Published: 17 June 2024
Contributors: Rina Caballar, Cole Stryker
Business continuity refers to an organization’s ability to maintain critical business functions, minimize disruption and resume normal operations with minimal downtime when a crisis happens. Such crises can include cyberattacks, equipment or supply chain failures, natural disasters, power outages and other unexpected events.
Without a plan for business continuity, enterprises leave themselves vulnerable to a host of incidents. When the Covid pandemic hit in 2020, 51% of companies worldwide did not have a business continuity plan in place.1
This lack of business continuity management (BCM) can be costly. For instance, the average cost of a data breach in 2023 was USD4.45 million, according to the IBM® Cost of Data Breach Report.2 Following such a loss, companies might find it difficult to bounce back. More than 40% of businesses will not reopen after facing a disaster.3 Investing in business continuity planning can yield savings in the long run, as recovery strategies are in place even before a threat strikes.
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A business continuity plan (BCP) details the steps that an organization will follow to return to normal business functions in the event of a disaster. BCPs take an expansive approach, with a goal of preparing enterprises to face a wide range of potential threats.
While business continuity plans and disaster recovery plans are both contingency plans, they each approach crisis management differently. Where business continuity management centers on preparedness more broadly, a disaster recovery plan (DRP) focuses specifically on protecting data and IT systems as an incident happens.
BCPs are a proactive business continuity strategy to maintain business functions before, during and immediately after an interruption. Meanwhile, DRPs are a reactive strategy to effectively respond to and recover from disasters.
These two plans are often handled separately, but a coordinated approach to business continuity and disaster recovery can further strengthen an organization’s operational resilience.
When an unplanned incident happens, a business continuity plan can show the way forward and introduce structure to the response and recovery processes.
Here are a few benefits that companies who invest in creating a strong BCP can expect:
A catastrophic event can lead to disruptive downtime. Chaos ensues, and teams often scramble to get systems running again. A business continuity program can help minimize this disruption, with a crisis management plan and emergency management procedures in place to get back online in less time.
Once critical business functions are up, teams can focus on resuming normal business processes. A BCP specifies a recovery time objective, or RTO, which is the amount of time it takes to restore business processes after an unplanned incident. Implementing rigorously tested BCPs that set out a reasonable RTO can result in rapid business recovery, increasing customer, investor and stakeholder confidence.
Business disruptions can be expensive—every minute a company’s systems are down might translate to lost revenue. BCM can significantly lower the costs of recovery. For instance, organizations can invest in cybersecurity solutions like security AI and automation as part of their business continuity plan, which can lead to an average savings of USD1.76 million, according to IBM’s Cost of Data Breach Report.2 A BCP can also reduce the impact of any potential reputational fallout that might follow.
Business continuity might even be a regulatory requirement, especially in industries like healthcare and personal finance. Establishing a robust BCP is essential for enterprises operating in these areas, helping them meet compliance standards.
When it comes to business continuity planning, every organization will have its own needs. And while there’s no single framework that would fit all enterprises, here are four steps businesses can take to create an effective BCP:
A business impact analysis (BIA) is a crucial part of risk management and serves as the first step in the planning process. It involves risk assessment to evaluate various business functions and determine any possible risks, threats and vulnerabilities. BIA also entails estimating the likelihood of these events and their potential impact to business operations so organizations can prioritize accordingly.
For each event identified, companies must design an appropriate response. It’s vital for the response to include clear protocols and detailed actions to address a threat.
Different events require different levels of response. For example, when a power failure or cyberattack causes an outage, an enterprise might need to get mission-critical IT infrastructure online first and other important applications up and running later.
This step is also where technology considerations come in, especially when setting a recovery point objective (RPO). An organization’s RPO refers to the amount of data that it can afford to lose in a disaster and still recover. Depending on their RPO, businesses might look into data backup and restore tools. These tools help repair data loss, backup and disaster recovery solutions that store data off-site in a remote data center, and third-party services like disaster recovery as a service (DRaaS).
During this step, business leaders and stakeholders will designate key team members who will put the plan into action and guide response and recovery efforts. An effective BCP clearly defines each team member’s responsibilities and outlines the resources required to fulfill their roles. It also includes contact information for these team members, as well as alternative means of communication in case an outage brings down connectivity.
To prove a BCP’s robustness, organizations must put it through periodic testing and continual revisions. Training is essential to educate employees about potential threats, while frequent trial runs of realistic scenarios can help pinpoint issues and opportunities for improvement. By regularly testing and refining a business continuity plan, enterprises are as prepared as possible when an actual disaster hits.
To prove a BCP’s robustness, organizations must put it through periodic testing and continual revisions. Training is essential to educate employees about potential threats, while frequent trial runs of realistic scenarios can help pinpoint issues and opportunities for improvement. By regularly testing and refining a business continuity plan, enterprises are as prepared as possible when an actual disaster hits.
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Footnotes
1 Business responses to the COVID-19 outbreak: Survey findings (link resides outside ibm.com), Mercer, 2020
2 Cost of a Data Breach Report 2023, IBM, 2023
3 Stress-Test Your Business Continuity Management (link resides outside ibm.com), Gartner, 5 November, 2019