What is BCP?

Avoiding heavy losses as a result of business interruption is paramount in today’s economic climate, and whilst many companies have a basic Disaster Recovery (DR) plan, they do not invest in full Business Continuity Planning (BCP).

Most companies typically view DR as an event that severely disrupts the technical functions of a business such as major computer hardware failure, malfunctioning software due to a computer virus, or even human error resulting in irrecoverable loss of data. All these events are IT centric which DR is traditionally associated with. Naturally there is a place for DR in this form, and BCP incorporates it as one of many parts of the entire process. Unlike traditional DR, BCP is not purely IT related, but is an enterprise-wide consequence of a major event such as flood, fire, power cuts, earthquake, a pandemic outbreak, or even a terrorist attack.

BCP presents a more comprehensive approach to ensure the business can continue to operate in the face of such cataclysmic events.  However, not all events have to be on a momentous scale to have damaging affects on the business. Companies can suffer in the face of much smaller and frequent disruptions such as supply chain problems, internal staffing issues (illness, departures, maternity leave etc), and other challenges businesses face every day. The details of a Business Continuity Plan can vary greatly, depending on the size and scope of a company and the way it does business. Every business is different, whether by industry sector, size of enterprise, or company structure or reach, and therefore each will have their own individual critical areas of operation. For some organisations Supply Chain Logistics may be their critical focus, for others it may be IT and communications infrastructure, or man-power.

Phoenix BCP examines the business in every detail and identifies these critical areas of operation and plans how the business can continue to operate after a disruptive event. Key business functions are prioritised to provide the Disaster Management Unit (DMU) with a manual of clearly defined actions aimed at recovering specific business processes, to be executed quickly and efficiently by members of the DMU. Included in the plans are details of how employees will communicate, where they will go should remote locations be required, and how they will continue to do their jobs. All critical business processes included in the plans will be fully documented and aimed at non-specialised personnel.

A sound Business Continuity Plan enables your business to resume functionality, and recover quickly and with fewer losses in the event of any business interruption, than a company which disregards the need for such plans.   Good Business Continuity Planning that is implemented properly and executed successfully during a crisis will give the company good returns on investment and consequently BCP can be seen as a business enabler and offers a competitive advantage of high value.

Business Impact Analysis

Before the Business Continuity Plan itself can be created, it’s essential to consider and understand the impacts of an event and appreciate the underlying risks. Once a major event occurs, all efforts must be invested to return the primary business functions to a predetermined level during the business resumption phase, and to establish the time span to achieve these objectives.

The scope of this process does not stop at the company itself, but expands across the supply chain. All areas of impact must be taken into consideration; a business interruption may occur at a primary supplier, which potentially could have severe repercussions on the performance of the affected company. Once again, close examination is required to determine the impact and associated risks such a ‘remote’ event could have on business.

This process is fundamental in producing a sound and effective BCP, and requires substantial resources to achieve it.

Why do companies need BCP?

Every business faces major unknowns and minor interruptions; hence it is important to have plans in place which assure business continuity.

The events of September 11th 2001 were a powerful reminder to all companies that Business Continuity Planning should not be ignored or disregarded. According to studies, an effective BCP can reduce losses by 90% in the event of business interruption, and, 81% of CEOs indicated their company plans would not be able to cope with a catastrophic event.

There are many examples of companies suffering due to poor or non-existent BCP. In America following the 1993 World Trade Centre bombings, 150 companies went out of business out of 350 affected by the event. Whilst these statistics are daunting, incidents do not have to be on the scale of 9-11 to have a dramatic detrimental effect on a company. For instance, in the case of fires, 44% of businesses fail to re-open, and 33% did not survive beyond three years after the event.

There are endless examples of company failures following both major and minor business interruption events where there was inadequate or non-existent Business Continuity Planning in place. Not only does BCP benefit organisations in the event of a disruption, but it also provides a mechanism for employee succession.  New starters will be more productive in a shorter time period as all business procedures will be documented

In today’s economic climate, it’s imperative that organisations have a competitive edge as a minimum, but also the need to have BCP in place to cope with business interruptions and suffering heavy losses, and even complete failure, is an absolute necessity.

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