Risk Experts Advise on Business Continuity Programs
Proven strategies for maintaining operations under worst-case scenarios
At times it feels as though the world is becoming completely unpredictable, and we can never know when or from where the next crisis is coming. Over the last few decades, we’ve seen businesses disrupted from terrorism, civil unrest, severe weather events, seismic events, nuclear accidents, toxic contamination, and government lockdowns designed to stop the spread of a pandemic. As a measure of protection, you purchase business interruption insurance, but there are two problems with relying on that coverage. First, not every event that could shutter your business is insurable. And second, insurance is never going to leave you as well off as you would have been if you’d been able to continue operating.
In this fast-paced economy, if you’re not serving your customers, someone else will. That puts you in the unenviable position of trying to woo old customers back instead of generating new business. And, if you operate a nonprofit charity, a shutdown can negatively affect your relationship with donors, and may leave the community you serve without recourse for an extended period of time. For all these reasons, we encourage every organization to have a business continuity program.
What is a business continuity plan?
BCP is a comprehensive contingency plan that allows your organization to continue with its core mission under circumstances that disrupt normal business operations. In creating a BCP, you would:
- List and prioritize your organization’s critical business functions
- Identify your critical dependencies, such as IT services, facilities, utilities, workforce, suppliers, equipment, and vital records.
- Design work arounds for the possible loss of each of those critical dependencies, such as manual work arounds for any period of time when your business is without computer service, and alternate suppliers in the event of a supply chain disruption.
- Create a disaster recovery plan that includes redundancies in data storage for quick retrieval.
- Test procedures to see if they work
- Periodically review the plan to keep it up to date
- Create and train a continuity team to implement the BCP when needed
A BCP goes beyond a disaster recovery plan, which is usually more limited. Your BCP also covers production and customer relations, which are so necessary to your efforts to continue operations.
Conducting a thorough Business Impact Analysis
You can’t know what to do in the midst of a disruption if you don’t know how the disruption has affected your organization. That’s the purpose of a business impact analysis (BIA), and this is where the experts at NAFA can provide the greatest level of assistance. We draw on decades of experience across various industries to analyze how a major disruption would impact your business. We identify the effects on various business functions and processes, then use that information to decide on recovery priorities and strategies.
The impacts we find might include:
- Lost sales and income
- Delayed sales or income
- Increased expenses
- Regulatory fines
- Contractual penalties
- Customer dissatisfaction and lost loyalty
- Delay in business development plan
Part of our process in conducting a BIA is to survey department managers with specific knowledge on processes. We ask them to identify specific impacts to the functions which they oversee. With this information, we can construct a list of obstacles to continuity. From there, we can work with you to design alternative processes that allow your business to overcome those problems.
Contact North American Forensic Accounting PC to discuss business continuity planning
North American Forensic Accounting PC helps businesses of all sizes develop business continuity plans so they can sustain operations despite disruptions. To learn more, call us at 347-286-4860 or contact one of our offices online to schedule an appointment. Headquartered in Harrisburg, PA, NAFA serves clients throughout the United States, including in Philadelphia, Pittsburgh, New York City, Atlanta, Charlotte, Miami, and the Tampa Bay Area.