Business continuity planning should be a core activity for any responsible business whether they are a large multinational or an SME. But, as this summer's floods have demonstrated, many companies are not prepared for unplanned events as they regard it as a costly, low-return exercise and, as a result, many won't survive.
Our own experiences of the floods in June clearly demonstrated to us just how vital a business continuity plan is when the unthinkable happens.
Despite the fact that we had a river running through the lower ground floor of one of our offices and all power to Sheffield had been cut, we were still able to fully restore all systems and were back at our desks for business as usual within 30 working hours.
Throughout our relatively short downtime, our business continuity plan enabled us to maintain full communications with our employees, clients and suppliers so no one had any uncertainty as to the state of play or the programme for recovery.
Flexible plans
Like any other key business strategy, business continuity plans have to involve clear lines of activity which come together to create the desired end result. They have to be flexible, to develop and grow with a business, but should be kept simple and focused, concentrating on the vital elements to getting the business up and running, such as communication, IT, key suppliers and accommodation.
First, it is essential that a risk assessment - a comprehensive view of all potential threats and their impacts - is undertaken. Disruptions come in all shapes and sizes, from minor irritants such as short-term power cuts, through to more large-scale catastrophic events such as fire, flood or even terror attacks.
The aim is to grade all potential threats, and then overwrite this as experience grows. For example, if a company is in an area prone to power cuts, upgrade the likelihood and give more attention to how to deal with it.
The risk assessment clearly details the things that will have to be restored if the worst happens. For example, if a river runs close to a client's office, advise them to locate IT servers on the upper floor.
Of course, it's impossible to get everything right, but, as in our case, recovery was achieved not by luck, but by a robust plan executed by very committed people. Our de-briefing identified changes that were required to our plan and the processes surrounding it. However, with the event behind us and recovery successfully achieved well inside our prescribed schedule, the new version of the business continuity plan now becomes far more important than the one which served us so well. That's business continuity for you; it never becomes a stationary target.
Disaster handbook
• Know the local property market
Keep in touch with local agents and know what premises are available, potentially on a short-term letting basis. Remember, you will need to fit it out as quickly as possible.
• Protect vital business elements
Computer backups are essential, but if a business is heavily documents-based, give consideration to acquiring a document management system. By scanning and storing documents on receipt, they can be backed up as part of a network backup routine.
• Take out adequate insurance
Clients in rented accommodation must ensure that the landlord is fully covered and that their insurance company is reputable. Insurance needs to cover physical assets as well as the extra costs that will arise as a result of a major event, for example, relocation costs, lost documents and so on. Business interruption insurance will provide compensation for any lost revenue during a period of downtime.
• Understand the infrastructure
All businesses evolve, adding pieces of systems or equipment. It is imperative that these are mapped and included in a business continuity plan. There is never a convenient time for disaster to strike, so someone else needs to know how everything fits together.
• Brief your key business partners
Do major suppliers know what will be expected of them and do they have a business continuity plan of their own? What are their lead times for supply, delivery, installation, or whatever else is needed to get the business going? Include these in contracts or service level agreements with them.
• Maintain ability to communicate
Maintain up-to-date directories of phone numbers of employees, clients, suppliers and emergency services.
• Circulate the plan
Make sure all key players have a copy of the plan and know their individual responsibilities. Make sure that they all have a substitute so that absence doesn't scupper the plan.
Nick Shepherd is financial director of Close Credit Management
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