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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