Advise on Business Continuity: turn gloom & doom to win win

Your client has requested an urgent meeting. They look anxious. An important customer has demanded to see their business continuity plan. (The plan that says how they intend to keep operating if the business is affected by disruptions or disasters.) You sigh and ask,

"What did you tell them? "
"We said no problem. Get it to you by the end of the week ".

Your client has revealed that they have no business continuity plan currently in place. Nor do they have any real notion of how long it takes to create one. You explain that by its very nature a business continuity plan should be instantly accessible and as something which may save the business from extinction, it is not something that should be just thrown together. Your next question causes the client to shift uneasily in their seat,
"Why did the customer ask about your plan? "
"Well last week you see, we had a bit of nightmare. "

Doom

Your client's tale of woe will unfold along the usual lines. One of the mundane disasters which don't make headlines but that brings many businesses to their knees. The story will involve the usual elements; something broke, so and so quit, the damn computers or the neighbouring business from hell. Such events are also governed by clauses within Sod's Law. These state that the leak/fire/crack will occur when nobody is around or that the machine will break just as the big order is due.

Nearly 1 in 5 businesses suffer a major disruption every year -Expecting the Unexpected 2005, the Home Office.

There is another important factor which has led your client to this predicament. People just don't like thinking about what can wrong in their business. Imagining scenarios where their business goes down the pan is not a pleasant way to spend an afternoon. One would hope that most business owners are optimistic and enthusiastic about their business prospects. This combined with an entrepreneurial attitude to risk makes quiet reflection and some focussed pessimism quite difficult for them to engage in. As with most things it is about getting the right balance but unfortunately statistics show that too many businesses are adopting the "head in the sand" approach.

60% per cent of small businesses have no Business Continuity Plans -Business Continuity Management Survey 2006, The Chartered Management Institute, sponsored by the Cabinet Office.

So no doubt your customer would have merrily continued without a business continuity plan if their customer hadn't raised the issue. Heads are now being yanked out of the sand by forces outside the business. Customers, insurers, investors and regulators are asking: what if? They want to be sure their money and reputations are in safe hands.

The UK Civil Contingencies Act now requires all local authorities to have business continuity plans. The Audit Commission self assessment toolkit asks: Does the council have quality assurance arrangements over continuity for contracted services? www.audit-commission.gov.uk/emergencyplanning/bcp.asp

"Sainsburys starts supplier business continuity vetting". www.continuitycentral.com/uknewsaug2005.htm.

Gloom

Business continuity is rising up the agenda of stakeholders for a variety of reasons;

• IT dependence - absolutely everything depends on complex, delicate systems
• Globalisation - your suppliers (and their suppliers) are now far, far away
• Thinner organisations - with the staff cuts and the outsourcing
• Governance and regulations - greater transparency requires more rules
• Media saturation - your mistakes are instantly publicised
• Internet - customers can leave you at the click of a mouse

(Let's leave the increase in terrorism and tornadoes for another time).

Of course the term "business continuity planning" doesn't exactly help. Even the experts struggle to explain what it means and for some reason people immediately starting talking about computers. There are several reasons for this;

• Business continuity got too intertwined with the Y2K issue.
• Big IT solution companies have really good marketing teams.
• It's just easier to talk about backing up data than thinking about how to deal with a damaged reputation.

IT security and resilience are obviously crucial and thankfully there are plenty of solutions available. (Deciding which to choose is now the challenge). However there are other major threats with less obvious answers that get much less attention; ensuring the business critical knowledge in Burt's head doesn't walk out the door when he retires/quits/dies, ensuring that your amazingly cheap, foreign supplier don't leave you in the lurch etc.

Thankfully the tide is turning and nowadays business continuity practitioners stress the need to have a more holistic approach to business resilience. Protecting and planning for all key resources:

• People
• Information
• Telecomms
• Premises
• Equipment
• Finances
• Reputation

Some key principles have evolved to help us with what can seem a daunting task:

1) Plan for the effects of disruptions and don't get too bogged down in the causes.

Example - If you can work elsewhere then it doesn't matter whether your normal working environment has been flooded, cordoned off, vandalised, infested or destroyed by aliens.

2) Prioritise the really important things you do and what things you need to do them.

Example - A particular business may decide that when something bad happens they throw people, time and effort at deliveries, payroll and new orders because marketing, training and collections can wait.

Win for clients

For businesses the most obvious benefit of sound business continuity planning is survival. To cope not collapse under the strain of whatever business throws at it. However it is very hard to maintain this sense of urgency and complacency can quickly set in. After all, "It'll never happen to me". Added to this are the hefty insurance premiums they pay. Some clients may still believe that insurance will make it all okay in the end. The more battle weary among us knows that when the insurance cheque finally arrives it cannot mend a ruined reputation, it won't make disgruntled suppliers agree to supply again and it won't stop competitors pouncing on misfortune. So the wise adviser can bring other elements into play:

Marketability - make money

Forget bigger offices or being loads cheaper. If you aren't reliable it all means nothing. At heart business continuity planning is about delivering - no matter what. Customers love this. They want to hear how you have thought about them and their needs even if the worst befalls you. If they have to choose between someone supplying similar products at similar prices then being more resilient than your competitor can tip the balance.

Efficiency - save money

Business continuity planning shines a spotlight on what you absolutely need to run core activities. As you decide what is the bare minimum required to operate you will naturally start to question the amount of resources you are using in normal operations. Isn't interesting that in an emergency Dave agrees he could run finance from home with a laptop and mobile phone. Yet in your leased office he has two staff, three landlines, three computers, a fax machine and a temp around year end.

The level of insurance premiums should also reflect the efforts a business has put into lowering risk through sound business continuity management.

Win for advisers

Talking to clients about business continuity planning allows advisers to do what they do best. Bring an outside perspective to business critical issues and strategies. Business continuity planning offers a new window onto the inner workings of the business.

Add value

Some questions are simple -
"What are the most important activities the business performs?.. what are the key risks?.. what will happen if that person or resource is not available?"
From these simple prompts a myriad of possible problems, consequences, options and solutions are brought into the light. All of which may need adviser input.

Some questions are harder to ask -
"I know you've done business with him for years. But what if he lets you down? He will bring you down with him".

Retain relationships

You've worked hard to develop your client relationship. Ensure they cope with emergencies and remain your clients for years to come.

Your small business clients may say that business continuity planning is only for big companies. Unfortunately with less resources, tight margins and fragile cash flows it is small businesses that need business continuity planning most.

Conclusion

Your client looks at you expectantly. You read through your action plan;

• Save face and buy some time. The reason they can't instantly supply the business continuity plan to the customer is that they need to strip out some confidential info first.
• Admit that last week's problem reflects the fact that no business continuity plan is perfect, that it is always evolving but that important lessons have been learned and acted upon.
• Clear your diaries and get key people together to draft something as best they can in the time.
• Explore areas where they might be able to work with the customer. Mutual aid agreements over staff, equipment or work space. A useful tactic to deflect attention onto the customer's own disaster planning.

FIN

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About the author - Stephen Belshaw works at Safe in the Knowledge ( http://www.safeintheknowledge.com ). We provide an online tool to check your own disaster planning arrangements and those of your key suppliers.

Editor