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10 Steps of a Successful Business Continuity Plan

As part of our engagements with our client organizations, we always ask about the organization’s business continuity plan. We ask this question regardless of the size of the company, or our level of engagement. Answers often sound something like this: “We’re covered!” or this: “We have a very detailed disaster/recovery plan” or our favorite: “We backup our data every night”.

As we dig deeper, our Sherpas often realize that most companies either don’t have a business continuity plan or at best have a data backup plan.

This has prompted me to write this article about the areas that an organization needs to think about when it comes to business continuity.

Step 1: Business Continuity Plan is an Operational Risk, Not an IT one.

Business Continuity Plan (BCP) is an operational risk. It effects much more than just simply the technology side of the house, and would include cross-training, rescheduling, and focusing on worst case scenarios

Step 2: Disaster Recovery Plan is a subset of a Business Continuity Plan

In our opinion, the Disaster Recovery (DR) plan is the technology subset of the business continuity plan. For example, a medium-size break and mortar print organization with several offices across the US, and running several systems including CRM and ERP platforms would not only need a DR plan, but also, need to figure out how to deliver customer online, telephonic, and manual orders should a disaster wipe out one of its print centers. In addition, should a call center be closed due to a natural disaster, would other centers have adequately trained specialists to answer the customer phone calls?

Step 3: Define Key Business Activities

We’d like to start by defining key business activities, processes, and systems within the organization. For example, production lines for manufacturing companies, systems, key resources, and important business processes. We also ask some stupid questions: What if the phones are down for more than one day? Could you continue to operate? Are the phone systems designed to relay phone calls to people who work from home?

Step 4: Define Potential Disasters

What does disaster look like in your business? The scenarios are quite different for each organization. Of course, the following categories are the most common set of business disasters:

  • Natural Disasters (earthquakes, tornados, hurricanes, etc.)
  • Architectural Disasters (Fire and Water damage)
  • Technological Disasters (servers crashing)
  • Terrorist attacks (e.g. September 11)

In addition to the above set of disasters, each organization has its own set of issues that could be potentially disastrous for the company. For example, a number of major public companies – as well as the US Federal Government – prohibit traveling of 2 of their high ranking members on the same flight as a method of insuring business continuity.

Step 5: Define the Potential Cost of the Disaster

The way to answer this question correctly is to be able to realize that there are 3 types of cost associated with each disaster (a) The unproductive time/money loss due to lack of resources; (b) revenue loss due to lack of sales; and (c) long-term loss due to customer dissatisfaction. For example, an e-commerce company whose servers have crashed will have to pay its personnel while the site is being recovered; will lose sales for the duration; would pay for online ads during this period; and would potentially lose customers as they might find the rival site and never come back. One should calculate this cost as it would directly help with the next section.

Step 6: Define an Acceptable Recovery Time

Following the above example, if e-commerce company A could potentially lose $1,000 per hour, its business continuity strategy might be quite different than e-commerce company B that is losing $75,000 per hour. In case of Company A, the company might be happy for a recovery time of several hours or days, where Company B, would like the recovery to be a matter of minutes.

Step 7: Define an Acceptable Recovery Budget

So far, we have identified disaster types, cost of each disaster, and acceptable recovery times for that disaster. But how much are we willing to pay to be prepared? Nobody really wants to pay for something that could never happen (including the cost of cross-training, re-deployment, etc.), but it is a necessity of life.

Step 8: Consider External Vendors

What if you couldn’t fulfill your products and services for a certain period of time? Could there be external vendors who could perform these services for that period to keep the customers happy? If so, start building a relationship with them and establish the criteria of working together.

Step 9: Protect Your Data!

Data is the new gold. As part of any solid BCP and DR Plan, you’d need to make sure that your data is backed up, accessible, and recoverable. As long as we know data us accessible, recoverable, and easily discoverable, we would be able to restore it or use it in the interim to support our customers. Let’s use this example: Company A uses a sophisticated ERP format. IT department backs up this data every night to a secure offsite location. A few months down the line, the ERP servers crash and we have to wait for new servers for a week. During this period, this data is not accessible which could cause a lot of issues for the company.

Alternatively, a better business continuity plan, would have dumped key data (customer, product list/cost/price, etc.) to an unsophisticated system on nightly basis, allowing users at various offices to have access to this information during the disaster period.

Step 10: Train Your Employees

And finally…. Make sure your employees know what to do in case of a disaster, whether it is natural, technological, or architectural. It’s important for them to have all steps documented in a manual and practiced those scenarios so that they could react to those conditions naturally. Such manuals should be customized for each vital set of groups, so that they’re simply focused on their specific function in case of a disaster.

In Conclusion

As you can see, organizations should be actively developing business continuity plans and should remember that these are live documents that be modified continually as business requirements, systems, and personnel change. As such, it’s very important for executives to review, update, and test the plan, and schedule training and reminders for their employees and team members, on annual basis. One hopes that such plans are never put into action, but executives should always be ready.

 


 About The Author:

Majid Abai is Managing Director of Concepts Rise, LLC. (www.ConceptsRise.com and www.RevenuesRise.com), a Technology, Revenue Growth, and Innovation Consultancy based in Los Angeles, CA, USA.

With over 30 years of experience in leading and managing US and global organizations, Mr. Abai focuses on strategy and tactical approached to innovation and rapid growth of organizations.

Majid could be reached at 424-320-0524 or via email at majid.abai@ConceptsRise.com.

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Forget Big Data! Use Smart Data To Increase Profits!

With all the hype associated with Big Data, we are often asked by our small and medium size clients of whether they could take advantage of Big Data.

We respond to our clients that when it comes to data, wisdom and smart are much more important than size. What we call ‘Smart Data’ is the information that is relevant, actionable, measurable, and concise – and often resides within the company’s databases or is easily accessible from external data stores.

We help our clients identify Smart Data within their organizations and how such data could help them impact the bottom line. You can also use Smart Data for near-immediate increase in profits and performance within your organization:

  1. Customer Targeting: Use your customer and purchasing history to develop better track of your best & worst customers, and to develop better products and services that could serve your best customers.
  2. Right Hiring: For a very limited cost, you could use smart data to help you in Right Hiring – hire the right person for the right position – within your organization.
  3. Competitive Advantage: You want to get ahead of your competition? Use the data within your databases and inexpensive external data to beat your competition.
  4. Cost Reduction: Analyze data within the ERP and other practice management systems to reduce costs, increase efficiency, and recover losses that could happen within the organization.

One last note: Smart Data starts from business. We need to know what you are trying to achieve before jumping into a technology solutions.

Big Data Poses Challenges and Oppurtunities For Retailers

Great article in eWeek about how retailers face both challenges and opportunities by utilizing Big Data. I personally rather focus on opportunities, but one can’t discard the challenges. I would love to hear your comments.

http://www.eweek.com/database/big-data-poses-challenges-opportunities-for-retailers.html

Answers to Three Big Data Question Every CEO Should Know!

There’s a great article in Forbes by David Williams dated 3/31/2014 titled: “Answers to Three Big Data Questions Every Entrepreneur Should Know”. I think it applies to CEOs and Executive of all industries. Please let me know what you think:

Answers To Three Big Data Questions Every Entrepreneur Needs To Know – Forbes

Ten Ways Companies Can Compete Using Big Data and Analytics

This morning, I read an excellent article written by Inhi Cho Suh, Vice President of Big Data, IBM – in Forbes Magazine. In a non-technical language, this article describes how companies could take advantage of Big Data and Analytics. Here is the link to the original article: Forbes Article: 5 Ways Companies Can Compete Using Big Data & Analytics

In my opinion, there should be at least 5 other ways added to this list:

1. Increase the Lifetime Value of Customer – by identifying best (and worst) customers profiles for the organization, increase targeting the best customer profiles, and fire the worst customers, and stay away from those profiles. In addition, analytics could provide new ways for increasing the length of engagement for the best customers and new ways to increase the annual revenue from each.

2. Reduce the operating costs of the company – In every business, there are ways to reduce costs and as a business grows, this waste gets bigger. Big Data and Analytics help find the areas of waste, and management would be able to reduce the risk.

3. Develop better products – Wouldn’t every company want to develop better products that are needed by their customers? What if you were able to combine the complaints, suggestions, and chatter from different internal and external resources, and prioritize the development roadmap for the product based on this information?

4. Hire employees that are more suited to your organization – Currently, there are a lot of Big Data and employee analytics companies that support hiring of the new employees and making sure that they fit the organization. I beleive that managers should look into the various products and find that suits their company. One note: These tools shouldn’t be the ONLY method for decision making, but just an additional tool for supporting this major decision.

5. Learn More About Your Competitors – Utilizing internal and external databases and sites, you can learn a lot about what your competitors are up to and define better competitive strategies to beat them.

Do you have other ideas on how Big Data and Analytics could support an organization? Please let me know!

Majid Abai

How Robots Will Change The Future Of Marketing

I am proud to say that I have been quoted in an article written by Henry DeVries and published in Forbes!

The name of the article is How Robots Will Change The Future of Marketing, and you can see it by clicking here.