Business continuity planning aims to prevent disruptions and respond to business interruptions or disasters effectively and efficiently. As such, it typically ensures the safety of employees, customers, contractors and visitors and minimizes the impact of these disruptions.
We recommend doing this by accelerating recovery efforts, and safeguarding the company's operations, reputation and stakeholder relationships.
"Plans are only useful as evidence that planning took place." U.S. military service members often use this quote when discussing "the plan" any mission, tactical plan or even military business administration decisions.
That cadence is partially true with business continuity plans (BCPs). A BCP should remain flexible enough to respond to changing circumstances.
Organizations should also design them to address the loss of people, work, equipment, IT services and suppliers (or other third parties). Additionally, a business continuity plan should outline how your teams can implement the recovery strategy.
- Threats to business continuity—and the reason you need a business continuity plan—include global crises, natural disasters, utility outages and cybersecurity.
- There are varying types of business continuity planning, each with its own purpose within your organization’s overall business resilience.
- Not having a plan for an emergency can lead to financial loss, loss of consumers (and team members), loss of confidence and brand reputation damage.
- Creating a business continuity plan is paramount to running a resilient and agile business.
- Finance teams need to know efficient and agile planning strategies while fostering transparency for effective business continuity planning in finance.
Threats to Business Continuity
We recommend designing a plan for all potential outcomes. Common business disruptors to look out for are as follows:
In 2020, we all learned the necessity of a business continuity plan when responding to the COVID-19 pandemic. Employees were required to work from home while many employers were unprepared for a remote workforce.
IT infrastructures were unable to manage people working outside of the office. Equipment and supplies were scarce. The situation only got worse as shutdowns persisted.
As concerns with the global pandemic began to ease, worldwide inflation, a war in Ukraine and other economic insecurities continued to impact businesses.
Your organizations must be prepared for global crises and this is where a continuity plan comes in.
Natural Disasters and Utility Outages
Natural disasters refer to anything related to weather, such as hurricanes, tornadoes, tsunamis or other natural phenomena, including:
- Volcanic Eruptions
- Meteor Strike
These catastrophes are tricky to predict and occur in a matter of moments.
They can cause severe damage to structures and disrupt supply chains in affected areas. Natural disasters can also cause utility outages, such as power, water and communication lines.
Cyberattacks include ransomware attacks, SQL injections, data theft and distributed denial of service (DDoS) attacks. At best, until the issue gets fixed, the IT infrastructure may function. At worst, without a backup, all your business’s data can become inaccessible.
Types of Continuity Planning
Business continuity planning concentrates on the implementation, management and maintenance of systems designed to protect against disruptions and restore services, resources and activities necessary to maintain critical business functions.
Source: The Hustle Story
Effective recovery strategies can resemble a set of business continuity plans departmental team leads execute in order of priority and revise regularly. There are four major types of continuity plans:
1. Crisis Management Plans
Many refer to a contingency plan as an "incident management plan." This provides a structured response to incidents that can lead to devastating consequences for the company if poorly managed. Crisis management plans tell an organization what to do in a disruption.
2. Crisis Communications and Emergency Response Plans
Design your crisis communication plan to complement crisis management activities by coordinating with communications stakeholders.
Executive management prepares the emergency response plan for the worksite and focuses on ensuring a safe working environment and protecting and sustaining life. Business continuity plans may contain different sets of steps for various threats.
3. IT Disaster Recovery
An IT disaster recovery plan focuses on recovering IT systems, telecommunication and data assets. It focuses solely on the IT infrastructure and ways to recover data and get the organization’s tech stack operating again after a catastrophe.
4. Business Recovery
A business recovery plan (often the heart of a business continuity plan) focuses on the continuation and restoration of business resources and activities supporting the delivery of goods and services. These often involve manual workarounds, procedures and alternative methods for managing the loss of equipment, personnel, technology and suppliers.
Benefits of Business Continuity Planning
A business continuity plan is essential for any business as disruptions are often expensive. We're talking about everything, including DDoS attacks, which temporarily bring down websites, warehouse fires causing loss of products and disruptions in the supply chain.
Not having a plan for an emergency may lead to loss of customer (and employee) confidence, financial losses and damage to an organization’s reputation.
Here are some key benefits of continuity planning:
- Quickly recovers operations after a disruption
- Keeps your business operating during and after a disaster
- Reduces costs and length of any interruptions
- Reduces financial risks and exposure
- Safeguards the company's reputation
- Builds considerable customer trust and confidence
- Develops confidence within the organization
- Insures against otherwise unforeseen and unacceptable risks
- Complies with legal or regulatory requirements
- Saves lives during hazardous events, such as fire
Business Continuity Framework
A business continuity plan is paramount to managing a resilient and agile business. Your business continuity team and other employees need to understand the significance of a continuity framework. Here’s how this framework helps your teams:
- Identify the goals and objectives of the plan
- Establish an emergency preparedness team
- Perform a risk assessment and business impact analysis (BIA)
- Identify essential e-commerce business functions
- Prepare a plan for each essential function or service
- Review and make sure every business function has been addressed
- Train staff, test, revise and update the plan
What Finance Teams Need To Know About Business Continuity Planning
It’s no secret that the world is still navigating uncertainty today. The ripple effects from the past (almost) two years have upended the economy, forcing companies around the globe to shift strategies, explore alternative business models and make on-the-spot operational changes.
For finance leaders, this presents a tremendous challenge. As strategic partners to the business whose insights help influence key decisions, how can finance pros help their organizations weather the storm? And how can they do so while also planning for sustained growth?
The answer to this is multifaceted and will vary between companies depending on size, structure and industry. But one key principle rings true—every organization needs to have a BCP. Or at least prepare to develop one quickly.
Business Continuity Planning in Finance
Business continuity planning involves policies and procedures that keep the company running during transformational periods or in the wake of a major disruption.
For finance leaders, aspects of continuity planning can include realigning capital investments and taking on some debt. Alternatively, it can also include ensuring there’s enough cash on hand to cover any unforeseen expenses.
As resident experts on the drivers of revenue and growth in an organization, finance leaders know how to keep their companies in the black better than anyone.
Efficient and Agile Planning
Finance pros cannot plan effectively without clear and up-to-date insights into long-term business implications. That is why rolling forecasts are so essential to maintain. Unlike static annual budgets, rolling forecasts are based on real-time financial data. They typically look ahead at least five quarters beyond the original budgeted period.
With rolling forecasts, finance pros have the flexibility to change their plans quickly for easy analysis of how new budgetary assumptions would affect the company’s outlook for the next two to three years or more.
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That level of foresight enables leaders to confidently chart the best path forward through uncertain times. It also helps them sleep soundly, knowing they based their decisions on reliable, actionable data.
Perhaps even more essential during times of uncertainty? Fast and efficient integrated planning. And this means aligning every business function toward the same strategic goal.
After all, organizations cannot expect finance leaders to take the helm of a company’s continuity planning process. Especially without support from the entire crew during periods of change.
We break down the basics of extended and integrated planning in this post.
How To Foster Transparency AND Prioritize Efficiency in Business Continuity Planning
To foster transparency, accountability and collaboration while still prioritizing efficiency, finance leaders need to ensure that:
- They have a single source of truth for all financial and non-financial company data.
- All internal stakeholders have visibility into the planning process and the means to actively participate.
All of this is much easier said than done, even for the savviest finance leaders out there.
At the end of the day, an effective integrated planning process requires an agile analysis of critical metrics and the ability to consolidate data from multiple sources for fluent, more accurate reporting.
Suppose finance teams are bogged down with manual Excel processes and locked into static annual budgets. In that case, they’ll have a much harder time responding quickly to adverse conditions requiring more forward-thinking analysis.
Discover everything you need to know about financial planning and analysis in this guide.
With a clear plan, the proper tools and the right resources at their disposal, finance leaders won’t have to fear periods of uncertainty. Instead, they’ll be able to confidently approach every situation and develop a data-driven game plan—ultimately aligning the entire company on strategy and leading the charge toward updated targets and goals.
And, of course—we’re here to help.
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