What are you missing when minimizing risk?

Few live day-to-day worrying about a disaster striking. It is not until a catastrophe strikes that we find ourselves wishing we would have been better prepared, or had somehow known this was coming. We cannot predict the future, but we can prepare for unexpectedness. Consider this, within two years after Hurricane Andrew struck in 1992, 80 percent of the affected companies that lacked a business continuity plan failed (ITAA).  In preparing a successful business continuity plan, an enhanced understanding of risk management can be gained by examining the execution of other companies’ business continuity and disaster recovery plans.

Despite countless efforts toward planning for a crisis, common pitfalls still arise that cause the business to suffer monetarily. Too often, organizations fall victim to the following mistakes:

  • Inadequate planning
  • Employees were not part of plan development or testing
  • Lack of support from executives and upper management
  • Not completing a full recovery plan (with recovery time objective, vital documents, critical systems, etc.)
  • Lack of funding for regular testing
  • Inadequate or absent business impact analysis

In fact, after a major disaster an average company will lose at least 25 percent of the daily revenue in the first six days, while over 40 percent will be lost is a disaster lasts up to 24 days (University of Texas).So where is the silver lining in all of this? Those that prepare well and thoroughly come out on top. These organizations are able to solidify their share of the market, continue to attract new customers, and promote a healthy, prosperous brand.

Consider this, following September 11, 2001, USAA fully revamped their business contingency plan. This was completed by running simulations with all employees and departments, consulting with other companies on their plans, and establishing backup data centers and work stations that were dispersed across the country. In an in-depth evaluation of their plan, they found employees were less prone to panic, and more likely to remember procedures in a time of emergency. They also felt comfortable providing suggestions toward the improvement of the plan. While this is one component of a healthy business continuity and disaster recovery plan, there are several other factors, including:

  • Customer Communication – How are you going to communicate with your customers if one of your contact centers is affected?
  • Facility Safety – How will your facilities and the data inside those facilities be protected?

There are many components that lead to a healthy business continuity and disaster recovery plan. Although the development of the plan is time consuming, the dividends are bountiful. When significant financial loss is on the line, it is hard to find a reason not to invest time and money into a business continuity plan for your company. Your customers will notice your ability to quickly bounce back after an unexpected event. Yet, if your customers’ service is hindered in any way, they will make judgements on the quality of your brand and you may lose a customer.

For example, if your operations are in California and an earthquake occurs in this location that disturbs critical areas of your regular business functions, your customers in Florida will likely not understand. This could be due to several reasons:

  • Your customers do not know about the earthquake
  • Your customers expect your company to be available 24/7/365
  • Your customers do not look past their own needs

Such undisrupted service makes for a seamless experience for your customers, while also allowing your organization to focus on bringing your operations back online.

In short, investing in a business continuity plan creates not only safeguards for your company in a time of panic, but also establishes a sense of trustworthiness and reliability for your employees and customers.