Contingency Planning for Business Continuity

Every company is prone to disaster and needs contingency planning to ensure business continuity following any event that can disrupt operations. Read on to learn why you should have a contingency plan for your company.

What Does Business Contingency Planning Involve?

contingency planningThe contingency planning process is all about developing responses in anticipation to various situations that are likely to impact your business. Although a lot of negative events probably come to one’s mind when we talk about situations, but taking into consideration disaster preparedness and disaster recovery is what should be at the focal point of the planning process. This should be considered when writing your business plan. If one is prepared for the disasters then he could sleep in peace. You must consider the following when writing contingency plans:



1. The Reason for Disaster Recovery Planning (drp)

Business has the possibility to face situations that can adversely impacts the operations. If the response is poor at the time of the event, it might have dramatic effect on the overall future of the business. These situations can lead to loss of customers, loss of employees, loss of data, and even loss of the business itself.

2. The Events that Should be Included in the Plan

As mentioned above, to ensure continuity of business operation, a good contingency plan or drp should include events that might disrupt the operations. Some areas to address in this planning include:

  • Natural Disasters – fires, hurricanes, and earthquakes.
  • Crises – Threatening customers or employees, work site accidents, and on the job injuries.
  • Personnel – Death of a senior manager, or staff members on strike.
  • Data Loss – Loss due to natural disasters, cyber criminal action and so on.
  • Mismanagement – Theft, accidental destruction, and neglect of critical duties.
  • Product Issues – Huge order that requires re-allocation of plant resources, or recalling a product.

3. The Process of Developing Contingency Plans

There are the steps to develop a contingency plan, which should start from disaster preparedness and end with suggesting measures for disaster recovery. The below steps therefore should help you take the entire process step by step.

  • Analyze risks
  • Determine the likelihood and impact of risks
  • Develop a process for each item
  • Look at alternatives

4. Identifying possible events that could disrupt operations in the business

Give each possible event ranking from 1 to 10. This ranking procedure should depend upon the severity of the impact of the event on business operations. For example, a natural disaster might be a 10, while fire attack at a specific location in the factory might be a 3.

The second factor to assign ranking has to do with the estimate of the likelihood of the event. It might be useful to make a chart with one representing events that take place once in 100 years, while 10 the one that can take place once a month. Multiply the impact of each event by the likelihood of occurrence to get a total score for each. Use this scoring system to rank the events, and begin working on the disaster recovery planning (drp) measures for the highest scores first. For low scores, it is advised to come up with a ‘general’ recovery process.

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