You may have seen statistics like “40% of businesses fail within 18 months of a disaster.” I can’t find anything to back that up but even if they don’t fail, no business wants to account for the revenue losses and personnel and personal costs of not being prepared for a disaster. The effects of a disaster or even an extended weather event don’t have to be catastrophic to warrant a little investment in preparation.
Most organizations have thought about IT policies and protecting their electronic information. Many have not thought enough about their people, facilities and daily operations. Most businesses have not developed a formal plan to collect their contingency plans in a single place.
Preparing a Business Continuity Plan will require some investment of staff time. For many businesses, time is money and spending time on an internal plan means lost billable time. Management reasonably focuses on Return on Investment (ROI).
Q. How do you justify the expense?
A. Compare the expense to the value of the inherent risk of continuing without a plan. What do I mean by that? Start by thinking about the cost for the risk you are carrying and go from there. Here are some examples you can use:
Lost billable hours:
- What is the cost of a single lost billable hour for your organization? Simply multiply the average billing rate by the number of people billing. Losing a single hour yields a 2.5% reduction in a single week’s productivity (using forty hours).
- Losing a whole day is 20% of the week. This is starting to add up to real costs that will show on the bottom line.
- You don’t need many lost hours for the whole company to justify the time spent by a small and focused group to mitigate the disaster ahead of time.
Lost equipment and infrastructure:
- An office fire could either destroy your company or just be a hiccup, depending on how well you have planned ahead.
- What does your insurance cover? Better check on that…
- Are you renting furnished space or do you owe money on your furnishings?
- How hard would it be to set up a new office next week? Make a list of all the things you would need. That’s a great start and not too hard to do when you have an existing office to do it in.
Critical information Storage and Retrieval
- Review your policies on information storage and backup. What could possibly go wrong?
- What are people keeping on local drives not backed on media that leaves the office at night?
- Who is checking to make sure the backup system is actually working?
- Will you lose just today’s information if there is a fire tonight? Or more?
- What about the hard copies of plans, redline as-built edits of construction documents, and financial records?
The message of this post is that once you start asking this type of question, it should become obvious that you need a plan. Your Business Continuity Plan is the focal point for driving this effort and collecting the information together.
Q. What should you do now?
A. See if your company or organization has a Continuity Plan. It might be called a Business Continuity Plan or a Continuity of Operations Plan. Check with your Office Manager, Safety Committee or CEO. If you don’t have one, suggest developing one.
Up next: What should be in the plan? We’ll provide an outline based on industry standards and some links to templates you can use.