Business Continuity Planning (BCP)

Asset Financing

What is business continuity planning (BCP)?

Business continuity planning (BCP) is the process involved in creating a system to prevent and recover from potential threats to a business. The plan ensures that staff and property are protected and can operate quickly in the event of a disaster. The BCP is generally designed in advance and involves the participation of key stakeholders and staff.

BCP involves defining all of the risks that can affect a company’s operations, making it an important part of the organization’s risk management strategy. Risks can include natural disasters (fire, flood or weather events) and cyber attacks. Once the risks have been identified, the plan must also include:

  • Determine how these risks will affect operations
  • Implement safeguards and procedures to mitigate risks
  • Test procedures to make sure they work
  • Review the process to make sure it is up to date

CACs are an important part of any business. Threats and disruptions mean loss of revenue and higher costs, resulting in lower profitability. And businesses can’t rely on insurance alone, because it doesn’t cover all the costs and customers who turn to the competition.

Understand business continuity planning (BCP)

Businesses are prone to a multitude of disasters ranging from minor to catastrophic. Business continuity planning is generally aimed at helping a business to continue operating in the event of major disasters such as fires. PCAs are different from a disaster recovery plan, which focuses on recovering a company’s computer system after a crisis.

Take a financial company based in a big city. He can set up a BCP by taking measures, in particular by backing up his computer and client files off site. Should anything happen to the company’s headquarters, its satellite offices would always have access to important information.

An important point to note is that BCP may not be as effective if a large part of the population is affected, as in the case of an epidemic.

Development of a business continuity plan

Many companies need to take several steps to develop a strong PCA. They include:

  • Business impact analysis: Here, the company will identify the functions and associated resources that are time sensitive. (More information below.)
  • Recovery: In this part, the company must identify and implement steps to recover critical business functions.
  • Organization: A continuity team must be created. This team will develop a plan to manage the disruption.
  • Training: The continuity team must be trained and tested. Team members should also complete exercises that review the plan and strategies.

Businesses may also find it helpful to develop a checklist that includes key details such as emergency contact information, a list of resources the continuity team may need, where backup data and other information required are hosted or stored, and other important personnel.

In addition to testing the continuity team, the company should also test the BCP itself. It must be tested several times to ensure that it can be applied to many different risk scenarios. This will help identify weaknesses in the plan which can then be identified and corrected.

For a business continuity plan to be successful, all employees, even those who are not part of the business continuity team, must be aware of the plan.

Key points to remember

  • Business Continuity Planning (BCP) is the process a business goes through to create a prevention and recovery system against potential threats such as natural disasters or cyber attacks.
  • BCP is designed to protect personnel and assets and ensure that they can operate quickly in the event of a disaster.
  • BCPs should be tested to ensure that there are no weaknesses, which can be identified and corrected.

Impact analysis on business continuity

An important part of developing a BCP is an impact analysis on business continuity. It identifies the effects of the disruption of business functions and processes. It also uses information to make decisions about recovery priorities and strategies.

FEMA provides a spreadsheet of operational and financial impacts to help perform a business continuity analysis. The worksheet must be completed by functional and process managers who know the business well. These worksheets will summarize the following:

  • The impacts – both financial and operational – that result from the loss of individual business functions and processes
  • Identify when the loss of a function or process would lead to the identified business impacts

Completing the analysis can help companies identify and prioritize the processes that have the greatest impact on the company’s financial and operational functions. The point at which they need to be recovered is generally referred to as the “recovery time objective”.

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