Disruptions are inevitable in business. Supply chain statistics for 2021 indicate that organizations globally bear a disruption cost averaging $184 million per year, with the estimated average cost for the U.S. standing at $228 million. According to a Deloitte survey, 44% of American CFOs reported that supply chain disruptions increased costs by 5% or more, and 32% of them reported falling sales in 2021. These and other disruptions (such as increased cyberattacks) significantly impact businesses. However, having a business continuity plan supports effective risk management and fast recovery.
What is a Business Continuity Plan?
A Business Continuity Plan (BCP) helps an organization prevent and recover from potential threats and business disruptions.
Having a plan safeguards your personnel and assets, while ensuring that your organization can quickly respond and function in the event of any disruption. Business continuity planning involves accounting for the 4 Ps. These include your (1) People (staff and customers), (2) Processes (technological and others), (3) Premises and Providers, and (4) Partners.
Advantages of a Business Continuity Plan
Here are the top five reasons to implement business continuity planning in your IT strategy:
1. Lessen Operational Impact
Whether it’s a supply chain issue, a cyberattack, a natural event, or a new market entrant, it’s crucial to mitigate the impact of any disruption on your daily operations. If you lose the ability to purchase inputs, produce services, and engage your customers, then your business suffers.
It’s critical to reduce the operational impact on your company. A business continuity plan outlines the necessary actions to keep your operations running regardless of the type of disruption. The goal is to respond appropriately to threats and make fast adaptations to keep your staff working, your customer base satisfied, and your stakeholders (partners and providers) on board.
2. Safeguard Data & Stakeholders
The pandemic changed the way we work and increased the risk of cyber threats. A business continuity plan outlines the required components and data to protect your business and keep your organization operational.
Your BCP should include an inventory of backup devices and cloud services, data backup procedures, and the management of company assets. Business continuity planning promotes the implementation of robust cybersecurity measures. This move will also protect the proprietary and personal data of your staff, customers, partners, and providers.
3. Minimize Financial Impact
A disruption of any kind also has a significant and direct financial impact. For example, the average cost of IT downtime is $5,600 per minute, and the cost of a data breach can be as much as $4.24 million as of 2021. A business continuity plan would reduce your organization’s downtime and minimize the disruption caused by any threat. Most BCPs include insuring against adverse events and reducing recovery costs.
4. Preserve Your Reputation
Adverse events such as a data breach can impact your organization’s reputation. These events cause your internal and external stakeholders to doubt the efficacy of your operations. Creating a business continuity plan sets the foundation for strong communication in the face of any threat.
A Business Continuity Plan ensures that your leadership team can quickly re-establish a state of order despite the chaos of a disruptive event and maintain trust with all internal and external stakeholders.
Your business continuity plan should focus on a chain-of-command for delegations of responsibility. It should also include reliable channels prioritized to communicate with your employees, partners, and customers to encourage collaboration and service.
5. Facilitate Quick Recovery
Studies indicate that 60% of small businesses close their doors within six months of a significant cyberattack. According to a recent survey, 47% of small business respondents indicated that supply chain delays forced them to increase prices, 46% could not purchase new inventory, and 40% could not fulfill customer orders.
Also, 66% reported either a decline or stagnation in their business in the past month. Business continuity planning will help you position your company with the right mix of strategies to ensure that your doors remain open regardless of the challenges encountered.
Designing Your Business Continuity Plan
Net Friends is a leading Managed Services Provider offering a diverse range of managed IT services. Our team of experts will help you perform a detailed risk assessment and business impact analysis to create a business continuity plan customized to your operations. We are your trusted IT partner, so contact us today to safeguard your company against disruptions and promote business resilience and growth.
WHAT TO READ NEXT: