Can your business afford not to have BC planning in place?

Can your business afford not to have BC planning in place?
Can your business afford not to have BC planning in place?
Can your business afford not to have BC planning in place?

This week is Business Continuity Awareness Week, promoted by the Business Continuity Institute to raise awareness of the importance of BC and resilience planning, and this year featuring the theme of return on investment.

ROI is probably not the first thing you think about when you are planning for how you will deal with a catalogue of disaster scenarios that might affect your business. Your main concern is likely to be a preoccupation with what are the risks facing the business, how will you survive them and what you will need to do to get back to business as usual as quickly as possible. Increasingly vivid disaster scenarios such as fires, floods, snowstorms, power outages or even terrorist attacks will all loom large in your thinking.

The process you are following is the right one, identify your corporate risks, plan how you can mitigate or even prevent them and, finally, how you will recover from them if they do strike. But in all of your thinking you would also do well to try to quantify what real cost benefits these arrangements can bring to your business. If you do this properly then you will have created a solid business case to put to your C-suite to accept and implement your plans as soon as possible. You will be able to move your proposal from being important but not urgent to being both important and urgent. After all, which business does not want to start saving money as soon as possible?

So what cost benefits, or ROI, can BC planning actually bring? I would divide them into two, advance planning benefits and disaster recovery savings. Carrying out a proper, structured BC planning process can identify some real cost savings, before disaster even strikes:

  • A review of all your business processes, to assess their operational risks and the impact their disruption will cause, is very likely to identify efficiency savings in those processes. It is also likely to help mitigate some of your risks, meaning they are less likely to actually happen.
  • This risk mitigation process will save you huge amounts of money if it prevents a disruption event from actually occurring. But it will also save you money when supplier contracts are due for renegotiation, because of the increased reliability of your operations.
  • It will also save you money on your insurance premiums, because these will be based very largely on the costs that the insurance company has incurred in protecting your business in previous years. Your claims will go down and so will your future premiums.

When disaster does strike, as it surely will at some point, then you will begin to reap a second set of savings from your BC planning. The speed of your return to business as usual and the costs of your disaster recovery operations.

The better your planning, the quicker you will be back up and running and resuming your trading operations. Every hour you are not trading is an hour when your business will go to your competitors, not only today but also perhaps in the future. Once that customer has gone elsewhere, they may not come back. They need a supplier who they can rely on to be available to them.

A 2013 study by the Chartered Management Institute found that of organisations without a BC plan:

  • 55% suffered reduced revenue
  • 29% lost new business opportunities
  • 25% lost customers, as a result of a business disruption incident.

In all cases those organisations with a BC plan in place suffered fewer losses.

Work out what you take as a business in a day, work out how many customers you interact with every day and work out the cost of losing all of those customers to your competitors, not only for today but forever. Then consider whether you can afford not to have proper BC planning in place.

Rickie Sehgal