A Simple Advice to SMEs about the Importance of a Business Continuity Plan

, A Simple Advice to SMEs about the Importance of a Business Continuity Plan, eCo-Friendly Work & Play Space
Don't wait for a disaster to strike!
by Rennie S. & Amear Suhail

What is a Business Continuity Plan?

Business Continuity Plan (BCP) is basically a set of pre-drafted protocols to ensure in times of emergency or unexpected disruptions businesses would be able to react positively and their business will remain active. Many companies in Singapore are successful because they have BCPs in place to safeguard their businesses.

Expected Losses WITHOUT a Company Business Continuity Plan

  • Business Failure. Most SME’s cannot bounce back from a significant crisis after a disaster or an emergency disruption. It is estimated that about 75% of these businesses fail within 3 years after a major disruption.
  • Financial Losses. Crisis will be extremely costly to companies, especially when there are no plans to lessen the impact. Over a 5 years period, it is reported that business have lost more than USD 70 million due to these crises.
  • Ruining Reputation. The way a customer or public views a company plays a vital role in developing a reputation. A disaster or a social media error is enough to create a negative brand image of insecurity or untrustworthiness.

Clearly, the drawbacks of not having a BCP in place are detrimental to the existence of any Small and Medium-Sized Enterprise.

 

Benefits of a Business Continuity Plan

  • Assuring Business Stakeholders. Enterprises are able to assure their customers, partners and vendors that things would be under control in case of an emergency, and their business will continue despite the outage. There will be a clear pathway of communication between the companies and its employees, definitive actions will be taken under certain types of crisis should it unfold, thus protecting all stakeholders. Clear communication is vital as it would keep unwanted confusion out of the way.
  • Decreased Downtime. Technology outages and various unexpected catastrophes, e.g., fire, earthquakes, tsunamis, SARS, Ebola, coronavirus, etc, have shown to cost a SME about USD 5,600 per minute on average. Continuity of products and services are vital in generating continuous revenue, especially during crisis periods. There is a direct relationship between revenue and speed of recovery when a company is affected during a crisis period, i.e., the faster operations can be resolved or mitigated; the lower the losses.
  • Quality Control. The quality of product and services is one of the main reasons why a customer hinges to a particular company. A good BCP has the ability to patch processes that may be affected or interrupted; this may include the use of technology, infrastructure, personnel, etc. Hence, this would provide quality and consistency to products and services, thus protecting an enterprise’s customer base and their revenue.

So how can one set-up a successful BCP to reap its benefits?

The development of a successful BCP can be achieved in 5 stages.

Firstly, start by forming a business continuity management team. This team should be made up of senior business line managers, assistant managers and administrative managers from different departments. These persons will be responsible for preparing project standards, training staff, identify processes and co-ordinate the company’s disaster recovery plans.

Secondly, it is vital for any company to understand and identify the financial, operational and physical risk that the company would incur should a disruption occur. To determine these risks, organizations can perform a Business Impact Analysis to identify specific risks and threats to operations, employee, supply chain, etc. Brainstorming sessions with senior and experience staff members can bring out and list potential risks and threats that may arise. After identifying the list of potential risks, in-depth discussions can be conducted to understand how the risks and threats can affect everyday business operations and procedures. Questionnaires can be helpful in the preparation of the Business Impact Analysis Report.

Thirdly, the Business Impact Analysis Report will reveal certain faults between what resources a company has and the resources it needs. For this, the team can perform a Gap Analysis. This Gap Analysis would also identify an organization’s recovery requirements with respect to its current resources. This is a systematic and objective method in dealing with recovery options and any agreed strategies.

Fourthly, knowing how to react and recover are vital to bounce back effectively after an unexpected event. In this step, we identify recovery strategies for a business and processes in order to implement them. Here is a sample question you can ask, “In case a facility is damaged, what actions have to be perform in order to meet the demands to bridge the gap?” These and many other concerns should be included in a BCP.

Finally, a BCP is never finished, as an enterprise grows and changes, BCP requirements will change to reflect the company’s new changes. Hence, it is a recommended to change and adapt the BCP as the business grows. It is always a good idea to test the BCP, its effectiveness and make continuous improvements.

If you would like to know more about LikeMeetWork’s BCP Alternate Worksite, please contact us at Enquiries@LikeMeetWork.com or +65 8834 1914.

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