The Business Case for a business continuity plan

Holdings and Co., a fintech company, has carried out extensive data and information risk assessment of their business procedures. They have policies/ processes to ensure that they satisfactorily answer all anticipated threats to the business operations. In addition to that, Holdings and Co., chief information officer, transferred other risks to an insurance company. However, they forgot to build their Business Continuity Plan (BCP).

As such, when their servers went down on a busy Christmas day, they didn’t know what to do, and they lost over one hundred thousand dollars on that particular day because their servers went down for some hours. If they had a business continuity plan, they would have come out of the disaster better and built better business processes.

Without  a  business  continuity  plan,  there  is  the  tendency  for  companies  to  lose money, run the risk of damaging their reputation and letting incidents spiral out of control. The British Petroleum oil spill in 2010 is a great example.

The oil spill significantly disrupted BP’s financial performance, and its stock price, as news continued to spread on the extent of the disaster. From late April of 2010 through June of that year, BP common stock lost more than half its value. 

BP’s  CEO,  Tony  Hayward, left  his  post  later.  The  company also suspended dividend payments  until  early  2011. Some  BP  gasoline  station owners  in  the  U.S.  reported declining sales and attributed that trend to negative publicity for  the  BP  brand  associated with the disaster.

One  can  argue  that  if  BP had a robust BCP in place, they would have covered the public relations and created the right approach towards coming out of  the  problem. The BCP plays a critical  role.

The  BCP  is  the  central document  for  all  planning concerning  business  continuation,  no  matter  what the  issue  is.  Despite  this,  the language  in  the  document should  be  flexible  enough  to allow coverage for anticipated growth  and  the  evolution  of technology.

A business impact analysis (BIA)  should  be  one  of  the first  things  performed  before drawing  a  BCP.  The BIAs help tell  planners  what  is  most important  to  the  business, ing their reputation and letting incidents spiral out of control. T he British Petroleum oil spill in 2010 is a great example. The  oil  spill  significantly disrupted  BP’s  financial  performance, and its stock price, as  news  continued  to  spread on  the  extent  of  the  disaster.  From  late  April  of  2010 through  June  of  that  year,  BP common stock lost more than concerning what has to come back  up  to  return  operations to normal.

The  BCP  would  include what types of equipment, data backups  or  supplies,  or  site locations a company needs in case  of  an  incident.  This  plan also  provides  detailed  strategies  for  maintaining  business operations  in  the  long-  and short-term outages.

For  example,  when  Holdings  and  Co.’s  servers  failed, the  BCP  would  have  directions  about  the  backups,  the emergency  contact  and  actionable  points  during  that disaster.

BCP pays attention to high availability,  which  provides capability  and  processes  so that  the  business  in  a  disaster  has  physical  facilities  or software  that  can  still  help with  specific  operations.  For example,  how  will  Holdings and  Co’s  customers  access their  account  when  there  is  a server breakdown?

One of the most challenging  things,  from  a  technical  perspective,  in  the  BCP, is  to  maintain  continuous operations.  How  can  a  company  safeguard  the  ability  to keep  things  running  during a  disruption?  If  there  are  no known  backups  or  planned maintenance,  there  must  be an  avenue  to  ensure  continuous operations.

In some cases, that means jumping  on  the  platform  of  a third-party  company  quickly,  and  the  question  of  due diligence  comes  in  place. But,  if  there  had  been  a  concrete  plan,  making  rushed decisions  would be out of the question.

On average,  an  infrastructure  failure  can  cost  big  enterprises  over  $100,000  per hour,  and  a  critical  application  failure  in  a bank can cost close to $500,000 to $1million per hour. Companies need to calculate  how  much  disruption  would cost the company when  there  is  an  operational failure,  consider  how  long  it can be allowed and how long it  will  take  them  to  make  operations  work  after  a  specific outage.

A business continuity plan is  a  valuable  resource  and serves  as  a  critical  reference during  disasters  for  businesses.  Company  stakeholders must  identify  various  risks, threats  and  vulnerabilities within  their  various  business  components.  A  simple example  can  be  what  would happen  if  our  bank  app  servers  failed  now?  Do  we  have the  proper  steps  to  create back-ups,  do  we  have  known emergency contacts and does the company have established steps for recovery?

The  BCP  is  an  essential document  for  both  big  and small  enterprises.  It  saves business costs and helps keep the  company  processes  flowing  during  an  incident,  and helps  stakeholders  make  the right  decisions  during  a  disaster.

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