A guide to creating an effective business continuity plan

An organization’s business continuity plan outlines procedures and instructions it must follow in the event of a disaster, such as a fire, flood, or cyberattack. Find out how you can create a plan that will give your business the best chance of surviving a disaster

Almost every business has been affected by the tumultuous events of the past several years. As the number of extreme weather events, cyberattacks, and geopolitical conflicts increases, business leaders are bracing themselves for increasingly more frequent impactful incidents their organizations will have to deal with.

The PwC 2023 Global Crisis and Resilience Survey found that 96% of 1,812 business leaders reported disruption in the past two years, and 76% reported that their most serious disruption had a moderate to high impact.

The fact that 89% of executives list resilience as a top strategic priority should come as no surprise.

One of those foundational elements is a solid business continuity plan in their organization’s ability to respond to disruptions, with PwC noting that its research shows that too many organizations “are lacking the foundational elements of resilience they need to be successful.”

One of those foundational elements is a solid business continuity plan.

“The mindset of every business must be that they will face a disaster, and every business needs a strategy to handle all the possible scenarios,” says Goh Ser Yoong, head of compliance at Advance.AI and member of ISACA’s Emerging Trends Working Group.

By providing guidelines about what tasks should be performed in what order to keep the company operating during a disaster, the business continuity plan gives the organization the best chance at navigating a disaster successfully.

If such a plan does not exist, the organization may take longer than necessary to recover from an incident – or may not be able to recover at all.

How does a business continuity plan work?

A business continuity plan (BCP) is a strategic playbook created to help an organization maintain or quickly resume business functions in the face of disruption, whether the disruption is caused due to a natural disaster, civil unrest, cyberattack, or any other threat to business operations.

Business continuity plans outline procedures and instructions the organization must follow during such an event in order to minimize downtime, covering business processes, assets, human resources, and business partners.

Business continuity plans are different from disaster recovery plans, which are designed to restore IT infrastructure and operations following a crisis. The disaster recovery plan is an integral part of an organization’s overall strategy to ensure business continuity, and the business continuity plan should inform the disaster recovery plan’s action items. The strong connection between the two leads to their frequent association and the common abbreviation as BCDR.

Business continuity planning: why it is important

Your customer base is vital to the success of your business, regardless of whether you run a small or large organization. There is no better time to test your ability to do so than after experiencing an adverse event.

Several disaster recovery solutions are available because restoring IT is so important to most companies. IT can implement those solutions for you. What about the other aspects of your business? The success of your company depends on the quality of your people and the efficiency of your processes. Managing incidents effectively can positively impact your company’s reputation and market value, as well as increase customer confidence.

Furthermore, consumer and regulatory expectations for enterprise security and continuity are rising. Thus, organizations must prioritize continuity planning in order to prevent not only business losses, but also financial, legal, reputational, and regulatory repercussions.

As an example, the risk of an organization’s “license to operate” being revoked by a regulator or having conditions applied (retrospectively or prospectively) can adversely affect its market value.

A business continuity plan should be developed (and updated)

It involves multiple essential steps to build or update a business continuity plan, regardless of whether it is the organization’s first plan or an update to an existing one.

Assess criticality and vulnerability of business processes: Business continuity planning “starts with understanding what’s important to the business,” says Joe Nocera, principal at PwC.

Business continuity planning starts with understanding what is most important to the organization, according to Joe Nocera, a principal at PwC’s cyber risk and regulatory practicea day, a few days, or a week.

Todd Renner, senior managing director at FTI Consulting in the cybersecurity practice, says this step is about protecting and maintaining systems.

Today’s hybrid workplace, the modern IT environment, and the dependence on business partners and third-party providers for critical processes make this assessment more complex than ever before.

As a result of this complexity, Goh says a thorough assessment must include both key processes as well as supporting components, including IT systems, networks, people, and outside vendors.

A business impact analysis is essentially what this is.

Build a business continuity plan by determining your organization’s recovery time objective (RTO) and recovery point objective (RPO), which are the target amount of time between the point of failure and the resumption of operations. The recovery point objective (RPO) is the maximum amount of data loss that an organization can accept.

Depending on the nature of the organization’s business, industry, regulatory requirements, and other operational factors, each has its own RTO and RPOarts of a business can have different RTOs and RPOs, which executives need to establish, Nocera says.

“Every aspect of the business says everything they do is important when you meet with them; no one wants to say their part is less important, but you have to have those challenging conversations and make decisions about what is actually critical to the business and business continuity.”

Provide details about the steps, roles, and responsibilities involved in continuity: Following that, business leaders should use the RTO and the RPO, along with the business impact analysis, to figure out which tasks must be performed, by whom, and in what order to ensure business continuity.

It involves taking the key components of your analysis and creating a plan that defines roles and responsibilitiesy on how you’re going to keep the company up and running,” Renner explains.

A checklist for business continuity planning includes supplies and equipment, data backup locations, and backup procedures. where the plan is available and who should have it, and contact information for emergency responders, key personnel, and backup site providers.

An example of a business continuity planning tool is a checklist that contains information about supplies and equipment, the location of backup sites and data backups, and so one an exhaustive list of potential incidents. Rather, they should compile a list that includes likely incidents as well as representative ones so that they can create responses that have a higher likelihood of ensuring continuity even when faced with an unimagined disaster.

The tools used for continuity planning include checklists that include items such as supplies and equipment, locations of backups and backup sites, etc., according to Era.

Testing the business continuity plan is important

Simply creating a business continuity plan is insufficient for ensuring preparedness; testing and practicing are equally crucial components.

The benefits of testing and practicing are numerous, according to Renner.

First, they show whether or how well a plan will work.

Testing and practicing help prepare

Furthermore, drills assist in identifying areas of misalignment of objectives. For example, executives may have deprioritized the importance of restoring certain IT systems only to realize during a drill that they are crucial to the smooth operation of critical processes.

Test types and timing

Two to four times a year, many organizations test their business continuity plans. The frequency of tests, as well as the frequency of reviews and updates, is determined by the organization itself — its industry, its rate of innovation and transformation, the amount of turnover of key employees, and so forth.

In addition to tabletop exercises, structured walk-throughs, and simulations, test teams are usually composed of members of each functional unit and the recovery coordinator.

Usually, a tabletop exercise takes place in a conference room with the team poring over the plan, identifying gaps, and ensuring that all business units are represented.

As part of a structured walk-through, each member of the team examines his or her component of the plan in detail in order to identify weaknesses. Often, the team conducts the test with a specific disaster in mind. The structured walk-through may include drills and disaster role-playing exercises. All relevant staff should be informed of any weaknesses and a revised plan should be distributed.

It is also recommended that a full emergency evacuation drill be conducted at least once per year by some experts.

In the meantime, it is still important to conduct disaster simulation testing on an annual basis — which can be quite involved. Create an environment to simulate an actual disaster with all the necessary equipment, supplies, and personnel (including business partners and vendors) involved. In a simulation, the organization and its staff are evaluated to determine whether they are capable of performing critical business functions during an actual event.

A fresh set of eyes may detect gaps or lapses in information that experienced team members may miss during each phase of business continuity plan testing.

In the same manner, the business continuity plan should be reviewed and updated on an ongoing basis.

Rather than just a check-the-box exercise, it should be a living document.

As a result, plans become stale and are of no use when they are needed.

Gather key personnel at least once a year to review the plan and discuss any modifications that need to be made.

You should solicit feedback from staff prior to the review in order to incorporate it into the plan. Ask all departments or business units, including local branch locations, to review the plan.

In addition, a strong business continuity program requires evaluation of the organization’s response to an actual event. This allows executives and their teams to identify what went well and where improvements may be necessary.

Support and awareness of the business continuity plan

The first way to ensure your business continuity plan does not succeed is to adopt a casual attitude toward its importance. It is imperative that senior management is represented when creating and updating a business continuity plan. This means that subordinates cannot be delegated the responsibility of creating and updating the plan. Also, the plan is likely to remain viable and fresh if senior management makes it a priority by putting sufficient time into reviewing and testing it.

A key aspect of user awareness is management’s involvement. If employees are not aware of the plan, how will they be able to respond appropriately when every second counts?

Although plan distribution and training can be conducted by business unit managers or HR staff.

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