Every company is prone to disaster and needs contingency planning business continuity and recovery following any event that can disrupt operations. Read on to learn why you should have a business continuity plan for your company.
What Does Business Contingency Planning Involve?
Contingency 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 business continuity is what should be at the focal point of the 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 doing business continuity planning:
1. The Reason for Disaster Recovery Planning (drp)
Business has the possibility to face situations that can adversely impact critical business functions. If the recovery time is poor after 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. A proper business continuity plan is therefore a must for all your business processes.
2. Events that the Contingency Plan should Include
As mentioned above, to achieve business continuity, a good recovery plan should include events that might disrupt the operations. Some areas to address in this planning include but are not limited to:
- Natural Disaster – fires, hurricanes, and earthquakes.
- Crises – Threatening customers or employees, work site accidents, as well as 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 preparedness and end with suggesting measures for business recovery. The below steps therefore should help you take the entire process step by step.
- Perform a business impact analysis
- Determine the likelihood and impact of risks
- Develop a process for each item
- Look at alternatives for business continuity
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 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 business continuity planning measures for the highest scores first. For low scores, it is advised to come up with a ‘general’ recovery process.
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