Beyond Workers' Comp: Disaster Recovery Essentials
Is your business prepared for a disaster such as a hurricane, fire or other emergency? While you can never totally prepare for this type of disaster, events such as these can spell trouble for unprepared businesses. In your company, you should analyze your vulnerability to high water, power outages, labor strife, fire, chemical spills and other emergency situations and map out a plan of action.
What is a contingency plan?
A business contingency plan is a set of procedures which set up how a business will function in the event of an unplanned disruption.
Why is it important?
- To minimize decisions when crisis strikes
- To reduce dependency on one person
- To minimize a loss of data
- To facilitate a timely recovery of business functions
- To minimize loss of customers/revenue
- To maintain public image and reputation
- To stay in business!
How do I get started?
To begin, you must identify where your company would be vulnerable in the event that something unexpected occurred. There are three elements in the risk equation, according to Kelley Goggins, a Certified Business Continuity Professional with Fidelity Investments: threats, assets and mitigating factors.
Threats are events or situations that would cause financial or operational impact on your organization. One of your major suppliers going out of business, a fire in your building, your computer system malfunctioning or a key manager in the hospital can all have a big effect on your business. Each threat has a duration of time that the business or operation would not be able to function in a normal manner, if at all. Assets also need to be taken into consideration. A threat could cause lost revenues, recovery costs, fines and loss of good will or competitive advantage.
Mitigating factors are the protection devices and procedures in place that reduce the effects of the disaster. Examples include generators for use during a loss of power and sprinkler systems to control fire.
What do I need to include in my plan?
Backup power source - If the power goes out in your building, do you have a way to resume power? What about a UPS (uninterrupted power supply) device to keep your computer running when power is interrupted?
Computer and communication recovery - If the phone or computer system malfunctions, do you have an alternate way to keep your business functioning?
Alternate vendors - Do you have another supplier you can use in case your current vendors cannot supply? Are they in another area so a hurricane doesn't shut down all of your suppliers?
Duplication of important records - Do you have your policy and procedure manuals, critical forms, your customer list and a backup of your computer data at an off-site storage unit?
Alternate site - Do you have a place from which you could operate your business if you did not have access to your building? Is it in a different area and not likely impacted by the same disaster? Does it have an adequate power supply in case you must operate additional office equipment? Does it have enough space to accommodate the employees you would temporarily locate there to keep your business running?
Testing and reevaluating the plan - Have you made sure your plan will really work? Do you look at it annually to make sure it will still take care of your needs in case of an emergency? If your plan is not tested to see if it will work, you may not achieve your anticipated recovery time. How long will your customers wait before looking elsewhere?
How do I know if I have planned for everything?
The idea is to look at every possible point of failure and try to find an alternate means of keeping business continuity; however, it is hard to plan for everything. For example, millions of mayflies invaded Toledo, Ohio, and caused a massive power blackout when they smothered an electrical generation plant. In Honduras, 14 patients died in a state-run hospital when a rat gnawed through wiring leaving the facility without power. And in AT&T's credit card processing facility in Georgia, heavy storms in the El Nino year left them with 7000 checks which could not be opened and read with their high speed equipment because they were soaking wet. After trying hair dryers, personnel borrowed microwaves from the break room and used the "Danish" setting to dry the checks.
Are there any other benefits to having a contingency plan?
Sometimes the benefits of having a contingency plan can be two-fold. Beyond providing a way for the business to function during a disaster, planning efforts can also lead to improvements in the daily operations of your business. Some aspects of the business that are not as efficient as they could be may surface and can be eliminated before they ever become a problem.
Where can I get more information?
Disaster Recovery Journal
Contingency Planning and Management
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