Business continuity or resiliency planning is the process of developing a system that checks the different ways to prevent a company from possible risks. Business continuity planning also helps a company identify ways to recover from the possible threats that can potentially damage business operations. Awell-planned model helps in safeguarding the personal assetsAssets refer to “all the available properties of every kind or possession of an insurance company that might be used More of the founders and directors in the event of any disaster and operation-threatening risk.
A BCP helps evaluate every essential aspect of a business that can potentially put the company’s operations at risk. The risks can be diverse including potentially damaging cases like- – natural disaster impacts, accidental impacts, cyber-attacks among others. In simple words, a business continuity plan is the review process that helps determine whether a business can sustain the potential risks and recover from it’s effects.
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Noteworthy components in the BCP
For determining the ability of your business to recover from a potential crisis, you have to identify the pivotal aspects of creating a strong BCP. From data threats to an accidental crisis, you cannot omit anything. Omitting any aspect during the planning stage can make you unprepared. The business continuity plan should be developed with help from field experts while considering the following before you institutionalise the plan –
- Recognise the risks and note how any of the potential risks could slow down the pace of your current operations.
- Setup a step wise execution framework to trigger at several points in the scale of risk faced to safeguard the assetsAssets refer to “all the available properties of every kind or possession of an insurance company that might be used More and mitigate any operational risks.
- Business consultants provide various tools and techniques both financial and otherwise which can help regulate operations at times when your company is hit.
- Business insurance is one of the best ways to mitigate your risks and get monetary containment for any losses that arise in the event of suit or calamity.
- It is pertinent that the model be reviewed every year to identify for any shortcomings as considerations will change with expansion of your business.
How has BCP changed over the years?
Since the early 1970s, business continuity plans have been an integral part of any financial and business model. That also means that over the years several ways of planning and aligning to a BCP have become popular. The world of business is changing every second and continues to be ever-evolving. Therefore, your plans of mitigation to sustain the risks to be faced also need to keep up with the times.
For instance, the significance of data and cyber security has emerged only after the digital boom. There was barely any thought given by companies to the importance of data and cyber information while developing the BCP model. Now, more organizations are completely dependent on IT and IT based systems. Data theft risks are real and are one of the primary considerations in business continuity plans. Cyber risk may be one of the examples of how businesses are evolving and though expansion and automation might be the future, it comes with pertinent elements of risk in the mix.
The importance of Business Continuity Plan
Every business must develop a continuity plan to recognize and analyze their organisation’s ability to withstand potential threats. Everything from monetary risks, infrastructural impact, personnel risk, cyber security risk and any other threat needs to be looked at and managed as part of the BCP.
For making the most of the continuity plans, companies are focusing on developing an all-inclusive model covering – data protection, operation continuity strategies, brand protection, customer retention, employee retention and many more. With such a holistic approach, businesses can decrease operating expenses in the long term in more than one way. Make your business strong and maximize the operability capacity with a well-planned continuity model that focuses on industry-specific threats and all other evolving business aspects.
Emergence of Insurance as a mitigation tool
Risk has existed since the existence of trade. Several businesses realised that they can insure their risks with an external party to wriggle out of probable situations that could cause significant damage to their business. An insurance helps a business mitigate the effect of monetary losses that may arise due to lawsuits from third parties, erroneous damage, calamities, asset loss, cyber theft, lawsuits against senior personnel among many others.
Several different insurance products that exist to cater to each of the risks faced by any business. These products can be customised to cover the associated risk to any single organisation. All continuity plans rely highly on these products to account for safety against major losses that can arise from potential events.
Experts at PlanCover have been consulting with small and large organisations to help them get the right business insurance packages to safegaurd against all potential risks. We have helped process claims for many of our customers over the years. Reach out to PlanCover today to get a complete risk assessment and guided insurance planning from our experts.
How to test your Business Continuity Plan?
As discussed, the evolving ways of business operations and the dynamicity of the business world makes it mandatory for every business to update their plan. But, how can you review the plan? There are different ways to check how effective is your business continuity plan is, some of the most-commonly adopted methods are –
- BCP audit: Auditing the business continuity plan is effective for all businesses, irrespective of the industrial domain. Besides the BCP team and developers, all the department heads and C-level management team take part in the audit. They thoroughly review the BCP and determine if any aspect is missing out or needs revision. The different reviewed aspects in this testing method are – contact information, disaster recovery scenarios, the validity of the recovery contacts, coverage schemes for disaster recovery and business continuity, etc.
- Tabletop testing: A tabletop testing exercise for reviewing the business continuity plan for your organization is scenario-based. In simple words, the testing is conducted through role-playing and testing the different scenarios that can arise. Unlike the BCP audit, here, all employees can participate. It helps the evaluators to understand how the employees can respond to the immediate crisis and yet try their level best to carry out the roles and responsibilities assigned to them. It can be an emergency drill exercise or any other testing scenario that can impact the operations.
- Simulation testing: A walk-through or simulation testing involves re-enacting the real recovery actions present in the business continuity plan. It is a hands-on process and takes place on-site. Through the testing procedure, the employees physically demonstrate the steps incorporated in the BCP. It can include making phone calls to recovery contacts, driving to a backup location or reaching the server rooms in the organization. It helps in ensuring that each employee is aware of the safety practices. Also, it is an excellent way to test the leadership response to sudden threats and recovery protocols.
Understanding the BCP testing frequency – Factors that play a role
It is vital to review the BCP and recovery action steps to ensure the effectiveness of the plan. Regular testing of the adapted business continuity plan is highly recommended for all organizations. Why? Because the nature of the risks can evolve and thus you have to check your preparedness to withstand them. In fact, there may be new regulatory obligations attached to the business operations when you expand your small business into a large enterprise.
Update the contact details that are crucial in accidental scenarios and keep accurate information of every business aspect to avoid legal complications. And most importantly, keep your CRM system and cyber information safe with the latest safety tech.
Final note – Design a schedule that meets the needs
It is difficult to plan and schedule for BCP testing every year because all components and resources of a business are involved (such as Employees, Clients, Operational upgrades, Geographical expansion). However, a small enterprise should schedule testing at least once a year. Small businesses are at a greater risk during their initial stages and therefore are more prone to risks.
