks.

Five elements of a successful business continuity plan

Although each business disruption is unique and many decisions will have to be made as situations unfold, a business continuity plan provides a framework and preparation to guide these decisions, as well as a clear indication of who will make them. A successful business continuity plan includes the following elements.

1. Define a team structure

2. Establish a plan

3. Test your plan

4. Create a crisis communications strategy

5. Educate people on safety procedures

Citrix solutions for business continuity planning

If people can’t access the applications, data, and files they depend on, business stays down—and risks losing money, customers, productivity, reputation, and opportunities every moment it takes to get them back to work. Citrix keeps your business running during unplanned downtimes to ensure continuity of operations.

Additional resources

What is business continuity?

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purpose of business continuity management plan

What is business continuity and why is it important?

Business continuity is an organization's ability to maintain essential functions during and after a disaster has occurred. Business continuity planning establishes  risk management processes and procedures that aim to prevent interruptions to  mission-critical services , and reestablish full function to the organization as quickly and smoothly as possible.

The most basic business continuity requirement is to keep essential functions up and running during a disaster and to recover with as little downtime as possible. A  business continuity plan considers various unpredictable events, such as natural disasters, fires, disease outbreaks, cyberattacks and other external threats.

Business continuity is important for organizations of any size, but it might not be practical for any but the largest enterprises to maintain all functions for the duration of a disaster. According to many experts, the first step in business continuity planning is deciding what functions are essential and allocating the available budget accordingly. Once crucial components have been identified, administrators can put failover mechanisms in place.

Technologies such as disk mirroring enable an organization to maintain up-to-date copies of data in geographically dispersed locations, not just in the primary data center. This enables data access to continue uninterrupted if one location is disabled and protects against data loss.

This article is part of

What is BCDR? Business continuity and disaster recovery guide

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Why is business continuity important?

At a time when downtime is unacceptable, business continuity is critical. Downtime comes from a variety of sources. Some threats, such as cyberattacks and extreme weather, seem to be getting worse. It's important to have a business continuity plan in place that considers any potential disruptions to operations.

The plan should enable the organization to keep running at least at a minimal level during a crisis. Business continuity helps the organization maintain resiliency , in responding quickly to an interruption. Strong business continuity saves money, time and company reputation. An extended outage risks financial, personal and reputational loss.

Business continuity requires an organization to take a look at itself, analyze potential areas of weakness and gather key information -- such as contact lists and technical diagrams of systems -- that can be useful outside of disaster situations. In undertaking the business continuity planning process, an organization can improve its communication, technology and resilience.

Business continuity might even be a requirement for legal or compliance reasons. Especially in an era of increased regulation , it's important to understand which regulations affect a given organization.

What does business continuity include?

Business continuity is a proactive way to ensure mission-critical operations proceed during a disruption. A comprehensive plan includes contact information, steps for what to do when faced with a variety of incidents and a guide for when to use the document.

Business continuity features clear guidelines for what an organization must do to maintain operations. If the time comes for response, there should be no question about how to move forward with business processes. The company, customers and employees are all potentially at stake.

Proper business continuity includes different levels of response. Not everything is mission-critical, so it's important to lay out what is most vital to keep running, and what could stand to come back online at later times. It's crucial to be honest about recovery time objectives and recovery point objectives .

The process includes the whole organization, from executive management on down. Although IT might drive the business continuity, it's essential to get buy-in from management and communicate key information to the entire organization. One other important area of collaboration is with the security team -- although the two groups often work separately, an organization can gain a lot by sharing information across these departments. At the very least, everyone should know the basic steps for how the organization plans to respond.

Three key components of a business continuity plan

A business continuity plan has three key elements: Resilience, recovery and contingency.

An organization can increase resilience by designing critical functions and infrastructures with various disaster possibilities in mind; this can include staffing rotations, data  redundancy and maintaining a surplus of capacity. Ensuring resiliency against different scenarios can also help organizations maintain essential services on location and off site without interruption.

Rapid recovery to restore business functions after a disaster is crucial. Setting recovery time objectives for different systems, networks or applications can help prioritize which elements must be recovered first. Other recovery strategies include resource inventories, agreements with third parties to take on company activity and using converted spaces for mission-critical functions.

A contingency plan has procedures in place for a variety of external scenarios and can include a chain of command that distributes responsibilities within the organization. These responsibilities can include hardware replacement, leasing emergency office spaces, damage assessment and contracting third-party vendors for assistance.

Business continuity standards

Table 1 lists the standards in the ISO 223XX Series that apply to business continuity and related activities. The ISO 22398 and 22399 standards are also worth a look.

The ISO 223XX Series -- Societal Security

Table 2 lists the Business Continuity Institute's Good Practice Guidelines. The guidelines provide a comprehensive foundation for understanding the business continuity process, and they map closely to the ISO 22301 standard.

U.K. Standards and Good Practices

Table 3 provides a partial listing of standards, regulations and good practices developed in the U.S. by several different organizations such as ASIS International, the National Fire Protection Association, the Federal Financial Institutions Examination Council, the Information Systems Audit and Control Association, the Financial Industry Regulatory Authority, the Federal Emergency Management Agency and the National Institute for Standards and Technology.

U.S. BC/DR Standards and Good Practices

Business continuity vs. disaster recovery

Like a business continuity plan, disaster recovery planning specifies an organization's planned strategies for post-failure procedures. However, a disaster recovery plan is just a subset of business continuity planning.

Disaster recovery plans are mainly data focused, concentrating on storing data in a way that can be more easily accessed following a disaster. Business continuity takes this into account, but also focuses on the risk management, oversight and planning an organization needs to stay operational during a disruption.

Business continuity and disaster recovery planning

Business continuity development

Business continuity starts with initiating the planning project. Business impact analysis (BIA) and risk assessment are essential steps in gathering information for the plan.

Conducting a BIA can reveal any possible weaknesses, as well as the consequences of a disaster on various departments. The BIA report informs an organization of the most crucial functions and systems to prioritize in a business continuity plan.

A risk assessment identifies potential hazards to an organization, such as natural disasters, cyberattacks or technology failures. Risks can affect staff, customers, building operations and company reputation. The assessment also details what or who a risk could harm, and the likeliness of the risks.

The BIA and risk assessment work hand in hand. The BIA provides details on potential effects to the possible disruptions outlined in the risk assessment.

Business continuity management

It's important to designate who will manage business continuity. It could be one person, if it's a small business, or it could be a whole team for a larger organization. Business continuity management software is also an option. Software -- either on premises or cloud-based -- helps conduct BIAs, create and update plans and pinpoint areas of risk.

Business continuity is an evolving process. As such, an organization's business continuity plan shouldn't just sit on a shelf. The organization should communicate its contents to as many people as possible. Implementation of business continuity isn't just for times of crisis; the organization should have training exercises, so employees know what they'll be doing in the event of an actual disruption.

Business continuity testing is critical to its success. It's difficult to know if a plan is going to work if it hasn't been tested. A business continuity test can be as simple as a tabletop exercise , where staff discuss what will happen in an emergency. More rigorous testing includes a full emergency simulation. An organization can plan the test in advance or perform it without notice to better mimic a crisis.

Once the organization completes a test, it should review how it went and update the plan accordingly. It's likely that some parts of the plan will go well but other actions might need adjusting. A regular schedule for testing is helpful, especially if the business changes its operations and staff frequently. Comprehensive business continuity undergoes continual testing, review and updating .

Business Continuity Institute

The Business Continuity Institute (BCI) is a global professional organization that provides education, research, professional accreditation, certification, networking opportunities, leadership and guidance on business continuity and organizational resilience .

The BCI, which is based in the United Kingdom, was established in 1994 and features about 8,000 members in more than 100 countries, in the public and private sectors. Business continuity professionals and those interested in the field can use the products and services available from the BCI.

The BCI's objectives and work includes raising standards in business continuity, sharing business continuity best practices, training and certifying BC professionals , raising the value of the BC profession and developing the business case for business continuity.

The institute's many published resources include its Good Practice Guidelines, which offers guidance for identifying business continuity activities that can support strategic planning.

Professional membership in the BCI conveys an internationally recognized status -- certification demonstrates a member's proficiency in business continuity management.

BCI Chapters have been established in countries or regions where there is a large community of members. The Chapters, which include the United States, Japan and India, have locally elected officers who represent the BCI in their region.

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What is the Main Purpose of Business Continuity?

May 25, 2022

Business continuity is the term used to describe an organization’s ability to keep functioning during and after an emergency or major disruptive event. The main purpose of business continuity is to protect an organization’s critical operations, assets, and personnel so that it can continue to function when faced with a major disruptive event.

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A disruptive event is an unforeseen or unplanned event that interrupts the normal flow of operations. Disruptive events can range from small disturbances, such as a power outage, to large-scale disasters, such as a hurricane. The impact of a disruptive event can be catastrophic, causing extensive damage to property and infrastructure, and leading to loss of life. In the aftermath of a disruptive event, it is important to have a plan in place for how to respond.

Ensures Business Continuity in the event of an Interruption

Any business can be interrupted by an unforeseen event such as a natural disaster , power outage, or equipment failure. While the interruption itself may be out of your control, how you respond to it can make all the difference.

Having a well-developed continuity plan helps ensure that your business can weather any storm and come out unscathed on the other side. In taking steps to identify potential risks and develop contingency plans, Organizations can keep their business up and running no matter what happens.

Minimize Disruptions to Customers, Suppliers, and other Key Stakeholders.

Businesses inevitably go through changes, whether it’s a change in ownership, a shift in strategy , or even just a move to a new office space. However, it’s important to minimize the disruptions that these changes can cause to customers, suppliers, and other key stakeholders.

In any business, it is important to maintain positive relationships with customers, suppliers , and other key stakeholders. This can be difficult when disruptions occur, but there are some steps that businesses can take to minimize the impact .

One way to do this is to clearly communicate the reasons for the change and its expected benefits. This will help to ensure that customers, suppliers, and other stakeholders are on board with the changes and are less likely to be disrupted by them.

In addition, it is important to implement changes gradually whenever possible. This gives everyone time to adjust to the new reality and minimizes the risk of disruptions. By taking these steps, businesses can minimize the disruptions that accompany any change.

Protect the Company’s Reputation and Brand.

That’s why it’s essential for businesses to take steps to protect their reputation. One way to do this is to proactively manage the company’s online presence. This includes monitoring social media and responding quickly to any negative reviews or comments.

Therefore, it is essential for businesses to take steps to protect their reputation and brand. This can be done in a number of ways, such as actively managing social media presence, monitoring online reviews, and responding quickly to negative feedback.

Safeguard Critical Data and Records

There are many ways to protect data and records, including physical security measures like locks and alarms, as well as digital security measures like encryption and password protection.

Fortunately, there are a number of steps that organizations can take to safeguard their data and records. One of the most important is to create regular backups. By storing copies of critical data off-site, organizations can ensure that they will be able to recover from even the most catastrophic events.,

Compliance with Regulations

Federal and state agencies are increasingly mandating that businesses have a plan in place to deal with disruptions, and a failure to comply can result in significant fines. In addition, many insurers now require proof of business continuity planning in order to provide coverage.

Regular testing of the plan is also essential. Tests should be conducted in a variety of scenarios so that employees are prepared for anything.

In conclusion, business continuity is essential for any company looking to protect its operations, customers, and reputation in the event of an interruption. By following the tips we’ve outlined in this post, you can ensure that your business is well-prepared for any potential disaster. Have you created a business continuity plan yet? If not, now is the time to do so!

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Frequently Asked Questions

The Bottom Line

What Is a Business Continuity Plan (BCP), and How Does It Work?

purpose of business continuity management plan

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purpose of business continuity management plan

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What Is a Business Continuity Plan (BCP)? 

A business continuity plan (BCP) is 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

Understanding Business Continuity Plans (BCPs)

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:

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.

Business impact analysis, recovery, organization, and training are all steps corporations need to follow when creating a Business Continuity Plan.

Benefits of a Business Continuity Plan

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. Nonetheless, BCPs can improve risk management—preventing disruptions from spreading. They can also help mitigate downtime of networks or technology, saving the company money.

How to Create a Business Continuity Plan

There are several steps many companies must follow to develop a solid BCP. They include:

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:

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.”

Business Continuity Plan vs. Disaster Recovery Plan

BCPs and disaster recovery plans are similar in nature, the latter focuses on technology and information technology (IT) infrastructure. BCPs are more encompassing—focusing on the entire organization, such as customer service and supply chain. 

BCPs focus on reducing overall costs or losses, while disaster recovery plans look only at technology downtimes and related costs. Disaster recovery plans tend to involve only IT personnel—which create and manage the policy. However, BCPs tend to have more personnel trained on the potential processes. 

Why Is Business Continuity Plan (BCP) Important?

Businesses are prone to a host of disasters that vary in degree from minor to catastrophic and business continuity plans (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 Plan (BCP) Include?

Business continuity plans involve 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.

Business continuity plans (BCPs) are created to help speed up the recovery of an organization filling a threat or disaster. The plan puts in place mechanisms and functions to allow personnel and assets to minimize company downtime. BCPs cover all organizational risks should a disaster happen, such as flood or fire.  

Federal Emergency Management Agency. " Business Process Analysis and Business Impact Analysis User Guide ," Pages 15 - 17. Accessed Sept. 5, 2021.

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Adapt and Respond to Risks with a Business Continuity Plan (BCP)

What's a business continuity plan.

A business continuity plan (BCP) is a document that outlines how a business will continue operating during an unplanned disruption in service. It’s more comprehensive than a  disaster recovery plan and contains contingencies for business processes, assets, human resources and business partners – every aspect of the business that might be affected.

Plans typically contain a checklist that includes supplies and equipment, data backups and backup site locations. Plans can also identify plan administrators and include contact information for emergency responders, key personnel and backup site providers. Plans may provide detailed strategies on how business operations can be maintained for both short-term and long-term outages.

A key component of a business continuity plan (BCP) is a disaster recovery plan that contains strategies for handling IT disruptions to networks, servers, personal computers and mobile devices. The plan should cover how to reestablish office productivity and enterprise software so that key business needs can be met. Manual workarounds should be outlined in the plan, so operations can continue until computer systems can be restored.

There are three primary aspects to a business continuity plan for key applications and processes:

Evolution of business continuity plans

Business continuity planning emerged from disaster recovery planning in the early 1970s. Financial organizations, such as banks and insurance companies, invested in alternative sites. Backup tapes were stored at protected sites away from computers. Recovery efforts were almost always triggered by a fire, flood, storm or other physical devastation. The 1980s saw the growth of commercial recovery sites offering computer services on a shared basis, but the emphasis was still only on IT recovery.

The 1990s brought a sharp increase in corporate globalization and the pervasiveness of data access. Businesses thought beyond disaster recovery and more holistically about the entire business continuity process. Companies realized that without a thorough business continuity plan they might lose customers and their competitive advantage. At the same time, business continuity planning was becoming more complex because it had to consider application architectures such as distributed applications, distributed processing, distributed data and hybrid computing environments.

Organizations today are increasingly aware of their vulnerability to  cyber attacks  that can cripple a business or permanently destroy its IT systems. Also, digital transformation and hyper-convergence creates unintended gateways to risks, vulnerabilities, attacks and failures. Business continuity plans are having to include a cyber resilience strategy that can help a business withstand disruptive cyber incidents. The plans typically include ways to defend against those risks, protect critical applications and data and recover from breach or failure in a controlled, measurable way.

There’s also the issue of exponentially increasing data volumes. Applications such as decision support, data warehousing, data mining and customer resource management can require petabyte-size investments in online storage.

Data recovery no longer lends itself to a one-dimensional approach. The complex IT infrastructure of most installations has exceeded the ability of most shops to respond in the way they did just a few years ago. Research studies have shown that without proper planning, businesses that somehow recovered from an immediate disaster event frequently didn’t survive in the medium term.

Why is a business continuity plan important? 

It’s important to have a business continuity plan in place to identify and address resiliency synchronization between business processes, applications and IT infrastructure. According to IDC, on average, an infrastructure failure can cost USD $100,000 an hour and a critical application failure can cost USD $500,000 to USD $1 million per hour. 

To withstand and thrive during these many threats, businesses have realized that they need to do more than create a reliable infrastructure that supports growth and protects data. Companies are now developing holistic business continuity plans that can keep your business up and running, protect data, safeguard the brand, retain customers – and ultimately help reduce total operating costs over the long term. Having a business continuity plan in place can minimize downtime and achieve sustainable improvements in business continuity, IT disaster recovery, corporate crisis management capabilities and regulatory compliance.

Yet developing a comprehensive business continuity plan has become more difficult because systems are increasingly integrated and distributed across hybrid IT environments – creating potential vulnerabilities. Linking more critical systems together to manage higher expectations complicates business continuity planning – along with disaster recovery, resiliency, regulatory compliance and security. When one link in the chain breaks or comes under attack, the impact can ripple throughout the business. An organization can face revenue loss and eroded customer trust if it fails to maintain business resiliency while rapidly adapting and responding to risks and opportunities.

Using consulting, software and cloud-based solutions for a business continuity plan

Many companies struggle to evolve their resiliency strategies quickly enough to address today’s hybrid IT environments and changing business demands. In an always-on, 24x7 world, global companies can gain a competitive advantage – or lose market share – depending on how reliably IT resources serve core business needs.

Some organizations use external resiliency consulting services  to help identify and address resiliency synchronization between business processes, applications and IT infrastructure. Consultants can provide flexible business continuity and disaster recovery consulting to address a company’s needs – including assessments, planning and design, implementation, testing and full business continuity management.

There are proactive services, such as Kyndryl IT Infrastructure Recovery Services to help businesses identify risks and ensure they are prepared to detect, react and recover from a disruption.

With the growth of cyber attacks, companies are moving from a traditional or manual recovery approach to an automated and software-defined resiliency approach. The  Kyndryl Data Protection Services  approach uses advanced technologies and best practices to help assess risks, prioritize and protect business-critical applications and data. These services can also help business rapidly recover IT during and after a cyber attack.

Other companies turn to cloud-based backup services, such as  Kyndryl Incident Recovery Services to provide continuous replication of critical applications, infrastructure, data and systems for rapid recovery after an IT outage. There are also virtual server options to protect critical servers in real-time. This enables rapid recovery of your applications at a Kyndryl Resiliency Center to keep businesses operational during periods of maintenance or unexpected downtime.

For a growing number of organizations, the answer is with resiliency orchestration, a cloud-based approach that uses disaster recovery automation and a suite of business continuity management tools designed specifically for hybrid-IT environments. For instance, Kyndryl Resiliency Orchestration helps protect business process dependencies across applications, data and infrastructure components. It increases the availability of business applications so that companies can access necessary high-level or in-depth intelligence regarding Recovery Point Objective (RPO) ,  Recovery Time Objective (RTO)  and the overall health of IT continuity from a centralized dashboard.

Key features of an effective business continuity plan (BCP)

The components of business continuity are:

The business continuity plan becomes a source reference at the time of a business continuity event or crisis and the blueprint for strategy and tactics to deal with the event or crisis.

The following figure illustrates a business continuity planning process used by Kyndryl Global Technology Services. It’s a closed loop that supports continuing iteration and improvement as the objective. There are three major sections to the planning process:

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The Importance of a Business Continuity Plan (Plus a Free Guide)

Creating a business continuity plan isn’t just a smart business strategy; it’s an essential component of ensuring survival during and after a crisis, emergency or disaster event. If your organization is looking to create (or update) its business continuity plan, look no further. This article covers the many benefits of having one. Plus, you’ll even find a downloadable, step-by-step guide for how to create one at the end.

What is a Business Continuity Plan?

A business continuity plan (BCP) is a process that outlines the potential impact of disaster situations to business operations. It creates policies that respond to various situations to ensure a business is able to recover quickly after a crisis. The main goal of a BCP is to protect people, property and assets. It also helps position your organization to recover from unexpected business interruptions, property damage, financial impact and even loss of life following an emergency.

Download 5 Steps to Building a Business Continuity Plan

Business Continuity Planning: Why You Should Care

There’s no denying that the beginning of 2020 has been incredibly difficult for many businesses. While some organizations have had to convert to a 100% remote approach to operations, others have have been forced to  shut their doors until further notice. The COVID-19 crisis was sudden and unexpected for many, and called for drastic measures that many businesses were not prepared for.

Much like in the coronavirus situation, many businesses do not recognize the need for a BCP until it’s too late. Here’s how having a BCP could save your business significant time, money and precious resources in the wake of an emergency or crisis.

5 Benefits of Having a Business Continuity Plan

1. your business will be more prepared to handle the unexpected..

Businesses can’t expect employees to know the best ways to react during a crisis situation. Leaving each person to respond in his or her own way will, at best, only add to the confusion and at worst, lead to loss of life. A BCP will help document procedures well in advance of an emergency. This way, employees can receive training to protect themselves and make smart decisions without panicking.

2. Your business will have safeguards in place (in addition to insurance).

A common misconception is that businesses do not need a business continuity plan if they have insurance. The truth is that a business can’t always rely on insurance alone. Insurance doesn’t always cover peripheral damage of an incident, such as loss of customers, loss of market share and operational setbacks. A BCP only helps bolster safety and security in your organization.

3. Your business will invest in itself and its ability to bounce back.

The time you spend developing and maintaining a business continuity plan is time that you spend investing in your company. It’s important to remember that your fixed costs will continue after an event, whether you’re open or not. The faster your organization can return to business as usual, the more likely you’ll be to fully recover from an unanticipated event.

4. Your business will have a plan to continue providing acceptable service after the disaster.

Threats, disruptions and disasters can lead to a loss in revenue and higher costs, which in turn can affect profitability. Don’t let an unanticipated event set your business back, especially when it comes to production of goods or services. A business continuity plan can help your organization keep operations running, retain customers and continue earning revenue.

5. Your business will better preserve its corporate reputation, image and revenue stream.

Companies that take the time to consider how they’ll respond to emergency situations are genuinely the ones who are able to bounce back and continue operations as usual. A predefined business continuity plan (when combined with proper insurance coverage) will help your organization eliminate the need to make hasty decisions under stressful conditions.

Here’s Your Free Guide to Creating a Business Continuity Plan

Business continuity planning is an expansive topic. With so many resources available on the internet, it can be difficult to know where to start. We made it easy with our step-by-step guide to business continuity planning. Inside, you’ll find resources including a BCP outline, a business impact questionnaire, and other helpful tools.

Meaghan Kelly

Meaghan Kelly

Former marketing content copywriter for AkitaBox.

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Why Is Business Continuity Important?

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Companies today face an unprecedented number of exposures. The frequency and severity of weather-related events seem to be increasing and reliance on a complex network of technology and supply chains is expanding. Both trends leave businesses susceptible to a variety of existing and emerging risks. Managing these risks by developing a business continuity strategy is key to the survival of any organization.

Why Business Continuity?

Business continuity planning is one of the most critical components of any recovery strategy. Unfortunately, not every company develops a continuity plan. Here are a few misconceptions and realities about business continuity planning.

Misconception #1: "Our people will know what to do in an emergency."

Even the best employees cannot be expected to know what to do when disaster strikes. Leaving each to respond in his or her own way only adds to the confusion of an event. Having a well-documented business continuity plan in advance, and training your employees to follow it, gets everyone on the same page — helping to ensure an organized, safe and timely recovery.

Misconception #2: "We have insurance to cover our losses."

Insurance alone is NOT a business continuity strategy. Proper coverage is a significant and important part of the plan. But it may not fully cover some of the peripheral damages from an event, like loss of customers, loss of market share, or setbacks in development or release of a new product. Consult with your insurance agent to understand what is and is not covered under your policy.

Misconception #3: "We do not have the time to develop a business continuity plan."

Time spent developing and maintaining a business continuity plan is an investment in your company. Your fixed costs will continue after an event, whether or not you are open for business. The faster you can return your operations to normal, the more likely you will recover from the event successfully. With so much at stake, your company cannot afford to NOT have a plan.

Misconception #4: "Business continuity and disaster recovery planning are the same."

Business continuity is a proactive plan to avoid and mitigate risks associated with a disruption of operations. It details steps to be taken before, during and after an event to maintain the financial viability of an organization.

Disaster recovery is a reactive plan for responding after an event. It deals with the safety and restoration of critical personnel, locations, and operational procedures after a disaster, and is a part of business continuity planning.

A Good Investment

From Hurricane Sandy and 9/11 to the tornadoes in Oklahoma, companies that proactively consider how to respond to events are the first to get back to business, often at the expense of competitors. A predefined business continuity plan combined with the proper insurance coverage, maximizes the chance of a successful recovery by eliminating hasty decision-making under stressful conditions. It details how to get businesses back on track after a disruption – in the most thoughtful way possible.

Think Your Business Can Withstand a Disaster? Think Again

Twenty-five percent of businesses do not reopen following a major event.¹ It does not take a major catastrophe to shut down a business. In fact, seemingly minor disruptions compared to widespread natural disasters can often cause significant damage — power failures, broken water pipes, or loss of computer data.

A Travelers study found that 48% of small businesses are operating without any type of business continuity plan, yet 95 percent indicated they felt they were prepared.

If you answered "Yes" to any of these questions, then your business continuity plan may be giving you a false sense of security.

Natural Disasters Becoming More Common — and Costly

In 2012, nine of the top 10 most expensive world-wide natural disasters happened in the United States. With $77 billion in insured losses worldwide, 2012 was the third costliest year on record. The first was 2011, when $126 billion in insured losses were reported.²

Business Continuity Planning for a Competitive Advantage

An alarming 48% of business owners surveyed by Travelers in 2012 said they have no plan in place. That means business continuity planning is more than smart business — it helps your company remain better positioned to recover from the business interruption, property damage, financial impact, and loss of life that a natural disaster or man-made event may cause.

Start Your Business Continuity Planning

Planning for a disruption or catastrophic event should happen when business is going well, not when disaster strikes. Having a pre-defined, well-documented business continuity plan that clearly communicates how your business will respond during an event can help mitigate risk — and is one of the best investments your company can make.

1 Source: Insurance Institute of Business & Home Safety; 2 Source: Insurance Journal;

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Business Continuity Plan

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Business Continuity Planning Process Diagram - Text Version

When business is disrupted, it can cost money. Lost revenues plus extra expenses means reduced profits. Insurance does not cover all costs and cannot replace customers that defect to the competition. A business continuity plan to continue business is essential. Development of a business continuity plan includes four steps:

Information technology (IT) includes many components such as networks, servers, desktop and laptop computers and wireless devices. The ability to run both office productivity and enterprise software is critical. Therefore, recovery strategies for information technology should be developed so technology can be restored in time to meet the needs of the business. Manual workarounds should be part of the IT plan so business can continue while computer systems are being restored.

Resources for Business Continuity Planning 

Business Continuity Impact Analysis

Business continuity impact analysis identifies the effects resulting from disruption of business functions and processes. It also uses information to make decisions about recovery priorities and strategies.

The Operational & Financial Impacts worksheet  can be used to capture this information as discussed in Business Impact Analysis . The worksheet should be completed by business function and process managers with sufficient knowledge of the business. Once all worksheets are completed, the worksheets can be tabulated to summarize:

Those functions or processes with the highest potential operational and financial impacts become priorities for restoration. The point in time when a function or process must be recovered, before unacceptable consequences could occur, is often referred to as the “Recovery Time Objective.”

Resource Required to Support Recovery Strategies

Recovery of a critical or time-sensitive process requires resources. The Business Continuity Resource Requirements worksheet should be completed by business function and process managers. Completed worksheets are used to determine the resource requirements for recovery strategies.

Following an incident that disrupts business operations, resources will be needed to carry out recovery strategies and to restore normal business operations. Resources can come from within the business or be provided by third parties. Resources include:

Since all resources cannot be replaced immediately following a loss, managers should estimate the resources that will be needed in the hours, days and weeks following an incident.

Conducting the Business Continuity Impact Analysis

The worksheets Operational and Financial Impacts  and Business Continuity Resource Requirements should be distributed to business process managers along with instructions about the process and how the information will be used. After all managers have completed their worksheets, information should be reviewed. Gaps or inconsistencies should be identified. Meetings with individual managers should be held to clarify information and obtain missing information.

After all worksheets have been completed and validated, the priorities for restoration of business processes should be identified. Primary and dependent resource requirements should also be identified. This information will be used to develop recovery strategies.

Recovery Strategies

If a facility is damaged, production machinery breaks down, a supplier fails to deliver or information technology is disrupted, business is impacted and the financial losses can begin to grow. Recovery strategies are alternate means to restore business operations to a minimum acceptable level following a business disruption and are prioritized by the recovery time objectives (RTO) developed during the business impact analysis .

Recovery strategies require resources including people, facilities, equipment, materials and information technology. An analysis of the resources required to execute recovery strategies should be conducted to identify gaps. For example, if a machine fails but other machines are readily available to make up lost production, then there is no resource gap. However, if all machines are lost due to a flood, and insufficient undamaged inventory is available to meet customer demand until production is restored, production might be made up by machines at another facility—whether owned or contracted.

Strategies may involve contracting with third parties, entering into partnership or reciprocal agreements or displacing other activities within the company. Staff with in-depth knowledge of business functions and processes are in the best position to determine what will work. Possible alternatives should be explored and presented to management for approval and to decide how much to spend.

Depending upon the size of the company and resources available, there may be many recovery strategies that can be explored.

Utilization of other owned or controlled facilities performing similar work is one option. Operations may be relocated to an alternate site - assuming both are not impacted by the same incident. This strategy also assumes that the surviving site has the resources and capacity to assume the work of the impacted site. Prioritization of production or service levels, providing additional staff and resources and other action would be needed if capacity at the second site is inadequate.

Telecommuting is a strategy employed when staff can work from home through remote connectivity. It can be used in combination with other strategies to reduce alternate site requirements. This strategy requires ensuring telecommuters have a suitable home work environment and are equipped with or have access to a computer with required applications and data, peripherals, and a secure broadband connection.

In an emergency, space at another facility can be put to use. Cafeterias, conference rooms and training rooms can be converted to office space or to other uses when needed. Equipping converted space with furnishings, equipment, power, connectivity and other resources would be required to meet the needs of workers.

Partnership or reciprocal agreements can be arranged with other businesses or organizations that can support each other in the event of a disaster. Assuming space is available, issues such as the capacity and connectivity of telecommunications and information technology, protection of privacy and intellectual property, the impacts to each other’s operation and allocating expenses must be addressed. Agreements should be negotiated in writing and documented in the business continuity plan. Periodic review of the agreement is needed to determine if there is a change in the ability of each party to support the other.

There are many vendors that support business continuity and information technology recovery strategies. External suppliers can provide a full business environment including office space and live data centers ready to be occupied. Other options include provision of technology equipped office trailers, replacement machinery and other equipment. The availability and cost of these options can be affected when a regional disaster results in competition for these resources.

There are multiple strategies for recovery of manufacturing operations. Many of these strategies include use of existing owned or leased facilities. Manufacturing strategies include:

There are many factors to consider in manufacturing recovery strategies:

Resources for Developing Recovery Strategies

Manual Workarounds

Telephones are ringing and customer service staff is busy talking with customers and keying orders into the computer system. The electronic order entry system checks available inventory, processes payments and routes orders to the distribution center for fulfillment. Suddenly the order entry system goes down. What should the customer service staff do now? If the staff is equipped with paper order forms, order processing can continue until the electronic system comes back up and no phone orders will be lost.

The order forms and procedures for using them are examples of “manual workarounds.” These workarounds are recovery strategies for use when information technology resources are not available.

Developing Manual Workarounds

Identify the steps in the automated process - creating a diagram of the process can help. Consider the following aspects of information and work flow:

Internal Interfaces (department, person, activity and resource requirements)

Create data collection forms to capture information and define processes for manual handling of the information collected. Establish control logs to document transactions and track their progress through the manual system.

Manual workarounds require manual labor, so you may need to reassign staff or bring in temporary assistance.

Last Updated: 05/26/2021

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