How To Keep Your Business Earning Money When Disaster Strikes

9 January, 2013

Businesses today have high demands from their customers. To meet these high demands businesses rely heavily on their critical business processes. Critical business processes involve the resources of technology, people, information and or facilities. Many businesses have a false belief that all these resources will be running at 100% 365 days a year. They fail to plan for a possible loss of one or more resources that adversely affect their business.
Loss of business continuity could be as simple as a key employee going on unexpected sick leave to the computer system infected with a major virus. Other examples are a flood or a fire in the office or disruption in email and cell phone systems or external suppliers failing to meet delivery covenants.
Business continuity management is a method available to the business owner that provides a mechanism to plan for the unexpected. Business continuity management has two major steps. The first step is to identify business processes that are deemed critical for the successful operation of the business. In most cases this involves the ability to deliver products, including services and to collect invoices based on the deliver of said product or services.
In order to identify the critical processes the management team must create a goal for the business for each critical area. Examples of this are; a 4 hour response to trouble calls, in stock orders received by 10 am are shipped the same day; computer systems are backed up each night so only 24 hours of data are at risk.
Once the objectives are established then the impact or a risk analysis on the business is reviewed if those processes are disrupted. For example if the computer system is down for 24 hours what is the impact on the business? If two technicians call in sick on the same day, and the promised 4 hour response time is adversely affected then how does this impact service levels and orders?
Once the impact on the business is reviewed then alternative response approaches are created and reviewed. An off site computer system back up can be created to assist if the on site back up fails. Supervisory staff is trained to handle 4 hour emergency calls if technicians are absent. Additional suppliers are in place if a main supplier fails to deliver products as promised.
Once these alternative plans are created, then we must subject each plan to a business case analysis. The cost to have a back up plan in place should be measured against the possible loss of business or customer goodwill. Then scenarios must be subjected to probability review. Is the computer system more likely to be impacted than a flood occurring in the warehouse? Are multiple suppliers used when it comes to products that carry a certain margin level or to products that are high turn over? Do we have a30 day supply of high turn over inventory located in 3rd party warehouses, in case of a fire at our main facility?
This was the case for an ice cream manufacturer. They kept a 60 day supply of ice cream products scattered in 3rd party cold stores warehouses so the business would keep running in case of a disaster. When a fire destroyed their main product facility the business kept running while management could respond to the emergency at hand. That is one of the major benefits of continuity management. The plans are focused on keeping the business running. If you are dealing with a crisis, the operation of the company can suffer. When you have a continuity plan in place, the business keeps running smoothly allowing while a sharp focus is kept on the crisis thus keeping the disruption to a minimum.
In all cases the plans are put in place and tested. The testing allows for any issues to be resolved before an actual event takes place. This is very important as during the time of an actual crisis you do not want to find out that the plan will not work. The plans should be reviewed and updated on a regular basis.Check out our video channel http://youtu.be/EmpWzz0D1II


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