advantages of having a business continuity plan in an organization

Business Continuity Planning: Ensuring the Resilience of Your Organization

Let’s explore the intricacies of business continuity planning, from understanding its importance to implementing a robust strategy that safeguards your enterprise.

Published by Orgvue   November 20, 2023

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In an unpredictable world, the ability to sustain your business’s essential functions and operations, even in the face of disruptions, is paramount.

Business continuity planning is the framework that ensures your organization can weather storms, both literal and metaphorical.

What is Business Continuity Planning?

At its core, business continuity planning is the process of developing a proactive strategy to ensure an organization’s critical functions and operations can continue in the face of unforeseen disruptions.

It encompasses a range of activities, from risk assessment to the creation of detailed recovery plans, with the ultimate goal of minimizing downtime and ensuring the organization’s resilience.

The Importance of Business Continuity Planning

The importance of being prepared for various external and internal factors cannot be overstated. While many businesses have a standard business plan, not all of them consider the potential disruptions caused by natural calamities, economic downturns, or other unexpected events. Business continuity planning is the key to ensuring a company’s sustained operation, regardless of the challenges it may face.

Business continuity planning goes beyond the traditional business plan. While a business plan outlines goals and strategies for growth, a continuity plan focuses on how the organization will continue to function in the face of adversity. It involves identifying potential risks and developing strategies to mitigate and recover from them. Whether it’s a natural disaster, a cyberattack or an economic recession, having a well-thought-out strategic plan is essential for business survival.

One of the most significant threats to businesses is an economic downturn, such as a recession. During these challenging times, consumer spending often decreases, and businesses may face financial instability. A recession can have a ripple effect on companies of all sizes, causing decreased revenue, layoffs, and even closures.

For a detailed look at the impact of recessions on businesses, read how to prepare for a recession , which delves into strategies for navigating these challenging economic conditions.

Business strategy planning is not just about surviving during tough times; it’s also crucial for capitalizing on periods of growth. When businesses experience an upturn, they often need to scale rapidly to meet increased demand. Having a continuity plan in place allows for a smoother transition during periods of growth, ensuring that the infrastructure, resources and workforce can adapt effectively.

The financial consequences of not having a business continuity plan can be devastating. Without a plan in place, businesses are more vulnerable to unexpected disruptions, which can result in significant financial losses. These losses may come from increased downtime, lost revenue, legal liabilities, reputational damage and the costs associated with recovery efforts.

Considerations for Business Continuity Planning

Creating a robust business continuity plan is a complex task that involves a multitude of factors. Among these considerations, three key aspects stand out: cultural differences, limited resources and alignment with business objectives. A successful business strategy plan takes these factors into account to ensure that an organization can effectively respond to disruptions while maintaining its core values and strategic direction.

1. Cultural Differences

Cultural diversity is a significant consideration in business strategy planning, especially for multinational companies or organizations with a diverse workforce. Cultural differences can influence how employees perceive and respond to crises. When developing a business continuity plan, it is important to consider the following aspects:

• Communication Styles : Different cultures have varying communication norms and hierarchies. Understanding how employees from various cultural backgrounds communicate during a crisis can help in crafting effective crisis communication strategies.
• Decision-Making Processes : Some cultures prioritize consensus-driven decision-making, while others lean towards hierarchical authority. A business continuity plan should acknowledge these differences and provide flexibility in decision-making approaches during disruptions.
• Crisis Response Expectations : Cultural expectations can shape how employees expect the organization to respond to a crisis. Your business strategy plan should be sensitive to these expectations and ensure that response strategies align with cultural norms.

2. Limited Resources

For many businesses, resource constraints are a reality. When developing a business continuity plan, it’s crucial to consider the organization’s resource limitations, such as budget, personnel and technology. Here are some key considerations:

• Resource Allocation : Prioritize critical functions and allocate resources accordingly. Not all business processes are equally important, and a business continuity plan should identify and protect the most essential ones first.
• Efficiency and Scalability : Develop strategies that focus on efficiency and scalability. Efficient resource use is critical, and a business strategy plan should outline how to adapt to changing resource constraints during a crisis.
• Collaboration : Collaboration with external partners, such as suppliers, can be a resource-saving strategy. Establishing relationships with partners who can provide support during disruptions is a valuable aspect.

3. Business Objectives

A business continuity plan should align with the broader business objectives to ensure that it doesn’t hinder growth or innovation. Consider the following aspects:

• Market Expansion:  If the organization’s objective is to expand into new markets, the business strategy plan should accommodate this goal. It should address the challenges and opportunities that come with market expansion, including regulatory compliance and logistical considerations.
• Relocation or Migration : If there are plans to relocate or migrate operations, the business continuity plan should include strategies for a seamless transition. This may involve considerations such as data migration, employee relocation and continuity of customer service.
• Competitive Landscape : Changes in the competitive landscape, such as the emergence of new competitors, can impact the organization’s continuity. The business strategy plan should be flexible enough to adapt to shifts in the competitive environment.
• The COVID-19 pandemic forced companies to adapt rapidly, with remote work becoming the norm for many, reshaping entire industries like healthcare and e-commerce.
• The global recession of 2008 had long-lasting effects on financial institutions and prompted regulatory changes that influenced business operations.
• The rise of the internet transformed countless businesses, from retail to media, and required adaptation to online platforms.
• Looking ahead, emerging technologies like artificial intelligence have the potential to disrupt industries in unprecedented ways, with automation and data-driven decision-making reshaping the future of work. These events emphasize the critical importance of adaptable and comprehensive business continuity planning to navigate the unpredictable landscape of our ever-evolving world.

Developing a Strategic Business Plan

A well structured business plan serves as a roadmap for your organization, guiding actions and decisions while enabling effective response to a dynamic business environment.

• Conduct a comprehensive assessment of the current state of the business.
• Review financial statements, market positioning and operational performance.
• Identify strengths, weaknesses, opportunities and threats.
• Evaluate the company’s internal resources and capabilities.
• Analyze micro-environment factors such as competitors, customers, suppliers and regulatory changes.
• Examine macro-environment factors like economic trends, technological advancements and political factors.
• Use tools like PESTEL analysis and Porter’s Five Forces to assess the external business environment.
• Clearly define short-term and long-term business objectives.
• Make objectives specific, measurable, achievable, relevant and time-bound (SMART).
• Align objectives with the company’s mission and vision.
• Identify key operational processes that drive business success.
• Evaluate the efficiency and effectiveness of these processes.
• Prioritize improvements in critical areas to align with strategic objectives.
• Plan for potential risks and uncertainties that could impact the business.
• Create contingency and crisis management strategies.
• Establish a risk management framework to mitigate and respond to unforeseen events.
• Implement key performance indicators (KPIs) to track progress.
• Regularly review and revise the business plan based on changing market conditions.
• Adapt to emerging opportunities and challenges.
• Ensure that the strategic plan is communicated effectively throughout the organization.
• Secure buy-in and commitment from employees at all levels.
• Ensure that all team members understand their roles in achieving the plan’s objectives.
• Allocate resources, including finances and manpower, in alignment with the strategic priorities.
• Develop a budget that reflects the financial requirements of the plan.
• Monitor spending and adjust budgets as needed.
• Develop a timeline and action plan for the execution of the strategic initiatives.
• Assign responsibilities to specific teams or individuals.
• Regularly review progress and make adjustments to stay on track.
• Periodically evaluate the effectiveness of the strategic plan.
• Solicit feedback from employees, customers and stakeholders.
• Use feedback to make continuous improvements and refine the plan.
• Establish a system for measuring and reporting progress.
• Create dashboards or reports to communicate key metrics to stakeholders.
• Ensure that performance data aligns with the defined objectives.
• Incorporate sustainability and responsible growth practices into the plan.
• Address social and environmental impacts as part of corporate responsibility.
• Seek opportunities for sustainable growth and innovation.
• Develop scenarios that explore alternative future situations.
• Consider various outcomes and their implications on the business.
• Prepare for different scenarios to enhance adaptability.
• Leverage technology for data analytics, automation, and efficiency.
• Stay updated on emerging technologies that can support the strategic plan.
• Integrate technology solutions to enhance business processes.

Implementing a Business Continuity Plan

 Importance of Training and Awareness:

• Awareness:  Create awareness about the business continuity plan across the organization to foster a culture of preparedness. This includes educating employees on the potential risks and the importance of the plan.

 Consistent Review of the Plan:

• Conduct post-incident reviews to assess the BCP’s performance after a real event and make necessary adjustments.

 Address Cultural and Technological Issues:

• Technological Challenges: Recognize and mitigate technological hurdles that can hinder the plan’s execution, such as infrastructure limitations or cybersecurity threats. Ensure that IT systems are resilient and can support the plan.

 Software Integration:

• Organizational design software like Orgvue can assist in visualizing and optimizing the organizational structure, enabling efficient allocation of resources and responsibilities during a disruption.

Business continuity planning is not merely a precaution but a strategic imperative for any organization. It provides a structured approach to safeguarding business operations in the face of unforeseen disruptions, thereby minimizing downtime and potential financial losses.

By fostering a culture of preparedness, training employees, regularly reviewing and adapting the plan, addressing cultural and technological issues, and leveraging software solutions like Orgvue for organizational design, businesses can ensure their resilience and adaptability in an ever-changing landscape.

For businesses with specific 1-5 year plans, the integration of business strategy planning is paramount. It aligns seamlessly with forward-looking strategies by fortifying the organization’s ability to execute those plans in the face of unexpected events.

By weaving business continuity considerations into your strategic framework, you not only protect your investments but also demonstrate your commitment to long-term success, customer trust and stakeholder confidence. The benefits of such foresight extend far beyond mitigating risk; they empower your business to thrive in an increasingly unpredictable world. Therefore, it is recommended that businesses of all sizes prioritize and integrate business continuity planning as an integral part of their strategic vision and ongoing operations.

Business Continuity Plan FAQs

● where does business continuity planning belong in an organization.

Depending on the organization’s culture, the department your business continuity plan falls under varies. IT is usually one of the most vital components of any business strategy plan, in which case it could belong under the IT department. Or, if financial impacts are your organization’s main concern, the finance department may need to run the plan.

● Who Is Responsible For the Business Continuity Plan?

The business continuity plan usually falls under the responsibility of a dedicated role or department, often led by a Business Continuity Manager, who reports to senior leadership. This individual or team is responsible for creating, implementing, and regularly updating the plan to ensure the organization’s resilience in the face of disruptions.

● Is Business Continuity Planning a Legal Requirement?

It is not always a legal requirement, but certain industries and jurisdictions may have regulations or standards that mandate organizations to have such plans in place to ensure operational resilience and preparedness for emergencies.

● What Role Can Business Continuity Planning Play In Recovering From an Incident?

It plays a crucial role in helping organizations recover from incidents by providing a structured framework to assess, respond to and mitigate the impact of disruptions, minimizing downtime and financial losses. It outlines clear procedures and responsibilities, ensuring that essential operations can resume swiftly and efficiently, thus safeguarding the organization’s reputation and maintaining stakeholder trust.

● When Should a Business Continuity Plan Be Activated?

A business continuity plan should be activated as a preventative measure in the event a disruptive incident occurs. Triggers may include natural disasters, cyberattacks, supply chain disruptions or any event that threatens the continuity of critical business functions.

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5 reasons for business continuity plan: importance and purpose

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

Read time: 6 minutes

...updated 3/14/2024...

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:

The purpose of 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.

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.

Learn more about Business continuity and disaster recovery solutions and services

5 reasons your organization needs a business continuity plan

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.

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.

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.

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.

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.

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.

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.

Our 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.

Frequently asked questions.

A business continuity plan is crucial for ensuring an organization's resilience during unexpected disruptions, such as natural disasters, cyberattacks, or economic downturns. It helps maintain essential functions and minimizes downtime.

A business continuity plan typically includes risk assessments, recovery strategies, communication plans, and testing. These components help businesses prepare for and respond to emergencies effectively, minimizing the impact on operations.

To assess your needs, identify critical functions, potential risks, and the resources required for recovery. A tailored plan should address your organization's unique vulnerabilities and objectives.

While a business continuity plan can significantly improve an organization's chances of survival, it does not guarantee it. Common challenges include resource constraints, resistance to change, and the need for regular updates to stay effective.

A business continuity plan should be reviewed at least annually or after significant changes to business operations, technology, or personnel. External events, such as major industry shifts, emerging threats, or regulatory updates, can also trigger revisions to ensure the plan remains relevant and effective.

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The importance of having a business continuity plan

When the world is chugging along as normal and business operations only have the usual risks to monitor, it can be easy to put aside business continuity planning. But, as we've all discovered in recent weeks, anything can happen at any time, and businesses must be ready to pivot operations quickly, efficiently and safely as and when needed. The quick global spread of COVID-19, colloquially known as coronavirus, has thrown the world into disarray. The markets are in a nosedive, governments are shutting down entire countries and most organizations are having to quickly embrace remote working to keep the lights on and keep clients serviced. Those who do not have the capability to support workers at home ' and that are not essential services such as healthcare or sanitation ' are currently going through a trial by fire, with operations stymied and revenue under threat. Businesses are rushing to set up work-from-home arrangements, or take out subscriptions for online meetings and cloud collaboration technology. Priorities are shifting dramatically as we enter uncharted territory. This lack of preparedness could well see many businesses going under ' but if those organizations had created a robust business continuity plan ahead of time, they would know exactly how to handle such a crisis and weather the storm.

What is a business continuity plan and why do you need one?

A business continuity plan, or BCP, refers to the process a company will take to prevent and recover from potential threats to the organization. It ensures personnel and assets are protected and able to function in the event of a disaster, and is generally part of overall risk management ' that is, best practice dictates that you consider your business continuity plan ahead of time, not when a crisis hits. Your business continuity plan considers what those risks may look like ' both physical threats such as fire or flood, and those threats that are harder to pin down, such as hacks and pandemics ' and then determines:

• How those risks will impact operations
• How you'll implement safeguards, procedures and policies to mitigate the risks
• How you'll test procedures to ensure that they work
• How you'll review the process to keep it up-to-date

It includes a summary of the most critical business processes and functions ' those aspects that, if they failed, your business would be unable to operate ' as well as internal and external communication strategies, clear instructions for accessing and restoring offsite recovery data, any potential temporary offices or locations, and a change log that summarizes any updates to the plan for version-control purposes. Without a business continuity plan, you risk your company and its people . Not only could the business fail, but you could also suffer financial loss, a tarnished reputation and lost productivity. A physical disaster could also impact your employees, potentially causing injury or death.

Ensure continued — and secure — access to systems

With COVID-19 playing havoc with how companies go about their day-to-day activities, the priority for organizations should be on building business resilience. This means being flexible enough to go with the flow while maintaining operations at as normal a level as possible, all while ensuring your employees can access the systems and processes they need to do their jobs. It also means keeping a close eye on matters of cybersecurity. Those companies that maintain on-premises systems have suddenly found themselves in a pickle, as workers are unable to come into the office with cities on lockdown. The question of how teams will access platforms is an essential part of business continuity planning, and something that smart risk managers had covered long before the pandemic hit. They had thought about how teams would access platforms, assessed what bandwidth they had available for that level of remote access, and had considered whether they needed a temporary increase in network capacity or licenses. The security question, though, doesn't just extend to moving to cloud-based operations; hackers and cyber threats will use any crisis to their advantage. Keep an eye out for phishing scams, DDoS attacks and malware being introduced by employees keen to learn the latest developments in the crisis and not closely examining the links they click on. Security postures should include a review of systems you have in place to stop phishing campaigns and other inbound threat vectors before they hit employees' inboxes, writes Jason Albuquerque for InformationWeek .

Creating a business continuity plan

While every organization's business continuity plan will be different, there are some common steps that companies should follow to develop a solid continuity plan. They include:

• Undertaking a business impact analysis to identify functions and related resources that are time-sensitive
• Identifying and implementing steps to recover critical business functions
• Creating a continuity team that will be tasked with devising a plan to manage the disruption
• Training and testing the continuity team, and ensuring they regularly go over the plan and strategies to mitigate risk and ensure they are kept up-to-date

By considering these things in advance, organizations can help to ensure business continuity when things get tough, protecting the business, its reputation, its people and its customers.

The importance of technology to business continuity for legal operations

Of course, the march toward cloud-based technology to run essential business systems and processes makes business continuity planning a little easier. Once upon a time, you had to be in the office and on the network to access things like entity management software; today, there is a plethora of cloud-based options for all aspects of legal operations, compliance, governance and risk management work. Best-in-class providers of these systems are supporting their clients through the current COVID-19/coronavirus crisis, helping them to make sense of the craziness by providing online support, guidance and tech triage. More than just a software provider, these organizations become an essential partner in times of crisis. Diligent is one such company, acting as a partner to more than half of the Fortune 1000. Through its cloud-based legal technology platforms, Diligent enables proactive governance to help mitigate the risks of modern business. We believe every business should have the necessary business continuity planning and management strategies, plans and procedures in place, fully tested at regular intervals, to drive the assurance that when disaster strikes, they'll be ready. The cost and impact of not being prepared is usually far greater than that of being proactive. Diligent works to enable business continuity planning by ensuring ongoing access to essential documents, contracts and entity data through:

• Diligent Entities , which helps organizations to centralize, manage and effectively structure their corporate record to improve entity governance and improve decision-making
• Diligent Boards , which empowers boards and executives with the tools, insights and analytics to securely access board materials, track company performance and gather real-time information
• Diligent Assurance , which helps organizations to confidently create, manage and report on the obligations relevant to their business, and always be audit-ready.

Get in touch and request a demo to see how Diligent's suite of cloud-based governance and compliance software can help drive your business continuity planning and ensure your organization can continue to operate, no matter what gets thrown your way.

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Business Continuity Simplified

By Andy Marker | December 17, 2018 (updated October 24, 2021)

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Unexpected work interruptions can cripple a business and cause millions of dollars in expenses and lost business. Learn about the importance of business continuity planning and management from experts. 

In this article, you’ll learn the definition of a business continuity plan and the primary goal of business continuity planning . Additionally, you’ll learn the steps involved in business continuity planning and about the business continuity lifecycle .

What Is Business Continuity Management?

In business continuity management (BCM) , a company identifies potential threats to its activities and the threat impact. The company then develops plans to respond to those threats and continue activities through any crisis.

What Is a Business Continuity Plan?

A business continuity plan (BCP) describes how a business will continue to run during and after a crisis event. The BCP details guidelines, procedures, and work instructions to aid continuity.

To learn more about writing a plan, see our how-to guide to writing a business continuity plan .

What Is Business Continuity Planning?

Business continuity planning (BCP) refers to the work a company does to create a plan and system to deal with risks. Thorough planning seeks to prevent problems and ensure business processes continue during and after a crisis.

Business continuity planning ensures that the company deals with disruptions quickly, and minimizes the impact on operations. Business continuity planning is also called business resumption planning and continuous service delivery assurance (CSDA) .

What Is the Primary Goal of Business Continuity Planning?

The main goal of business continuity planning is to support key company activities during a crisis. Planning ensures a company can run with limited resources or restricted access to buildings. Continuity planning also aims to minimize revenue or reputation losses.   

A business continuity plan should outline several key things that an organization needs to do to prepare for potential disruptions to its activities, including the following:

• Recognize potential threats to a company.
• Assess potential impacts on the company’s daily activities.
• Provide a way to reduce these potential problems, and establish a structure that allows key company functions to continue throughout and after the event.
• Identify the resources the organization needs to continue operating, such as staffing, equipment, and alternative locations.

Business Continuity Planning Steps

A business continuity plan includes guidelines and procedures to guide a business through disruption. The efforts to create a plan are the same for large or small organizations. A simple plan is better than no plan. 

The basic steps for writing a business continuity plan are as follows:

• Create a governance team.
• Complete your business impact analysis (BIA) and risk assessment documents.
• Document your plan. Remember to include detailed guidelines and procedures that cover key processes and facilities.
• Test and update the plan regularly.

The Business Continuity Management Lifecycle

Business continuity management includes preparing for and handling unexpected events. BCM has a six-step lifecycle. This cycle repeats during both in regular business times and crises, as you take the right steps to keep activities always running.

The BCM lifecycle includes the following points:

• Mitigate Risk: Proactively identify business continuity risks to your company, and plan how your company will respond.
• Prepare: Train staff on your business continuity plan and ensure they understand what they need to do to help the business respond.
• Respond: Ensure that your company and all employees respond appropriately to a crisis. Be prepared to adapt in the moment.
• Resolve: Ensure that the company plans how to communicate effectively with staff and that it does so appropriately during the crisis.
• Recover: Inform employees, customers, and other important people about the status of the crisis and your company’s response.
• Resume: Communicate with employees and others after the crisis ends.

What Are Business Continuity Risks or Events?

Also called business continuity events, business continuity risks are the most common events that can disrupt a company’s regular operations — these can be natural and human-made crises. Defining these risks is a vital part of business continuity planning.

Such events might include the following:

• Severe weather
• Natural disasters (tornadoes, floods, blizzards, earthquakes, fire, etc.)
• A physical security threat
• A recall of a company’s product
• Supply chain problems
• Threats to staffing and employee safety
• Accidents at an organization’s facilities
• Destruction to a company’s facilities or property
• Power disruptions
• Server crashes
• Failures in public and private services (communications, transportation, safety, etc.)
• Environmental disasters, including hazardous materials spills
• Network disruptions
• Human error/human-made hazards
• Stock market crashes
• Cyber attacks and hacker activity

Any of these triggers can result in broader problems for a company, such as danger or injury to staff and others, equipment damages, brand injury, and loss of income and net worth. Business continuity management and planning address and mitigate these contingencies.

What Is a Business Continuity Strategy?

A business continuity strategy is more often called a business continuity plan. The strategy includes the processes and structure a company uses to manage an unexpected event.

Some people consider business continuity strategy to be a step in the planning process. In the strategy phase, business continuity planners describe the overall approach a company should take to prevent, manage, and recover from a crisis.

An Overview of Business Continuity Management and Planning

There are several goals, key elements, and benefits to business continuity management and planning. The primary goals of management and planning are as follows:

• Build Company Resiliency: Doing so means that your company’s tools, buildings, and operations are resistant to — and not greatly affected by — most disruptions.
• Create a Plan for Recovery (with Contingencies that Aid in That Recovery): If a major event does cause problems, you should have a plan for how to recover quickly. That plan will include contingencies. For example, you should plan for how key operations will resume if there is a widespread power outage.

Business continuity management and planning generally cover the following areas, with differences depending on the organization and industry:

• Disaster Recovery: Disaster recovery involves recovering technology after a disruptive event. You can learn more about disaster recovery and download free templates in our comprehensive article .
• Emergency Management: Emergency management focuses on avoiding and mitigating catastrophic risks to staff and communities.
• Business Recovery: Considered part of business continuity, business recovery centers on short-term activities after a disruptive incident. The short-term is sometimes defined as less than 60 days.
• Business Resumption: This describes the longterm phase of recovery (60 or more days after an even), wherein the company returns to near-normal conditions.
• Crisis Management: Crisis management focuses on communicating with stakeholders during and after a crisis, and controlling damage during the event. To learn more, read our comprehensive guide to crisis management .
• Incident Management: Incident management is an ITIL (previously known as Information Technology Infrastructure Library) framework for reducing or eliminating downtime after an incident.
• Contingency Planning: This covers outlier risks that are unlikely to occur but which could have disastrous results.

“A well managed business continuity management program will help protect people, assets, and business processes,” says Scott Owens, founder and managing director of BluTinuity , a business continuity firm based in New Berlin, Wisconsin. “It may not be able to prevent all incidents. But it can reduce the likelihood of incidents, decrease response time, and lower the cost and impact of an incident.”

Key Elements of Business Continuity Management

All business continuity management programs should include a number of key elements, which serve to ensure that your plan is positioned for success and that you regularly update and improve it.   

These important elements include the following:

• Governance: This is the structure and team your business sets up to create and monitor the program.
• Business Alignment: This section details how your company’s current business continuity management and planning processes compare to expert approaches and industry standards.
• Continuity Strategy and Recovery Strategies: Include a detailed plan that assesses risks to your organization and how you can recover, should those risks become reality.
• Plan Documentation: Provide details on the plan that everyone in your company can access. To get started, see our roundup of free business continuity plan templates .
• Tactical Implementation: This section includes details on the specific ways your company plans to recover from certain types of incidents.
• Training: In this section, detail how you will train your staff to understand the business continuity plan and their role in it.
• Testing: Include real-world simulations of a crisis event, and test how your company and its employees respond and the effectiveness of your business continuity plans.
• Maintenance: Make changes to the plan where necessary to increase its effectiveness.
• Monitoring: This section details how you will continue to compare industry standards and expert advice to how your plan is working.

To learn about formal requirements for business continuity planning and management, see our comprehensive article on the ISO 22301 standard . 

The Costs of Business Continuity Management

The costs to do an appropriate job of business continuity management can be significant. However, some reports say that the cost of unforeseen downtime may be as much as $2.5 billion a year for Fortune 1000 companies.

Kurt Engemann, Ph.D., is Director of the Center for Business Continuity and Risk Management at Iona College in New York, Editor-in-Chief of the International Journal of Business Continuity and Risk Management and author of Business Continuity and Risk Management: Essentials of Organizational Resilience . In the book, he says that costs for business continuity preparation do not only include the groundwork to assess a company’s risks and plans to manage those risks. Rather, they also cover the needed backup facilities and equipment and company assets for emergency response. In addition, costs must cover resources for training employees and testing the plan.

Some experts have estimated that business continuity management and planning within only the crucial information technology aspects of companies can cost two to four percent of the information technology budget. But the costs are necessary, and worth it in the long run, according to business continuity experts.

“There is an initial outlay of a modest amount of money that will lessen the financial impact of a possible future crisis,” Engemann writes in his book. “Similar to an insurance policy, the financial benefit of BCM must be viewed from a long-term prospective.”

When an organization’s top executives complain about the costs, Owens says, “Ask them what it would cost their organization for an hour of downtime. Or eight hours. Or 24 hours. Chances are the cost — financial, operational, and to brand and reputation — of having key business functions unavailable for an extended period are significant. They will most likely find business continuity management to be worth the investment.” 

Benefits of Business Continuity Management

Like Engemann, Owens points out that there are significant benefits to the investment organizations make in business continuity management, including the following:

• Mission Critical Processes: If you understand your key processes, you can plan to protect them and prioritize their recovery.
• Legal and Regulatory Compliance: Laws or regulations require companies in some industries to implement a formal business continuity management system.
• Satisfying Demands from Other Organizations: Some groups and companies may require that your company sets up BCM before they do business with you.
• Insurance Payments: To get the maximum payments from an insurance policy after an event, a company must have suitable business continuity management policies in place.
• Reputation Management: Your business’s brand will be greatly helped or hurt, depending on how an unforeseen event affects its operations.
• Competitive Advantage: A strong business continuity plan can offer your company the advantage over peers who are not as well prepared.
• Seamless Recovery: Cloud-based technologies make data backup, remote work, and business recovery affordable and accessible. Groups and businesses of all sizes can benefit from such tools. See our article on cloud computing for business continuity to learn more.
• Time Savings: Planning prevents teams from scrambling at the last minute to cobble together a recovery effort. Strong planning helps you get back online — and back on track — faster.

Michael Herrera, CEO of MHA Consulting , a business continuity and disaster recovery firm, cites two other significant benefits: 

• Keeping Customers and Avoiding Major Financial Losses: Getting operations back to normal quickly after an event means your company loses less money.

“Your customers aren’t as patient as you think they are,” Herrera explains. “They expect you to have a business continuity system and they expect you to be up and running. Their patience does run out.”

• Improving Day-to-Day Operations: Herrera says his firm’s clients often discover how business continuity planning gives them insights into the day-to-day operations of their company. “It really can help you with process improvement and getting a good understanding of what your business does every day.”

Additionally, strong business continuity planning will enable you to do the following:

• Officially declare a disaster and alert senior management.
• Assist in the development of an official public statement regarding a disaster and its effects on a business.
• Monitor your business’s progress and present the recovery status.
• Provide ongoing support and guidance to teams with pre-planned operations.
• Review critical processing, schedules, and backlogs to keep everyone up to date on status.
• Ensure businesses have both the resources and the information to deal with an unforeseen emergency.
• Reduce the risk that an emergency might pose to employees, clients, and vendors, etc.
• Provide a response for both man-made and environmental disasters.
• Improve overall business communication and response plans.
• Summarize both the operational and the financial impacts resulting from the loss of critical business functions.
• Allow businesses to plan for a loss of function that has potentially larger, more severe consequences.

See our article on the importance and benefits of business continuity planning to read more expert examples of how business continuity can bolster your company. 

Key Business Continuity Management and Planning Considerations

Companies don’t have to face business continuity planning alone. There are a variety of tools and services that can help, including the following:

Consultant Services

There are hundreds, if not thousands, of consultants and companies that can provide help with developing your business continuity plan. Below are a few things to think about in choosing one:

• How experienced are they? How long have they been around?
• What’s their reputation as a company? What do their clients say about them?
• Are they focused on a specific industry or area of business continuity, or do they have experience with a range of industries and a broad spectrum of business continuity?
• How do they think about business continuity (as a somewhat separate practice or something that needs to be ingrained within your organization)?
• How aligned is their advice with standards in your industry?

Business Continuity Software

There are also hundreds of pieces of business continuity software on the market. Here are some things to consider:

• Are you looking for software that will automate the development of plan components, or software that offers more in-depth help during the planning phase?
• What is the history of the software and the company behind it? How long has this particular software been on the market and what is the history and the reputation of the company behind it?
• Is the software being continually updated and improved?

Below are some specifics to consider as you test drive the software:

• Does it have an easy-to-use interface?
• Does it cover all aspects and components of business continuity, including business impact analysis and risk assessment ?
• Does it include sufficient storage for your company’s supporting documents?
• Does it provide secure portable access via mobile or other technologies, if a crisis interrupts your information technology systems?
• Does it provide strong data analytics?
• Is it secure and private?

Primary Things Your Organization’s Business Continuity Management System Should Accomplish

While your business continuity management system will have various elements and details, there are some primary things it should do for your organization. They correspond to the key elements listed earlier in this article. 

For example, a BCM system should help do the following: 

• Understand your company’s needs for business continuity and disaster preparedness. A BCM system should be able to assist company leaders in understanding the need for a business continuity management policy.
• Understand which processes should be recovered and in what order.
• Establish business continuity metrics to gauge success.
• Plan for communicating with customers, staff, and other stakeholders.
• Determine what tools, technology, and staffing are required to restore activities and support customers.
• Establish remote-work support or relocation plans for staff and activities.
• Implement ways to continually assess and manage continuity risks.
• Monitor and review how its business continuity management system is working.
• Continually improve the system.
• Respond effectively in a real-world crisis, and allow the business’s critical operations to continue and all operations to resume quickly.

Although nobody wants to think about disasters or the effort needed to prepare to meet and mitigate crises, the alternative is the potential loss of reputation, income, or the entire business. In sum, planning translates to determining your key processes, equipment, and tools, and applying basic recovery strategies. 

The Importance of Senior Organizational Leaders Strongly Supporting Your Business Continuity Management and Planning

Your senior leaders must strongly support your company’s business continuity management plan for it to succeed. Such leadership is key as storms, floods, pandemics, and data breaches increase in force and frequency.

“Make sure senior management is committed to the planning, development, execution, and implementation of a business continuity/disaster recovery program,” says Paul Kirvan , a business continuity consultant and a fellow of the Business Continuity Institute with 25 years of experience in business continuity work. “Otherwise, it simply won’t happen. Such programs work best if they have top-down support and funding, as opposed to being developed from the ground up.”

Business Continuity Plan Test Types

Testing verifies the effectiveness of your plan and provides training for participants. To ensure better communication, include suppliers, vendors, and other stakeholders in exercises. If appropriate, also consider including local emergency preparedness officials.  

There are four types of testing, and each requires increasing levels of planning, resources, and focus. You should try to run each type of drill regularly.

• Plan Review: Plan reviews are often the first test applied to a new plan. In this test, top management and some key BCP personnel review the relevance and completeness of a plan. Such a review can verify risk and BIA results, and help you check for gaps and inconsistencies among continuity documents.
• Tabletop or Structured Walkthrough: A tabletop test requires more preparation and time. It provides a role-playing exercise for recovery teams.
• Simulation or Walkthrough Drill: In a walkthrough drill, your continuity team physically completes the type of tasks they'd find in a crisis. They may practice evacuating a building during a fire, restoring a backup, or switching to another communication frequency.
• Functional or Live Scenario: Functional tests include a complete physical drill of continuity plans. Live tests may focus on one aspect of the plan or include the complete plan. They may include one part of the company or all team members.

Be sure to document what happened in the test so everyone involved in the exercise — and especially those who created the plan — can understand what did and didn’t go well, and can revise as necessary.

Business Continuity Management Policy Statement

A business continuity policy statement is a written document that outlines an organization’s business continuity management program. The policy statement should be communicated to all employees and should be signed and endorsed by the organization’s senior management.

See real-world examples of a business continuity policy statement .

Cultivating Awareness of Business Continuity Plans

The best business continuity system is useless if no one knows about it. Find ways to promote your plans in daily company activities, and discuss business continuity regularly in company and team meetings. Also, be sure to include the business continuity manager in cross-functional planning meetings so they can represent the business continuity perspective. Above all, exercise your plan, test your plan, and then test again.

What Is the Importance of a Business Continuity Plan?

A business continuity plan is vital to ensure that your company mitigates downtime during a crisis. Resuming activities quickly after an event also helps ensure your company’s financial health.

How to Write a Business Continuity Plan

It is crucial that your company set up a group of people to help create your business continuity plan. The group should include senior leadership, experts, and staff. A simple, practical plan is the best plan. At a minimum, include continuity team roles and duties, and team member contact information. You should also add guidelines and checklists for dealing with unforeseen events. 

Daily business functions rely on many resources — human, utilities, machines, and even paper, pens, and pencils. Business recovery after a disruptive event is no different. See our in-depth article on writing a business continuity plan for a complete list of resource types you may want to include in a plan.

You can ask certain questions as you form your strategy, and a business continuity plan usually includes common resources and elements. See our article on how to write a business continuity plan to learn more.

Business Continuity Plan Template

This template can help you document and track business operations in the event of a disruption/disaster to maintain critical processes. The plan includes space to record business function recovery priorities, recovery plans, and alternate site locations. Plan efficiently for disruption and minimize downtime, so your business maintains optimal efficiency.

Download Business Continuity Plan Template

Word | PowerPoint | PDF

You’ll find other most useful free, downloadable business continuity plan (BCP) templates, in Microsoft Word, PowerPoint, and PDF formats in this article . 

What Is a Business Impact Analysis and Why Is It an Important Part of a Business Continuity Plan?

A business impact analysis (BIA) is one of the most important parts of business continuity planning. The analysis considers how an unforeseen disruption could affect a company. BIA results also suggest how a business can recover from a crisis.

The business impact analysis will include details on the following:

• Recovery time objectives that outline the organization’s goals relating to how quickly various services and processes will resume after an event
• Financial impact of an incident
• Impact on customers
• Other possible impacts of an incident
• How the organization will prioritize recovery steps
• How the organization will prioritize critical services or products
• Identification of potential revenue loss
• Identification of additional expenses the organization will incur because of the event
• Identification of insurance an organization has or needs to have
• Identification of an organization’s dependencies on other agencies, companies, and providers

See our business impact analysis toolkit to find guidelines and templates to get started.

Risk Mitigation for Business Continuity

Risk assessment is one of the first steps in preparing your business continuity plan. 

Risk management includes identifying and ranking risks, and risk control includes identifying policies and procedures to avoid and contain risks. 

To learn more about risk management , read our comprehensive guide.

The Importance of Periodically Testing an Organization’s Business Continuity Plan

Even the best business continuity plans are useless if you do not continually test them in real-world mockups. Testing helps you continuously improve procedures, and also keeps plans synched with current business context.

Robert Sollars, a security trainer and consultant from Mesa, Arizona, says, “You must exercise your plan and train your employees in it. This can be costly and unwieldy at times, but it is an absolute must. I liken this to buying a Lamborghini and letting it sit in the garage, never starting it up, never driving it, never doing anything but admiring it. Your plan must be taken out and test driven at least two to three times per year. If you don’t test it, then when the real thing pops you will realize what the books, consultants, and experts have told you is useless for your organization. Testing it allows you to figure out the bugs and tweak the necessary items to make it more efficient and effective.”

Owens adds, “If you haven’t tested your plans, you aren’t ready for a disaster.”

You can do some testing through simpler table top exercises — for example, by talking through hypothetical incidents with your team. But Owens and other business continuity experts say organizations should also periodically do exercises that more closely mimic a real-world event.

“Organizations need to move … to progressively more complex scenarios, involving cross-functional teams and interdependent systems and processes,” he writes in a blog post about business continuity. “This is the only way that a company can get outside its comfort zone to truly understand if what they have designed will really work. My preference is to involve role-playing, actors, and include participation from vendors, business partners, and local law enforcement when appropriate. This will almost always result in lessons learned and opportunities to improve the plan, which is another great outcome.”

The most important result from testing your plan is an understanding of where theoretical solutions won’t work in real events. This understanding will then allow your organization to amend the plan to be more effective.

What Is a Business Continuity Plan Governance Committee?

Many companies set up a business continuity plan governance committee, which consists of staff members and senior leaders (their continuity efforts is vital). Governance tasks include writing the business continuity plan and supervising ongoing plan maintenance.  

The committee is often responsible for the following duties:

• Approving the governance structure of the committee
• Clarifying the roles of committee members and others working on the plan
• Overseeing the creation of working groups to develop and implement the plan
• Providing overall direction and communicate important information to employees
• Approving the continuity plan and essential specifics within it
• Setting priorities within the plan

The committee often includes the following members:

• A senior leader from the business, often the sponsor
• A business continuity manager and assistant manager
• The company employee, or outside consultant, who will serve as overall coordinator of the business continuity plan
• The company’s security officer
• The company’s chief information officer, or information technology leader
• Representatives from the company’s business department, to help with the business impact analysis
• An administrative representative

How to Cultivate Resilience in Your Organization

A resilient organization has the tools and abilities to survive a disruptive event, and also regularly looks for new threats and adapts to changes in the organizational and industry landscape. Resilience experts recognize two types of resilience: reactive resilience uses a company’s existing processes to meet and overcome a crisis; proactive resilience anticipates disruptions and considers methods to prevent problems.  

Real World Example: Lessons Learned About Business Continuity from the Terrorist Attacks of Sept. 11, 2001

Organizational leaders and business continuity experts learned a lot from the terrorist attacks of September 11, 2001. Worst of all, the attacks killed thousands of people. But they also severely disrupted communications, financial transactions, and some commerce in New York City and throughout the world.

The following are among the lessons learned:

• Business continuity plans must be tested frequently, and updated where needed.
• The plans must assume a wide range of threats.
• The plans must take into account how much companies, agencies, and other entities depend on each other.
• Key people from any organization must be available and reachable when an incident happens.
• The ability to communicate, especially through landline phones, cell phones, and the internet, is vital.
• Sites that organizations use for backup of their digital information should be located at a distance from their primary information technology site.
• Employee support and counseling may be important during and after a crisis.
• An organization should store copies of its business continuity plan at a location apart from its primary location.
• Security perimeters around the scene of an incident may be large, which may affect employees’ access to organization facilities for long periods.

Legislation Governing Some Business Continuity Management and Planning

The United Kingdom did approved the Civil Contingencies Act in 2004, which requires businesses to have business continuity plans in place.

Some industries do have regulatory bodies that may impose business continuity requirements within those industries. For instance, the Financial Industry Regulatory Authority (FINRA) is a private self-regulatory organization overseeing the U.S. financial securities industry. FINRA established FINRA Rule 4370. This rule requires securities firms to create and maintain written business continuity plans. Utility bodies, such as North American Electric Reliability Corporation ( NERC ) and Federal Energy Regulatory Commission ( FERC ), also require continuity plans.

Guidelines, Standards, and Resources Providing Guidance on Business Continuity Management and Planning

Organizational leaders can use a number of standards set by industry and other groups to guide their business continuity planning and management programs. Below are some commonly used standards:

• ISO 22301 : Developed by the International Organization for Standardization (ISO), a standard-setting body, this group of standards sets out appropriate business continuity management practices. Learn more about how this standard can help businesses of all sizes in our guide to ISO 22301 . 
• NFPA 1600 : Developed by the National Fire Protection Association, the standard is one of the most widely recognized in the U.S. on emergency preparedness and business continuity.
• National Institute of Standards and Technology SP 800-34 : Sets contingency planning standards for federal information systems in the U.S.
• SPC-2009 — Organizational Resilience : Security, Preparedness and Continuity Management Systems provides critical business and infrastructure security standards developed by the American Society for Industrial Security.
• ISO 27000 : Standards for security in information technology systems, which include standards for business continuity in information technology. Learn more about ISO 27000 and find free checklists and templates . 
• DRI International : Professional Practices for Business Continuity Management
• Federal Emergency Management Agency (FEMA): Continuity Guidance Circular: Continuity Guidance for Non-Federal Entities: An 86-page formal document, the circular presents FEMA’s perspective on how businesses can prepare for disasters.
• Insurance Institute for Business & Home Safety: Open for Business Continuity Toolkit: This site offers a video, FAQ, and downloadable continuity planning tools.

What Is the Business Continuity Institute?

The Business Continuity Institute (BCI), based in the United Kingdom, is a non-profit professional organization providing education, certification, and leadership on business continuity management. The Institute has more than 8,000 members in more than 100 countries.

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• Business Continuity Plan Basics
• Understanding BCPs
• Benefits of BCPs
• How to Create a BCP
• BCP & Impact Analysis
• BCP vs. Disaster Recovery Plan

Frequently Asked Questions

• Business Continuity Plan FAQs

The Bottom Line

What is a business continuity plan (bcp), and how does it work.

Investopedia / Ryan Oakley

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

• Business continuity plans (BCPs) are prevention and recovery systems for potential threats, such as natural disasters or cyber-attacks.
• BCP is designed to protect personnel and assets and make sure they can function quickly when disaster strikes.
• BCPs should be tested to ensure there are no weaknesses, which can be identified and corrected.

Understanding Business Continuity 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:

• Determining how those risks will affect operations
• Implementing safeguards and procedures to mitigate the risks
• Testing procedures to ensure they work
• Reviewing the process to make sure that it is up to date

BCPs are an important part of any business. Threats and disruptions mean a loss of revenue and higher costs, which leads to a drop in profitability. And businesses can't rely on insurance alone because it doesn't cover all the costs and the customers who move to the competition. It is generally conceived in advance and involves input from key stakeholders and personnel.

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 information technology 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:

• Business Impact Analysis : Here, the business will identify functions and related resources that are time-sensitive. (More on this below.)
• Recovery : In this portion, the business must identify and implement steps to recover critical business functions.
• Organization : A continuity team must be created. This team will devise a plan to manage the disruption.
• Training : The continuity team must be trained and tested. Members of the team should also complete exercises that go over the plan and strategies.

Companies may also find it useful to come up with a checklist that includes key details such as emergency contact information, a list of resources the continuity team may need, where backup data and other required information are housed or stored, and other important personnel.

Along with testing the continuity team, the company should also test the BCP itself. It should be tested several times to ensure it can be applied to many different risk scenarios . This will help identify any weaknesses in the plan which can then be corrected.

In order for a business continuity plan to be successful, all employees—even those who aren't on the continuity team—must be aware of the plan.

Business Continuity Impact Analysis

An important part of developing a BCP is a business continuity impact analysis. It identifies the effects of disruption of business functions and processes. It also uses the information to make decisions about recovery priorities and strategies.

FEMA provides an operational and financial impact worksheet to help run a business continuity analysis. The worksheet should be completed by business function and process managers who are well acquainted with the business. These worksheets will summarize the following:

• The impacts—both financial and operational—that stem from the loss of individual business functions and process
• Identifying when the loss of a function or process would result in the identified business impacts

Completing the analysis can help companies identify and prioritize the processes that have the most impact on the business's financial and operational functions. The point at which they must be recovered is generally known as the “recovery time objective.”

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.  

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How to craft an effective business continuity plan

Let me take you back in time to the United Kingdom in the 1970s. Punk music was gaining popularity, and the Sex Pistols entered the punk rock scene with the force of a shooting star, capturing fans’ attention.

But as quickly as they arrived, they quickly left the scene. When they broke up in 1978 after a period of internal conflicts, legal troubles, and their frontman’s imprisonment, fans were left both shocked and surprised.

Just like the Sex Pistols, plenty of companies experience rapid growth and success, only to face unexpected challenges and internal conflicts that result in their downfall.

In this article, we’ll draw inspiration from the Sex Pistols’ turbulent journey to explore the concept of business continuity planning (BCP). We’ll look at what a BCP is, why you need one and delve into the strategies and contingency measures that can help you maintain your rhythm and continuity, even when faced with the inevitable storms that can disrupt your operations.

What is a business continuity plan?

A business continuity plan describes how you’ll continue your business when disaster hits. It is a structured strategy outlining how your organization will maintain essential functions when disaster strikes, to ensure minimal downtime and guarantee that operations continue.

Why do you need a BCP in place?

The BCP is crucial and revolves around ensuring your resilience and ability to continue operating in the face of unexpected disruptions, such as natural disasters, cyberattacks, or other emergencies.

Let’s look at it a bit closer, and understand some of the key reasons to have a BCP better:

Minimize downtime

Protect revenue and reputation, compliance and legal requirements, resource allocation, maintain customer service, employee safety.

A BCP helps you minimize downtime. It does this by providing a structured approach to quickly recover and resume your critical business functions.

Example: You’re a retail company with an extensive online presence. If your website experiences a cyberattack that takes it offline, a well-prepared BCP outlines the steps to take to mitigate the attack, get your website back up in no time, and allow you to continue serving your customers.

No one likes disruptions as they result in revenue loss and can damage your reputation. A BCP helps you protect against financial losses and keep customer trust.

Example: You’re the owner of a restaurant chain with multiple locations and one of your branches has a food safety crisis. A BCP can guide you in managing the crisis, ensuring food safety compliance, and communicating effectively with customers to maintain trust in the brand and other locations.

Some industries, like the financial, and pharma industries, have regulatory requirements that mandate businesses to have BCPs in place. Failure to do so has legal and financial consequences.

Example: You’re the owner of a FinTech company. You are required by regulators to have robust BCPs to ensure customer data security and financial system stability.

When a crisis hits you need the right resources to get you back up and running. A BCP helps allocate resources effectively during a crisis, ensuring that personnel, equipment, and materials are used efficiently to address the most critical needs.

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Example: You’re a manufacturing company hit by a sudden supply chain disruption because the Suez Canal is blocked again. You use your BCP to allocate available resources to meet customer demands and minimize production delays.

When all hell breaks loose you want to make sure customer experience takes a minimum blow. A BCP outlines measures to maintain customer service and communication, so customers receive timely updates and support.

Example: You run an airline and there is a labor strike. Your BCP tells you how to manage customer inquiries, rebook affected passengers, and maintain a level of service.

Let’s not forget about the well-being of your employees. During a crisis, this is a top priority. A BCP includes procedures for evacuations, remote work arrangements, and employee support.

Example: There is a fire at your workplace. The BCP outlines evacuation routes, assembly points, and contact information for employees to report their safety status.

Business continuity planning: Steps for success

That’s a lot of reasons, right? Now that we addressed the necessity and urgency of having BCP, let’s look at 5 steps to creating a successful one:

• Analyze your company
• Assess the risk
• Create the procedures
• Get the word out
• Iterate and improve

1. Analyze your company

In this phase you conduct an analysis to identify critical activities, determine which activities must continue, which can be temporarily paused, and which can operate at a reduced capacity.

You then assess the financial impact of disruptions. This involves asking yourself the question, “How long can I operate without generating revenue and incurring recovery costs?”

As this step covers your whole company, it’s important to get key stakeholders involved from the beginning.

2. Assess the risk

Now you have a good overview of your critical processes and the impact of disruption. At this point, pivot your attention to the risks they face, how well you can handle when things don’t work as usual, and how long you can manage if things go wrong.

The goal here is to understand what could go wrong and find ways to avoid, reduce, or transfer them. This assessment will help you strengthen your preparedness and resilience.

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Think about risks specific to your industry and location

It’s important to consider both internal (e.g. an IT system failure or employee shortage) and external threats (e.g. a natural disaster or supply chain disruption) to your critical business activities.

3. Create the procedures

Once you analyze and assess, you need to create procedures.

Develop detailed, step-by-step procedures to minimize risks to your organization’s people, operations, and assets. This can include changes to your operating model, such as using alternative suppliers or implementing remote work options.

4. Get the word out

A plan is just a plan and no one will know how to act if you don’t communicate.

This step is all about communication. Integrate the BCP into your operations, policies, and company culture, and train, test, and communicate with your employees.

And don’t forget that communication is not limited to your company only. Communicate with external stakeholders, customers, suppliers, and so forth.

5. Iterate and improve

Before implementing your BCP ensure its effectiveness.

Don’t worry there are plenty more options to test your BCP. Consider involving external stakeholders or vendors as it makes exercises more realistic. Frequently train those who are accountable for executing the BCP.

After experiencing a real incident or conducting a training exercise, update your plan to improve its ability to protect your business. Keep in mind that both your organization’s development and the circumstances you operate in change, so a regular review isn’t a luxury but a necessity.

How to structure your continuity plan

Now you have a high-level understanding, let’s look at how to structure your business continuity plan.

You can find a copy of the template I use here .

Make sure to include the following sections in your BCP:

Version history

Executive summary, functions and process prioritization, plan activation, governance and responsibilities, recovery plans, crisis communication plan, emergency location and contents, review and testing.

This section shows the revision history. It includes the version numbers of the changes made, by whom, when, and who approved the changes. The revision history allows anyone reading the BCP to understand how it has evolved over time.

The executive summary provides a brief summary of the key objectives, goals, scope, and applicability of the BCP.

This chapter outlines the critical functions and processes in scope of continuation in case of a disastrous event.

This section refers to the risk and business impact assessment outcome. Its aim is to set out what triggers the activation of the plan.

Governance and responsibilities talks about who has to act when the BCP is activated. It includes the members, a description of their responsibilities, contact details of the BCP team, and the chain of command during a crisis.

This section builds upon the business continuity strategies, specifically the one chosen when a disaster occurs. It describes the detailed recovery plans for each critical function, the procedures for restarting operations, resource allocation, and recovery time objectives (RTOs).

Here you cover the internal and external communication strategies. You also address employee awareness and training activities.

Now there is a good chance the disaster will require your crucial activities to temporarily continue at a different location. This section covers all details about the location and what needs to be available at the location.

The BCP is to be tested to reduce the risk of missing things or even worse failing. Here jot down the testing procedures and document results and lessons learned.

This section includes all appendices. Think about the following

• Supporting documents, such as contact lists, maps, and technical specifications
• References to external standards, guidelines, or regulations
• Training programs for BCP team members
• Review of insurance policies
• Financial reserves and funding for recovery efforts
• Procedures for keeping the BCP documentation up to date

Business continuity plan example

Earlier this year, the Koninklijke Nederlands Voetbal Bond (KNVB), which is the Royal Dutch Football Association, was hit by ransomware. The cyberattackers threatened to share personally identifiable information captured and the KNVB paid over one million euros to avoid this from happening.

What could have been done to mitigate the ransomware attack risk?

The Risk of the attack to succeed could have been mitigated with:

• Regular data backups
• Segmentation of networks
• Intrusion detection systems

How to ensure business continuity in case of ransomware?

In response to the ransomware incident, and to allow for continued business as usual as soon as possible, steps could include:

• Isolating affected systems
• Activating backups
• Notifying law enforcement
• Engaging with a cybersecurity incident response team

Key takeaways

A business continuity plan (BCP) is like a safety net for your business when things go haywire. It helps you keep going, avoiding downtime, revenue loss, and reputation hits. On top of that, it’s a legal must in certain industries.

To make a solid BCP, just follow five steps: figure out what’s crucial for your business, spot the risks, plan how to bounce back, make sure everyone knows the plan, and keep fine-tuning it.

Structurally, your BCP should have sections like history, a quick guide, what’s most important, when to activate it, who’s in charge, the nitty-gritty recovery plans, how communication is done, where to go in a crisis, how to test the BCP works, and some extra info.

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What Is Business Continuity?

Business continuity is an organization's ability to maintain or quickly resume acceptable levels of product or service delivery following a short-term event that disrupts normal operations. Examples of disruptions range from natural disasters to power outages.

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Is business continuity the same as business resilience or disaster recovery?

Business continuity, disaster recovery, and business resilience are not the same, but they are related.

• Business continuity is a process-driven approach to maintaining operations in the event of an unplanned disruption such as a cyber attack or natural disaster. Business continuity planning covers the entire business—processes, assets, workers, and more. It isn't focused solely on IT infrastructure and business systems.
• Business resilience encompasses crisis management and business continuity. It requires a response to all types of risk that an organization may face. An organization that is business resilient is essentially in a constant state of "expecting the unexpected." It means continuously preparing to meet disruptions head-on, including events of extended duration that may affect more than one facility or region.
• Disaster recovery focuses specifically on how to restore an enterprise's IT infrastructure and business systems following a disruption. It is considered an element of business continuity. A business continuity plan (BCP) might contain several disaster recovery plans, for example.

What is a business continuity strategy?

A business continuity strategy is a summary of the mitigation, crisis, and recovery plans to be implemented after a disruption to resume normal operations. "Business continuity strategy" is often used interchangeably with "business continuity plan." Both consider the broader goals, legal and regulatory requirements, personnel, and even the business's clients and partners.

What does a business continuity plan mitigate?

A relevant and well-tested BCP can help ease the negative impacts of an unexpected business disruption in many ways.

• Financial impact: Disruptions to product supply chains and critical services to customers can directly affect sales and revenue. Downtime caused by unplanned disruptions can also result in higher costs for a business as it looks to repair operations and mitigate previously unidentified threats.
• Reputation and brand impact: Failure to resume operations quickly and supply customers with the products or services they expect can prompt customer defections and tarnish the brand. Damage to reputation can in turn cause investors and capital sources to pull back funding, exacerbating the financial impact of a business disruption.
• Regulatory impact: Customers and vendors are likely to complain when businesses fail to respond appropriately to disruptions, which may result in regulatory scrutiny or even censure. In highly-regulated industries, such as energy and financial services, business continuity planning is mandatory to ensure regulatory compliance.

Business continuity planning activities

A well-crafted and tested BCP can go a long way toward helping a business recover swiftly from a disruption. These are key steps a business may want to take.

Identifying critical business areas and functions

Business continuity planning begins with identifying an organization's key business areas and the critical functions within those areas. A business needs to determine and document the acceptable downtime for each area and function considered vital to operations. Then a plan to restore operations can be established, documented, and communicated.

Analyzing risks, threats, and potential impacts

Creating appropriate response scenarios requires knowing what disruptions the business could experience. An upfront analysis of risks and threats is necessary in order to prepare contingency responses to events. Organizations can also conduct a back-end analysis after an event to gather metrics and assess lessons learned. This information can drive improvements in how the business responds to disruptions.

Outlining and assigning responsibilities

A BCP details which personnel will be responsible for implementing specific aspects of the plan. It also identifies key decision-makers and a chain of command. The plan should include alternative options in case primary personnel are incapacitated or unavailable to respond to the disruption.

Defining and documenting alternatives

A business continuity plan should define and document alternative communication strategies in case telephone services or the internet are down. Enterprises should also have alternatives for mission-critical spaces such as data centers or manufacturing facilities in case buildings are damaged.

Assessing the need for critical backups

Essential equipment may be damaged or unavailable during a disruptive event. A business should consider whether it has access to backup equipment and uninterruptible power supplies (UPS) during extended power outages. Business-critical data needs to be backed up regularly, and is mandatory in many regulated industries.

Testing, training, and communication

Business continuity plans need to be tested to ensure they will be effective. (Disaster recovery plans should be tested as well.) A best practice is to conduct a plan review at least quarterly with leadership and key team members who are responsible for executing the plan.

Many companies use role-playing sessions, simulations, and other types of exercises several times per year to test their BCPs. This approach helps to identify gaps, develop strategies for improvement, and determine if more resources are needed. Targeted staff training and communicating to the whole workforce the benefits of having a business continuity plan are also vital to its success.

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A Deming Cycle Approach to Business Continuity Strategy

Building your business continuity strategy on a Design-Test-Reflect-Iterate cycle lays a solid, adaptable foundation to manage dynamic risks.

How to Build Your Business Continuity Strategy

It’s not a question of if but when a business will encounter disruption. Challenges are inevitable, whether natural disasters, cybersecurity breaches, or other unforeseen emergencies. How your company responds will determine its trajectory.

Forty-three percent of small businesses affected by a natural disaster never reopen. But a business continuity strategy can prevent your business from living the statistics. We’ve talked to financial, aerospace, and telecom industry leaders to understand their business continuity strategies. Read on to learn about crafting an adaptable, systemic approach to navigating expected and unforeseen challenges.

Download Our Business Continuity Checklist

A cyclical approach to business continuity.

Business is not static, and neither are the threats to operations. Organizations need dynamic frameworks to navigate uncertainty in an environment characterized by constant change and evolving risks. That’s why many companies turn to the Deming Cycle, also known as PDCA (Plan-Do-Check-Act).

• Plan: Develop a robust continuity strategy
• Do: Execute the preparedness measures
• Check: Assess effectiveness through testing
• Act: Adjust based on feedback for continual improvement

A business continuity strategy ensures your organization can maintain operational resilience during and after a crisis. With a systematic approach, you can manage various disruptions effectively. But first, you need to understand the potential threats to your business and how those threats would disrupt operational continuity.

This assessment process is critical for your initial planning and as an ongoing pulse check to ensure your business continuity strategy is effective—considering how your organization’s vulnerabilities and risks are changing.

• Design: Develop the initial framework
• Test: Implement controls to assess functionality and performance
• Reflect: Evaluate outcomes and identify critical optimizations
• Iterate: Adapt the strategy for improved business continuity management

Better business continuity planning with SAC Wireless

On The Employee Safety Podcast , we spoke with Larry Pomykalski, Director of National Programs & Business Continuity at SAC Wireless. Larry underscores the need to cast a wide net when planning for interruptions. The plan should be broad enough to encompass a broad range of scenarios while maintaining business processes. By continuously evaluating and adjusting plans based on feedback and changing circumstances, it’s possible to minimize business disruption and speed recovery.

Larry notes that while it’s impossible to foresee every disruption, having a variety of plans enables organizations to modify strategies quickly to suit the current situation. By identifying critical business functions and establishing recovery time objectives, businesses can prioritize risks as they develop effective mitigation strategies tailored to their specific needs.

“Remain open-minded; be imaginative about what you can and can’t see impacting your organization.[…] That’s the first step in tracking potential threats,” Larry advises.

1. Design a working business continuity management strategy

Identify stakeholders and plan leaders.

A business continuity management (BCM) team is responsible for implementing your plan, so choosing the right people is vital to success. It’s typically an interdisciplinary team made up of individuals from various departments and roles within the organization, including:

• Business Continuity Manager: This individual leads the continuity program’s development, implementation, and maintenance.
• Risk Management Specialist: They identify, assess, and prioritize risks to the organization’s operations.
• IT Director/Manager: This leader ensures critical IT systems and infrastructure resilience.
• Operations Manager: Their role involves coordinating continuity efforts across departments and ensuring operational readiness.
• Human Resources Manager: They are responsible for developing employee safety, communication, and workforce continuity plans.
• Facilities Manager: This leader addresses physical security and facility-related risks.
• Supply Chain Manager: They are responsible for assessing supply chain risks and developing strategies for continuity.
• Legal and Compliance Officer: Their responsibilities include continuity plan compliance with regulatory requirements and contractual obligations.
• Communications Coordinator: Their main task is to develop communication protocols and channels for internal and external stakeholders during emergencies.
• Team Leaders: These individuals act as boots on the ground, providing direction and guidance to workers on the floor, in the field, or wherever they’re located.

By assembling a diverse and capable team with representation from these key areas, organizations can effectively address all aspects of business continuity planning and enhance their resilience to disruptions.

Assess potential risks and impacts

Only by knowing your risk profile inside and out can you manage and mitigate the risks to business continuity. The more you know, the more proactive you can be.

Assessments come in different forms. A threat or risk assessment considers the potential causes of disruptions, such as natural disasters, cyberattacks, power outages, supply chain interruptions, public demonstrations, public health risks, and many more. On the other hand, a business impact analysis focuses on the impacts that arise from these emergencies and disruptions, such as downtime, travel delays, compromised data, increased costs, facilities damage, delayed or lost income, regulatory fines, reputational damage, and more.

Begin with both types of assessment to understand the vulnerabilities and risks that could threaten business continuity.

Navigate resiliency challenges with regular assessments

Regular vulnerability assessments are crucial to maintaining business continuity, especially in the face of evolving challenges, such as a geographically dispersed workforce and climate-related disruptions. Jeff Dow, Manager of Protection and Resiliency at a major financial organization, highlighted the importance of staying vigilant during a recent interview on The Employee Safety Podcast .

Jeff’s team recognized that transitioning to a hybrid work model, with employees across 49 states, introduced new risks and vulnerabilities. They conducted thorough risk assessments to identify potential threats related to remote work, like extreme weather events.

They concentrated on three assessment methods to adapt their plans supporting business continuity:

Set your recovery time objective (RTO)

When setting a recovery time objective (RTO), you must consider your organization’s specific needs and priorities. Start by evaluating the criticality of each business process or system, considering factors such as customer expectations, regulatory requirements, and financial implications. Determine the maximum tolerable downtime for each function, keeping in mind that mission-critical systems may require a shorter RTO than less essential processes.

Once you’ve defined the RTOs for your key business functions, develop comprehensive strategies to achieve them. This may involve implementing redundant systems, establishing backup procedures, and investing in technologies that minimize downtime. Review and update your RTOs to ensure they remain relevant and aligned with your evolving business needs.

Remember to conduct tests and simulations regularly to validate the achievability of your RTOs and identify areas for improvement in your recovery strategies. Setting realistic and achievable recovery time objectives can enhance your organization’s preparedness for disruptions and minimize their impact on your operations and stakeholders.

Develop plans to prevent, mitigate, respond to, and recover from business disruptions

You might as well consider every version of your business continuity plan (BCP) a rough draft. Until it has been tested, you can’t be sure it’s comprehensive or effective enough to safeguard your business operations. Here are some necessary elements to consider for your dynamic strategy:

• The tools and the team to monitor threats and determine their potential impacts on your organization
• An emergency communication plan and a software system to keep everyone connected during expected and unexpected crises
• Backup plans, equipment, locations, power, and any other redundancies that will keep operations running

Read more about the business continuity planning process on our blog.

2. Test your plan during actual and simulated emergencies

Train employees.

In the previous step, you determined which stakeholders need to be involved in the planning and preparedness efforts, risk mitigation, response procedures, disaster recovery, and any other elements of your business continuity strategy. This next phase involves preparing these people for their responsibilities. Here are suggested trainings tailored to each stakeholder’s role within the business continuity framework:

• Business Continuity Manager: Training should cover developing and maintaining the continuity program, including risk assessment methodologies, plan development, testing protocols, and coordination with departmental stakeholders.
• Risk Management Specialist: Offer detailed training on risk assessment techniques such as scenario analysis, impact assessment, and probability assessment.
• IT Director/Manager: Conduct technical training on data backup and recovery procedures, system redundancy configurations, cybersecurity best practices, and incident response protocols.
• Operations Manager: Provide training on crisis management principles, including incident response procedures, business impact analysis, and resource allocation strategies.
• Human Resources Manager: Offer comprehensive training on crisis communication strategies, employee safety protocols, and workforce continuity planning. Include modules on remote work arrangements, employee assistance programs, and psychological support during crises.
• Facilities Manager: Review building security systems, access control protocols, emergency response drills, and facility maintenance procedures.
• Supply Chain Manager: Provide training on supply chain risk management techniques, including supplier assessment methodologies, inventory management strategies, and alternative sourcing options.
• Legal and Compliance Officer: Cover topics such as data protection laws, industry standards, contractual obligations for continuity services, and legal implications of business disruptions.
• Communications Coordinator: Provide comprehensive training on crisis communication strategies, including message development, media relations, stakeholder engagement techniques, and communication channel management.

By providing detailed and targeted training to each stakeholder, you ensure they have the necessary knowledge and skills to contribute to the organization’s business continuity efforts effectively. Of course, a significant part of that training is testing the skills they’ve learned.

Conduct drills and other exercises

Emergency drills , full-scale simulations, and tabletop exercises can test your preparedness, response, and recovery plans. These exercises allow you to identify weaknesses and gaps in your plans in a controlled environment, enabling you to address them proactively before a real crisis occurs. By simulating various scenarios, you can evaluate the effectiveness of your communication protocols, decision-making processes, and resource allocation strategies.

Involving key stakeholders in these exercises fosters collaboration, enhances coordination, and increases familiarity with their roles and responsibilities during emergencies. Regularly conducting drills and exercises ensures your team remains well-prepared and agile in responding to unexpected events, strengthening your organization’s resilience and ability to navigate challenges effectively.

After-action reviews following exercises, not just actual emergencies, are essential for continuous improvement and learning. These reviews provide an opportunity to evaluate the effectiveness of your response and recovery plans in a structured manner before putting them to the test with your business on the line. By examining what went well and what could be improved, you can identify lessons learned and best practices to incorporate into future planning efforts.

On top of that, conducting after-action reviews fosters a culture of accountability and transparency within your organization, encouraging open communication and constructive feedback among team members. This process allows you to iterate on your strategies and capabilities, ensuring you are better prepared to handle real emergencies when they arise.

Activate the plan as any actual threats or disruptions arise

Hopefully, you’ve been able to prioritize training and exercises before a significant crisis hits. Doing so ensures that your team is well-prepared to execute the plan with confidence and efficiency when it matters most.

However, even if you haven’t had the opportunity to conduct extensive training beforehand, your preparation through drills and simulations will still significantly enhance your response capabilities. Remember to remain agile and adaptable during emergencies, leveraging the knowledge and experience gained from training to make informed decisions and effectively manage the situation.

3. Reflect on the plan’s effectiveness and its need to evolve

Perform after-action reviews.

After-action reviews (AARs) enhance business resilience by providing a structured post-crisis evaluation and improvement framework. These reviews thoroughly examine the response to a crisis or disruption, aiming to identify strengths, weaknesses, and opportunities for enhancement. They allow you to test your business continuity plan and management systems in real-time to address any gaps. Typically conducted shortly after the event, AARs gather input from key stakeholders involved in the response effort, including frontline responders, managers, and support staff.

Conducting an AAR begins with a comprehensive review of the incident, including the timeline of events, actions taken, and outcomes achieved. This retrospective analysis allows participants to understand what transpired during the crisis and how the organization responded. Facilitators guide discussions by prompting participants to reflect on their experiences, share observations, and identify successes and improvement areas.

Central to the AAR process is emphasizing open and honest communication, creating a safe space for participants to voice their perspectives and insights without fear of retribution. This collaborative approach fosters a culture of continuous learning and improvement within the organization. By soliciting feedback from all levels of the organization, AARs capture diverse perspectives, enriching the insights gained from the review process.

Determine gaps and necessary contingency plans

The ultimate goal of conducting AARs is to distill lessons learned from the crisis response and translate them into actionable improvements to the organization’s business continuity plan and risk management strategy. This may involve updating procedures, refining communication protocols, or investing additional resources to address identified gaps. By leveraging the insights gleaned from AARs, organizations can strengthen their preparedness for future crises, enhancing their resilience and ability to navigate adversity effectively.

Boeing’s all-hazards approach to business continuity

An effective business continuity plan relies heavily on the team’s ability to collaborate seamlessly, even across physical and geographic boundaries. On The Employee Safety Podcast , we spoke with Keith Berthiume, Enterprise Emergency Preparedness Program Manager at Boeing, to understand why Boeing is an excellent example of an agile, collaborative approach.

Keith underscores the significance of assembling diverse teams to evaluate impacts, recognize critical needs and functions, and coordinate responses promptly. This real-time collaboration has proven instrumental for Boeing, enabling the company to swiftly adapt and respond to evolving situations, such as the challenges posed by the COVID-19 pandemic.

Boeing’s success highlights the importance of effective communication and coordination within the organization and with external stakeholders, including service providers and off-site teams. Businesses can enhance their resilience and readiness to navigate complex, unforeseen disruptions by fostering collaboration across boundaries.

“Having senior leaders all together on a team is a significant force multiplier because the executives at the highest level of the company are able to ensure implementation of integrated and coordinated response, seamless coordination, and a unified direction from the leadership team,” Keith told us.

4. Iterate on your strategy in light of dynamic risks

Adapt to company changes.

The after-action reviews are what keep the cycle turning. While the advance threat and impact assessments help you align with and prioritize what you know, post-event reviews are about opening up to what you don’t know—or what you didn’t know with the most recent iteration of your plan.

You may only know about certain vulnerabilities once you are in an actual or simulated emergency. So, looking back and acting on those learnings is foundational to business continuity.

Adapt to changing risk

Twenty years ago, businesses rarely considered the effect that a prolonged pandemic could have on their ability to operate. Continuity plans were based more on immediate threats like natural disasters or economic downturns.

However, the landscape has shifted dramatically, emphasizing the need for organizations to adapt and expand their risk management strategies to encompass emerging threats such as pandemics. The global impact of COVID-19 has underscored the importance of proactive planning and preparedness for unforeseen events that can disrupt operations on a massive scale. As businesses navigate the complexities of this evolving risk landscape, it becomes increasingly crucial to prioritize resilience and agility in their continuity planning efforts.

In response to the lessons learned from COVID-19 and other emerging risks, business leaders can take proactive steps to stay ahead of future challenges. To adapt to changing risks, you should:

• Conduct regular risk assessments to identify vulnerabilities.
• Diversify supply chains to mitigate disruptions.
• Prioritize employee well-being and flexible work arrangements.
• Implement cross-training programs to ensure redundancy in critical roles.
• Maintain adequate financial reserves to weather economic uncertainties.
• Strengthen cybersecurity measures for remote work environments by implementing multi-factor authentication, encryption, and regular security training.

Organizations can also make use of various technologies for proactive threat monitoring. Threat intelligence platforms can help them discover cyber risks, while real-time alert tools can keep them ahead of natural disasters or other widespread disruptions.

Strategic Planning to Keep the Wheel Turning

Business continuity planning is not a nice-to-have but a necessity in today’s unpredictable world. Whether it’s a natural disaster, cybersecurity breach, or other unforeseen emergency, the ability to respond effectively can make or break a business. As industry leaders and best practices highlight, adopting a structured approach like the PDCA cycle is essential for building resilience and adaptability.

Learning from business continuity strategy examples, companies can prioritize collaboration, real-time communication, and flexibility in their response efforts. Download our business continuity checklist for a template to help guide you on solid business continuity planning.

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Key Benefits of Business Continuity Planning

Published on November 01, 2023

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Everything you need to know about business continuity, straight to your inbox.

According to Deloitte, the measure of a successful business lies not only in your ability to retain customers and serve the market but also in your capacity to withstand unexpected events that could steer your business away from your desired direction.

51% of businesses struck by a natural disaster shut down within two years of the incident. But even more alarming, a staggering 93% facing data breaches or cybersecurity issues cease operations within a year.

Natural disasters and cybersecurity incidents, among other business continuity incidents , can be devastating, not only in terms of immediate damage but also in their long-term effects on business continuity and reputation.

Let's look at some advantages of business continuity management and planning.

12 Key Benefits of Business Continuity Planning

1. reduce operational downtime.

Operational downtime can lead to significant financial losses, as every moment of inactivity can equate to lost revenue. A well-constructed business continuity plan is designed to mitigate these interruptions and ensure that operations resume swiftly. By minimising downtime, businesses can maintain productivity and safeguard their revenue streams.

2. Boost Brand Trust

A company's ability to maintain operations and recover rapidly from disruptions can significantly bolster its image. Customers, the general public, and key stakeholders value reliability. By demonstrating resilience through a business continuity plan, businesses can enhance trust and solidify their company reputation in the market.

3. Comply With Regulatory Requirements

Many industries are bound by legal and regulatory standards that mandate certain levels of preparedness. A comprehensive business continuity strategy ensures that businesses not only meet these standards but also operate within the legal framework. This adherence can prevent potential legal complications and penalties.

4. Facilitate Decision-Making

During a crisis, swift and informed decisions are crucial. Business continuity planning offers a structured framework that guides decision-making processes. This ensures that businesses can act proactively, rather than only reacting to events, leading to more effective crisis management.

5. Protect Business Assets

For many businesses, assets such as data, intellectual property, and physical infrastructure are invaluable. Business continuity plans emphasise the protection of these assets and ensure their security and integrity. The loss or compromise of these assets can have long-term repercussions, which make their protection a top priority.

6. Boost Employee Morale

Employees value stability and security in their workplace. A robust BC plan signals to staff that the company is prepared for challenges. This heightened morale can lead to increased job satisfaction, loyalty, and overall productivity.

7. Gain Competitive Edge

In the competitive business landscape, preparedness can make a huge difference. Companies with a well-structured BC plan can maintain operations when others falter, offering a distinct advantage. This reliability can lead to increased market share and customer loyalty.

8. Secure Supply Chain

A business's operations often depend on its suppliers. Business continuity planning ensures that these suppliers can consistently deliver, even in challenging times. By securing the supply chain, businesses can prevent potential disruptions and maintain consistent service or product delivery.

9. Benefit from Insurance Savings

Insurance providers often recognise the value of preparedness. Companies with a robust business continuity plan may be eligible for reduced insurance premiums, as they present a lower risk. This can lead to significant financial savings over time.

10. Enhance Risk Management

Risk management is integral to business success. A comprehensive BC plan contributes to a more robust risk management strategy, allowing businesses to identify, assess, and mitigate potential threats more effectively.

11. Strengthen Stakeholder Confidence

Stakeholders, including investors and partners, value stability and foresight. A well-executed BC strategy showcases a business's resilience and adaptability, reinforcing stakeholder confidence in the company's long-term viability.

12. Ensure Operational Resilience

Unforeseen disruptions, whether minor or major, can challenge a business's operations. Business continuity planning equips companies with the tools and strategies to weather these challenges, ensuring they can continue operations and serve their customers effectively.

Risks of NOT Having a Business Continuity Plan

Cyber attacks are on the rise. With the availability of advanced and sophisticated tools, cyber attackers can now breach even the most cutting-edge IT systems, leading to substantial data breaches and the exposure of confidential information.

For businesses serving customers, a business continuity plan is a proactive measure to safeguard customer data, both personal and sensitive data, and operational business processes. Through business continuity planning , companies can anticipate and mitigate risks that could harm their reputation, reduce profits, or even lead to bankruptcy.

Also read: 40+ Cybersecurity Statistics for 2024 and Beyond

Case Study: Conti Cyberattack on the Health Service Executive (HSE)

The Conti ransomware attack on Ireland's HSE underscores the importance of business continuity planning and robust cybersecurity measures. The HSE is responsible for providing public health and social care services in Ireland. The attack disrupted health services across the country, leading to the cancellation of many outpatient appointments and other medical services.

The initial breach occurred on March 18, 2021, when a user inadvertently clicked on a malicious Microsoft Excel file from a phishing email. This allowed the malware to infiltrate the HSE's IT systems, undetected, for nearly two months.

This prolonged, undetected attack indicates a gap in the HSE's cybersecurity measures, as there was no system to alert them of the intrusion. By May 2021, when the ransomware was activated, the attackers had extensive access to the HSE's databases.

In response, the HSE initiated its Critical Incident Process, which involved disconnecting the entire National Healthcare Network from the internet. While this action aimed to contain the spread of the ransomware, it disrupted access to essential systems for healthcare professionals and administrative staff. This also had a cascading effect on health services, with hospitals having to revert to manual, paper-based systems in some cases.

The recovery process was lengthy and costly. The HSE had to work diligently to restore systems, ensure that they were secure, and regain the trust of the public. The incident also sparked discussions in Ireland and internationally about the need for better cybersecurity measures in critical infrastructure and public services.

This incident exemplifies that having a business continuity plan is not enough. Organisations must also implement robust cybersecurity measures, continuously assess potential threats, and have contingency plans in place. Effective business continuity strategy and planning ensures operations can continue during disruptions, rather than halting them entirely.

A well-developed business continuity plan can take time, but its value becomes evident when your organisation can continue functioning in the face of adversity.

Reap All the Benefits of Business Continuity Software

At Continuity2, we've empowered businesses across different industries to take proactive measures to ensure their business continuity and operational resilience.

Every business, whether big or small, grapples with unique business continuity challenges. The nature and magnitude of disruptions may vary, but the fundamental goal remains the same: to adhere to corporate governance standards and sustain operations.

Our C2 Meridian BCMS is designed to automate and assist the day-to-day management of BC plans, from conducting Business Impact Analysis (BIA) and assessing risks to carrying out BC testing and exercise and running dynamic, custom reports.

See for yourself how C2 Meridian BCMS can streamline your business continuity activities. Book a demo today .

Written by Aimee Quinn

Resilience Manager at Continuity2

With an Honours degree in Risk Management from Glasgow Caledonian University and 6+ years in Business Risk and Resilience, Aimee looks after the design and implementation of Business Continuity Management Systems (BCMS) across all clients. From carrying out successful software deployments to achieving ISO 22301, Aimee helps make companies more resilient and their lives easier in the long run.

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5 benefits of having a business continuity and disaster recovery plan

By Fritz Coyro

If the COVID-19 pandemic has taught us anything in the last year, it’s to expect and prepare for the unexpected. 

Organizations without a business continuity (BC) or disaster recovery (DR) plan struggled across the board to redefine how to do business — losing revenue along the way. But organizations that had BC and DR plans — and tested them regularly — made the transition with ease and discovered a new way of doing business. 

How does a business continuity and disaster recovery plan help organizations?

Even in a normal business climate, there are many benefits to implementing a BC/DR plan:

• Develop muscle memory:  Practicing a disaster scenario via tabletop or with a real exercise develops a kind of “muscle memory” when a situation really does happen. When (not if) an incident does happen, hours and days are shaved off the recovery process. The last thing you want to do in a chaotic time is not have a plan.
• Meet customer requirements:  Many security frameworks, vendor agreements and customers are requiring organizations to have defined, documented and tested plans in place in the case of a disaster.
• Meet insurance requirements:  Insurance providers of cyber insurance have started requiring their policy holders to have plans in place before writing a policy. This is becoming standard practice and is increasingly seen as a requirement as opposed to a nice to have.
• Build resiliency:  No one can plan for everything, but creating and implementing a plan (and practicing with it) can give you the blueprint for surviving one of many threats, from a cyberattack to a natural disaster.
• Cut down on your recovery time:  When your business is down, it’s not just the revenue loss that affects you. It’s also the hours of employee downtime, additional time spent getting back up and overall impact to your brand reputation. A BC/DR plan can be the difference between losing a few hours of employee salary versus losing a week of it. Sometimes it’s next to impossible to build back the brand image, which can do irreparable damage to the way customers view your business.

The range of challenges that a BC/DR plan can help you overcome is wider than you might think. For example, one of our clients experienced power and communications outages due to a nearby plant, but their BC/DR plans allowed them to switch to alternate processes and keep on running.

What makes up an effective business continuity plan or disaster recovery plan?

Creating a successful BC/DR plan starts with prioritization.

• By performing a business impact analysis on your applications, you can highlight which are most important to your business environment. For example, if you’re an online retailer, your website and order entry application are going to be tier one in importance to business continuity. 
• Once you know which business processes and applications are most important and have prioritized them into tiers, step two is determining what is an acceptable amount of time for those applications to be down in the event of a disaster. Since the quicker you want to recover, the more money you’ll spend doing so, you’ll want to focus on getting tier one applications back up and running. A BC/DR plan can define your acceptable timeline, as well as how long you can wait on tier 2 and other applications.
• After that, you can begin looking at your recovery options, such as which pieces of technology you may need to enable a faster recovery. Cloud-based technology was critical to enabling organizations to quickly transition to remote work during the pandemic, so organizations that had transitioned off of on-premises technology because their BC/DR plans had identified this potential challenge were already one step ahead. 
• The final piece is often overlooked but no less important. Enabling business continuity or a fast and effective recovery requires periodic testing and keeping documentation up to date. We recommend testing quarterly or annually to help ensure your plan will actually work as designed. And since your business environment is going to change after you’ve created your BC/DR plans, making necessary updates and keeping documents up to date is just as critical.

How Wipfli can help

Wipfli’s business continuity specialists can help you create effective business continuity and disaster recovery plans — from performing a business impact analysis, to helping you develop your plan, to performing testing.  Click here to learn more .

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Related content:

What are RTOs and RPOs in business continuity planning Concerned about disasters or ransomware? Practice! Fraud and cybercrimes exploding during COVID-19 Take remote work to the next level

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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.

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.

• 10 Steps to Creating an Emergency Response Plan for Your Business
• 5 Risk Mitigation Strategies for Facilities and Construction Teams

Meaghan Kelly

Former marketing content copywriter for AkitaBox.

What Is Business Continuity? Everything You Need to Know

Michael Hickins | Content Strategist | May 16, 2024

In This Article

What Is Business Continuity?

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Business continuity brings together people and technology to help organizations prepare for and overcome interruptions to normal business operations. Business continuity planning encompasses disaster recovery—the restoration of IT services following an unexpected outage—but its purpose is broader. The goal of a business continuity strategy is to keep the business up and running regardless of whether operations are impacted by an unplanned catastrophe, such as an earthquake, or a planned event, such as applying a major infrastructure patch.

Business leaders use business continuity as a paradigm for maintaining operations, even if in a temporarily limited capacity, in the event of unexpected or planned disruptions to normal business processes. These disruptions can include natural disasters, cyberattacks, armed conflict or other force majeure, global pandemics, power outages due to storms or flooding, infrastructure failures, planned maintenance activities, and even the unexpected departure of a key employee. Cloud computing technologies such as containerization and virtualization can help make business continuity measures more affordable for companies of all sizes.

Key Takeaways

• Business continuity involves developing processes ahead of time to maintain availability during unexpected or planned disruptions to normal operations.
• Business continuity planning is a methodology for ensuring that a business has the processes in place to maintain critical functions.
• Business continuity planning involves assembling a team, assessing risks, identifying priority operations, and ensuring that a disaster recovery plan is in place that can bring critical IT infrastructure and data back online in a timely manner.
• Business continuity isn’t a one-and-done proposition. The plan has to be practiced and tested regularly so people are familiar with their responsibilities and gaps in the plan can be identified and closed.
• A new generation of cloud computing, containerization in particular, has made business continuity and disaster recovery more efficient and cost-effective than even 10 years ago.

Businesses typically adopt strategies to thwart existential threats such as established competitors, market entrants, sudden changes in customer behavior or tastes, and technological change.

However, another threat that’s more difficult to plan for is an unexpected, usually temporary event that makes it difficult or impossible for the business to continue operating as usual. Natural events such as hurricanes and prolonged heat waves can result in a loss of the electric power used to run facilities or critical IT services. Criminal entities or nation-states can interrupt IT operations or hold data for ransom. Other types of events, such as the unexpected death or departure of key personnel, supply chain disruptions due to war or labor strikes, and consumer boycotts, are equally difficult to plan for.

Successful companies therefore develop business continuity plans to provide a template for how managers and other employees should react should such extraordinary events occur.

On the flip side, companies that don’t have business continuity plans face significant peril. Even accounting for variables such as the industry, company size, and business type, downtime of an organization’s online presence alone can cost it between US$2,300 and US$9,000 per minute—and that doesn’t account for the cost of damage to its reputation and business relationships.

Most businesses can withstand slowing or halting their business activities for a short period of time, although banks, utilities, healthcare providers, and companies in some other industries aren’t afforded this luxury and must follow statutory requirements and ensure they can resume normal operations almost immediately following a disruption.

In most cases, irrespective of regulatory requirements, businesses can ill afford a prolonged disruption to their activities because even the most patient customers will eventually find alternative vendors. In fact, an extended downtime event at a competitor can present an opportunity for others in the sector to gain market share.

When planning for business continuity, organizations should also consider partners, vendors, and sensitive supply chains, where outages could have irreparable cascading downstream effects.

In its simplest terms, business continuity is the idea that an organization will continue operations in spite of disasters, events, nefarious acts, or other calamities that temporarily interrupt the ordinary course of business. It includes the following:

• Assessing functions such as production, customer service, sales, and marketing and ranking them by order of priority. In an emergency, your organization may not be able to get all its functions up and running immediately, so knowing which ones are most critical to its success is crucial to surviving the first minutes, hours, and days.
• Assessing key suppliers and service providers for their adaptability and flexibility. Ensure that they have their own business continuity plans, and in the case of IT providers, that they have redundancy, data replication, and other disaster recovery processes in place to ensure your business won’t suffer from disruptions to their operations.
• Ensuring that the business complies with relevant local, national, and international standards; this is most important in the finance, healthcare, and utility sectors.

At its most basic, a business continuity plan (BCP) is the simple acknowledgement by leadership that unforeseen disruptive events, often outside the organization’s control, will inevitably occur and that they should take steps to ensure the company will be able to continue doing business, even if in a limited capacity for a short period of time.

A BCP must include the disaster recovery (DR) plan, which, as its name suggests, is a framework for recovering systems and, most importantly, data after an unexpected outage. Events that can cause such an outage include hurricanes or tornadoes that knock out power or make travel to corporate offices impossible, armed conflicts that disrupt supply chains, cyberattacks that render systems inoperable, and global pandemics that force people to work from home. But the most common cause of disaster is human error, such as an employee unwittingly falling for a phishing scam or a database administrator who doesn’t get around to applying a software patch until after the system is compromised.

And while it’s true that future events are impossible to predict, failing to prepare for them would be foolhardy—and against laws and regulations governing many industries. As Dwight D. Eisenhower, the former US president and supreme allied commander in Europe during World War II, noted: “Plans are worthless, but planning is everything.”

In other words, unexpected events can make the details of many plans irrelevant or anachronistic, but the very process of planning helps ready an organization for whatever may come next. Eisenhower also said of planning: “If you haven’t been planning you can’t start to work, intelligently at least.”

Still, DR is integral to but not the only key component of an effective BCP. A comprehensive BCP should include the following elements:

• Business impact analysis. Determine which functions and processes are critical to the organization’s survival, and understand the impact if they were to be disrupted. This analysis should be continuous, but it’s especially important when the business expands into new product markets or geographic areas and when it adds core technologies such as a new data center or new cloud infrastructure. For example, a business with key operations in areas hit frequently by tropical storms should consider building or leasing facilities in areas outside a typical storm’s path.
• Communications plan. Establish clear communication channels for internal and external stakeholders to provide timely and accurate information during a crisis.
• Employee well-being and safety. Plan for remote work capabilities, and prioritize the health and safety of employees and their families over other considerations.
• Risk assessment and management. Assess how key customers, suppliers, or other partners on which the business depends might react to sudden business disruptions, how supply chains might be affected, which legal issues might arise, and what exposure the organization has to natural disasters and other disruptions.
• Supply chain resilience. Develop strategies to manage supply chain risk, including diversifying suppliers and sourcing options wherever possible. Consider a scenario where the business has to relocate to one or more secondary locations.
• Training and awareness. Regularly train employees on their roles in the event of a disaster or other major business disruption so they’re comfortable with the procedures and protocols they should follow.

Business continuity planning is essential to the survival of an organization in the event of a natural disaster or other disruption to the normal course of business. Indeed, about 25% of businesses don’t reopen after disasters, according to the US Federal Emergency Management Agency . Businesses should take the following steps to build an effective BCP:

• Identify a business continuity manager (BCM) and make it clear that the BCM has the full support of senior leaders. At large companies, the BCM often reports to the chief financial officer.
• The BCM should assemble a team representing key business functions, such as manufacturing, sales, customer service, IT, operations, human resources, and marketing.
• This team then works to identify areas of the business that are critical to ongoing operations, such as IT, telecommunications infrastructure, building management, vendor management, and payroll, as well as customers that generate significant amounts of revenue. Typically, businesses peg their continuity plans to two metrics: a recovery time objective (RTO) and recovery point objective (RPO). The RTO is the maximum length of time it should take to bring critical IT systems back online. The RPO is how much data the business can afford to lose before it’s harmed beyond the determined acceptable limits.
• Create a list of key stakeholders, including their full contact information and areas of responsibility. The BCM should ensure that physical copies of the list are easily accessible in a number of specified locations. In other words, don’t assume digital versions of the list, or anything else, will be available during a disruption.
• Determine which business areas have priority in the event of a disruption and whether current deployments allow for recovery within the stated RTO time frame. Does a business unit or line-of-business team require a simple backup, data replication to a secondary site, or real-time data protection and recovery? For example, if it’s determined that the business can’t tolerate the loss of an ecommerce site for more than an hour but the current deployment of that site would require a recovery time of four hours, IT may need to re-architect the site or find a new provider. Additionally, acknowledge which risks the business is willing to accept because hedging them would be too expensive, and offset them in some other way, such as by purchasing an insurance policy.
• Create communications plans for the business as a whole and for each functional area. Make sure key stakeholders are aware of these plans and can access them in the event of a disruption.
• Identify locations, including home offices, that could be used as temporary worksites if the main offices are inaccessible for long periods of time. Plan to make critical data and applications available as quickly as possible in those locations.
• Vet key suppliers and service providers to ensure they have their own BCPs in place that protect your business should they encounter a significant disruption.
• Practice the plan by walking all stakeholders through the steps that must be taken in the event of a disruption. Set up a schedule to test these plans at least once a year to identify and control for changes among suppliers, personnel, or facilities.

Finally, experts advise making recovery operations as automated as possible, allowing stakeholders and workers to focus on the overall business continuity plan. One example is using failover systems that automatically switch to backup servers or networks if the primary ones fail. Automation increases the chances of a positive, predictable outcome.

Business continuity plans are only as good as the habits of the people who use them. While predicting an actual disaster is near impossible, it’s entirely possible to simulate a disruptive event so staff can practice the actions they’ll likely have to perform. Before any testing can occur, stakeholders need to have seen and assimilated the BCP.

Tests should evaluate key elements of the plan, including reaction times to power outages and IT failures, the viability of both internal and external communications systems, and alert and activation procedures for key personnel.

Testing not only familiarizes people with their responsibilities in the event of a disruption, but it also helps identify plan gaps or flaws so they can be addressed before an actual emergency.

Best practices for this type of testing include the following:

• Tabletop testing. This involves bringing key stakeholders into a physical or virtual conference room, describing a disruptive event, and then asking each of them to list the actions they would take in accordance with the BCP they will have already read.
• Walk-through testing. Also known as a mock recovery test, this is a more comprehensive version of the tabletop exercise. In this test, employees physically walk through the steps they would take in the event of a disruption. For example, facilities management staff would demonstrate how they would ensure that backup generators were functioning, and someone in IT would use the contact information document to get in touch with your data center or cloud service provider.
• Third-party testing services. Outside vendors test how prepared your organization’s staff and key stakeholders are to react to simulated disruptions, including ransomware demands and other nefarious acts. Firms that specialize in cybersecurity can test employees to help ensure they don’t fall for phishing or other psychological tricks that can result in breaches to IT systems.

BCMs should conduct tests at least annually and establish a format for stakeholders to share and review the results.

Business continuity plans in certain industries—notably financial services, utilities, and healthcare—are subject to local, national, and/or international standards. In fact, more than 120 business continuity management regulations apply to a variety of industries, according to DRI International , a nonprofit disaster recovery consultancy. These include Security and Exchange Commission, Financial Industry Regulatory Authority, and Sarbanes-Oxley regulations in the United States as well as the BASEL III international regulatory framework for banks and the International Organization for Standardization’s ISO 22301.

Other business continuity standards include the National Institute of Standards and Technology’s SP 800-34 and 24762 and the US National Fire Protection Association’s NFPA 1600 standard for continuity, emergency, and crisis management. More general business continuity regulations include the EU’s General Data Protection Regulation, which, because it governs the storage and dissemination of data, is also relevant to business continuity.

Business continuity and disaster recovery are closely related. Both are organizational plans for surviving and quickly recovering from a potentially catastrophic business disruption, and both are also closely linked to IT, given businesses’ reliance on IT infrastructure and applications.

To cite just one example of how dependent all businesses have become on IT, most professional sports venues in the United States no longer accept cash payments, meaning that computerized point-of-sale systems need to be operational for them to sell food, beverages, gear, and other goods.

Business Continuity vs. Disaster Recovery

ISO 22301 defines business continuity as “documented procedures that guide organizations to respond, recover, resume, and restore to a pre-defined level of operations following disruption.” Disaster recovery is a subset of business continuity that involves restoring IT services, incrementally if necessary. A key way that business continuity differs from DR is that business continuity accounts for all business interruptions, including those that are planned.

Business continuity is contingent on a wide variety of factors, including the industry in which an organization operates and the nature of the disruption itself. But in the Information Age, almost all business continuity depends on some level of IT functionality. It’s therefore crucial for companies to make certain that they have appropriate levels of redundant infrastructure and data replication in place, not just to support the ordinary course of business but also to ensure the business can operate efficiently enough during a disruptive event.

The shorter the RTOs and RPOs, the better for continuity. However, the cost of achieving any RTO or RPO goes up as each objective becomes shorter. Architectural choices can help. Business leaders should consider using cloud computing and, optimally, containers to further isolate critical data from systems that have been disrupted. They should also look for cloud service providers with geographically disparate failover facilities.

One of the advantages of cloud computing from a business continuity perspective is what’s called “pilot light deployments,” where secondary sites or copies of corporate workloads can be as small as a single virtual machine (VM) or container. In the case of a failover, that single VM or container can, if needed, kick off an automated process that lets your organization spin up the rest of the infrastructure. And by using a pilot light deployment, organizations need only pay for that single resource rather than replicating an entire system.

Another strategy is the so-called “blue-green” architecture, where instead of having four to six redundant environments for development and testing and a separate one for production deployment, an organization deploys only two redundant, distributed environments. Let’s say the “blue” environment is production and the “green” is development and testing. When development is completed, the “green” environment becomes the primary production environment, and the “blue” environment is used for development, testing, and disaster recovery. This cycle then repeats itself.

Oracle makes it simpler and more affordable to develop a holistic business continuity plan. Because Oracle Cloud Infrastructure (OCI) was developed later than other hyperscale clouds, it was built for better efficiency and reliability, lower latency, and superior flexibility compared with competing clouds. In addition to containers, OCI has flexible virtual machines, which means businesses can buy only as much compute power as they need. Other providers offer less flexibility, requiring customers to overprovision their instances, costing them more money. OCI has multiple geographically separated cloud regions in many countries, enabling customers to remain compliant with data sovereignty regulations while still having disparate locations for the purposes of business continuity.

Based on decades of development experience and real-world customer feedback, Oracle has developed best practices called Oracle Maximum Availability Architecture (MAA) . Oracle MAA provides the blueprint for implementing high availability, scalability, disaster recovery, and data protection solutions in Oracle Database environments.

The Oracle MAA best practices, maintained by a team of Oracle developers, continually validate the integrated use of Oracle Database High Availability features such as Oracle Real Application Clusters and Oracle Data Guard using chaos engineering techniques and other testing methodologies.

Oracle MAA is further extended with the Oracle Cloud Infrastructure Full Stack Disaster Recovery service. OCI Full Stack Disaster Recovery orchestrates the transition of compute, databases, and applications between OCI regions from around the globe with a single click. Customers can automate the steps needed to recover one or more business systems without redesigning or re-architecting existing infrastructure, databases, or applications and without needing specialized management or conversion servers.

Moreover, Oracle Autonomous Database and Oracle Exadata Database Service have redundancy built in, which means customers don’t pay extra for data replication within the same availability zone.

The expectations for business continuity have changed as the technology landscape has evolved. For example, most businesses used to think about RTOs in terms of so-called tier 1 applications, but less expensive cloud computing options, such as pilot lights, mean that organizations can afford to create business continuity plans for all their applications.

Cloud is key to a successful—and affordable—business continuity strategy. Learn why.

What are the 4 pillars of business continuity?

At its most basic, business continuity consists of assembling a team focused on business continuity, assessing which areas of the business are most at risk during a disruptive event, creating a plan for maintaining operations at minimally viable levels, and then rehearsing and testing that plan on a regular basis.

What’s the difference between business continuity and disaster recovery?

Business continuity is an organizational approach to ensuring that an organization can continue operating in some capacity through any disruption, planned or not, while disaster recovery focuses on bringing IT systems back up.

Why is having a BCP important?

Organizations that don’t have updated business continuity plans are at greater risk than those that do. At worst, they may permanently go out of business due to a significant unexpected disruption to normal operations that drives customers to competitors, loses data, and proves expensive to fix.

Artificial intelligence in strategy

Can machines automate strategy development? The short answer is no. However, there are numerous aspects of strategists’ work where AI and advanced analytics tools can already bring enormous value. Yuval Atsmon is a senior partner who leads the new McKinsey Center for Strategy Innovation, which studies ways new technologies can augment the timeless principles of strategy. In this episode of the Inside the Strategy Room podcast, he explains how artificial intelligence is already transforming strategy and what’s on the horizon. This is an edited transcript of the discussion. For more conversations on the strategy issues that matter, follow the series on your preferred podcast platform .

Joanna Pachner: What does artificial intelligence mean in the context of strategy?

Yuval Atsmon: When people talk about artificial intelligence, they include everything to do with analytics, automation, and data analysis. Marvin Minsky, the pioneer of artificial intelligence research in the 1960s, talked about AI as a “suitcase word”—a term into which you can stuff whatever you want—and that still seems to be the case. We are comfortable with that because we think companies should use all the capabilities of more traditional analysis while increasing automation in strategy that can free up management or analyst time and, gradually, introducing tools that can augment human thinking.

Joanna Pachner: AI has been embraced by many business functions, but strategy seems to be largely immune to its charms. Why do you think that is?

Subscribe to the Inside the Strategy Room podcast

Yuval Atsmon: You’re right about the limited adoption. Only 7 percent of respondents to our survey about the use of AI say they use it in strategy or even financial planning, whereas in areas like marketing, supply chain, and service operations, it’s 25 or 30 percent. One reason adoption is lagging is that strategy is one of the most integrative conceptual practices. When executives think about strategy automation, many are looking too far ahead—at AI capabilities that would decide, in place of the business leader, what the right strategy is. They are missing opportunities to use AI in the building blocks of strategy that could significantly improve outcomes.

I like to use the analogy to virtual assistants. Many of us use Alexa or Siri but very few people use these tools to do more than dictate a text message or shut off the lights. We don’t feel comfortable with the technology’s ability to understand the context in more sophisticated applications. AI in strategy is similar: it’s hard for AI to know everything an executive knows, but it can help executives with certain tasks.

When executives think about strategy automation, many are looking too far ahead—at AI deciding the right strategy. They are missing opportunities to use AI in the building blocks of strategy.

Joanna Pachner: What kind of tasks can AI help strategists execute today?

Yuval Atsmon: We talk about six stages of AI development. The earliest is simple analytics, which we refer to as descriptive intelligence. Companies use dashboards for competitive analysis or to study performance in different parts of the business that are automatically updated. Some have interactive capabilities for refinement and testing.

The second level is diagnostic intelligence, which is the ability to look backward at the business and understand root causes and drivers of performance. The level after that is predictive intelligence: being able to anticipate certain scenarios or options and the value of things in the future based on momentum from the past as well as signals picked in the market. Both diagnostics and prediction are areas that AI can greatly improve today. The tools can augment executives’ analysis and become areas where you develop capabilities. For example, on diagnostic intelligence, you can organize your portfolio into segments to understand granularly where performance is coming from and do it in a much more continuous way than analysts could. You can try 20 different ways in an hour versus deploying one hundred analysts to tackle the problem.

Predictive AI is both more difficult and more risky. Executives shouldn’t fully rely on predictive AI, but it provides another systematic viewpoint in the room. Because strategic decisions have significant consequences, a key consideration is to use AI transparently in the sense of understanding why it is making a certain prediction and what extrapolations it is making from which information. You can then assess if you trust the prediction or not. You can even use AI to track the evolution of the assumptions for that prediction.

Those are the levels available today. The next three levels will take time to develop. There are some early examples of AI advising actions for executives’ consideration that would be value-creating based on the analysis. From there, you go to delegating certain decision authority to AI, with constraints and supervision. Eventually, there is the point where fully autonomous AI analyzes and decides with no human interaction.

Because strategic decisions have significant consequences, you need to understand why AI is making a certain prediction and what extrapolations it’s making from which information.

Joanna Pachner: What kind of businesses or industries could gain the greatest benefits from embracing AI at its current level of sophistication?

Yuval Atsmon: Every business probably has some opportunity to use AI more than it does today. The first thing to look at is the availability of data. Do you have performance data that can be organized in a systematic way? Companies that have deep data on their portfolios down to business line, SKU, inventory, and raw ingredients have the biggest opportunities to use machines to gain granular insights that humans could not.

Companies whose strategies rely on a few big decisions with limited data would get less from AI. Likewise, those facing a lot of volatility and vulnerability to external events would benefit less than companies with controlled and systematic portfolios, although they could deploy AI to better predict those external events and identify what they can and cannot control.

Third, the velocity of decisions matters. Most companies develop strategies every three to five years, which then become annual budgets. If you think about strategy in that way, the role of AI is relatively limited other than potentially accelerating analyses that are inputs into the strategy. However, some companies regularly revisit big decisions they made based on assumptions about the world that may have since changed, affecting the projected ROI of initiatives. Such shifts would affect how you deploy talent and executive time, how you spend money and focus sales efforts, and AI can be valuable in guiding that. The value of AI is even bigger when you can make decisions close to the time of deploying resources, because AI can signal that your previous assumptions have changed from when you made your plan.

Joanna Pachner: Can you provide any examples of companies employing AI to address specific strategic challenges?

Yuval Atsmon: Some of the most innovative users of AI, not coincidentally, are AI- and digital-native companies. Some of these companies have seen massive benefits from AI and have increased its usage in other areas of the business. One mobility player adjusts its financial planning based on pricing patterns it observes in the market. Its business has relatively high flexibility to demand but less so to supply, so the company uses AI to continuously signal back when pricing dynamics are trending in a way that would affect profitability or where demand is rising. This allows the company to quickly react to create more capacity because its profitability is highly sensitive to keeping demand and supply in equilibrium.

Joanna Pachner: Given how quickly things change today, doesn’t AI seem to be more a tactical than a strategic tool, providing time-sensitive input on isolated elements of strategy?

Yuval Atsmon: It’s interesting that you make the distinction between strategic and tactical. Of course, every decision can be broken down into smaller ones, and where AI can be affordably used in strategy today is for building blocks of the strategy. It might feel tactical, but it can make a massive difference. One of the world’s leading investment firms, for example, has started to use AI to scan for certain patterns rather than scanning individual companies directly. AI looks for consumer mobile usage that suggests a company’s technology is catching on quickly, giving the firm an opportunity to invest in that company before others do. That created a significant strategic edge for them, even though the tool itself may be relatively tactical.

Joanna Pachner: McKinsey has written a lot about cognitive biases  and social dynamics that can skew decision making. Can AI help with these challenges?

Yuval Atsmon: When we talk to executives about using AI in strategy development, the first reaction we get is, “Those are really big decisions; what if AI gets them wrong?” The first answer is that humans also get them wrong—a lot. [Amos] Tversky, [Daniel] Kahneman, and others have proven that some of those errors are systemic, observable, and predictable. The first thing AI can do is spot situations likely to give rise to biases. For example, imagine that AI is listening in on a strategy session where the CEO proposes something and everyone says “Aye” without debate and discussion. AI could inform the room, “We might have a sunflower bias here,” which could trigger more conversation and remind the CEO that it’s in their own interest to encourage some devil’s advocacy.

We also often see confirmation bias, where people focus their analysis on proving the wisdom of what they already want to do, as opposed to looking for a fact-based reality. Just having AI perform a default analysis that doesn’t aim to satisfy the boss is useful, and the team can then try to understand why that is different than the management hypothesis, triggering a much richer debate.

In terms of social dynamics, agency problems can create conflicts of interest. Every business unit [BU] leader thinks that their BU should get the most resources and will deliver the most value, or at least they feel they should advocate for their business. AI provides a neutral way based on systematic data to manage those debates. It’s also useful for executives with decision authority, since we all know that short-term pressures and the need to make the quarterly and annual numbers lead people to make different decisions on the 31st of December than they do on January 1st or October 1st. Like the story of Ulysses and the sirens, you can use AI to remind you that you wanted something different three months earlier. The CEO still decides; AI can just provide that extra nudge.

Joanna Pachner: It’s like you have Spock next to you, who is dispassionate and purely analytical.

Yuval Atsmon: That is not a bad analogy—for Star Trek fans anyway.

Joanna Pachner: Do you have a favorite application of AI in strategy?

Yuval Atsmon: I have worked a lot on resource allocation, and one of the challenges, which we call the hockey stick phenomenon, is that executives are always overly optimistic about what will happen. They know that resource allocation will inevitably be defined by what you believe about the future, not necessarily by past performance. AI can provide an objective prediction of performance starting from a default momentum case: based on everything that happened in the past and some indicators about the future, what is the forecast of performance if we do nothing? This is before we say, “But I will hire these people and develop this new product and improve my marketing”— things that every executive thinks will help them overdeliver relative to the past. The neutral momentum case, which AI can calculate in a cold, Spock-like manner, can change the dynamics of the resource allocation discussion. It’s a form of predictive intelligence accessible today and while it’s not meant to be definitive, it provides a basis for better decisions.

Joanna Pachner: Do you see access to technology talent as one of the obstacles to the adoption of AI in strategy, especially at large companies?

Yuval Atsmon: I would make a distinction. If you mean machine-learning and data science talent or software engineers who build the digital tools, they are definitely not easy to get. However, companies can increasingly use platforms that provide access to AI tools and require less from individual companies. Also, this domain of strategy is exciting—it’s cutting-edge, so it’s probably easier to get technology talent for that than it might be for manufacturing work.

The bigger challenge, ironically, is finding strategists or people with business expertise to contribute to the effort. You will not solve strategy problems with AI without the involvement of people who understand the customer experience and what you are trying to achieve. Those who know best, like senior executives, don’t have time to be product managers for the AI team. An even bigger constraint is that, in some cases, you are asking people to get involved in an initiative that may make their jobs less important. There could be plenty of opportunities for incorpo­rating AI into existing jobs, but it’s something companies need to reflect on. The best approach may be to create a digital factory where a different team tests and builds AI applications, with oversight from senior stakeholders.

The big challenge is finding strategists to contribute to the AI effort. You are asking people to get involved in an initiative that may make their jobs less important.

Joanna Pachner: Do you think this worry about job security and the potential that AI will automate strategy is realistic?

Yuval Atsmon: The question of whether AI will replace human judgment and put humanity out of its job is a big one that I would leave for other experts.

The pertinent question is shorter-term automation. Because of its complexity, strategy would be one of the later domains to be affected by automation, but we are seeing it in many other domains. However, the trend for more than two hundred years has been that automation creates new jobs, although ones requiring different skills. That doesn’t take away the fear some people have of a machine exposing their mistakes or doing their job better than they do it.

Joanna Pachner: We recently published an article about strategic courage in an age of volatility  that talked about three types of edge business leaders need to develop. One of them is an edge in insights. Do you think AI has a role to play in furnishing a proprietary insight edge?

Yuval Atsmon: One of the challenges most strategists face is the overwhelming complexity of the world we operate in—the number of unknowns, the information overload. At one level, it may seem that AI will provide another layer of complexity. In reality, it can be a sharp knife that cuts through some of the clutter. The question to ask is, Can AI simplify my life by giving me sharper, more timely insights more easily?

Joanna Pachner: You have been working in strategy for a long time. What sparked your interest in exploring this intersection of strategy and new technology?

Yuval Atsmon: I have always been intrigued by things at the boundaries of what seems possible. Science fiction writer Arthur C. Clarke’s second law is that to discover the limits of the possible, you have to venture a little past them into the impossible, and I find that particularly alluring in this arena.

AI in strategy is in very nascent stages but could be very consequential for companies and for the profession. For a top executive, strategic decisions are the biggest way to influence the business, other than maybe building the top team, and it is amazing how little technology is leveraged in that process today. It’s conceivable that competitive advantage will increasingly rest in having executives who know how to apply AI well. In some domains, like investment, that is already happening, and the difference in returns can be staggering. I find helping companies be part of that evolution very exciting.

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