Lack in Continuity in a Buisness

A business continuity plan is created to ensure that organizations can continue to operate in case of disaster. An extensive business continuity plan is made up of the following parts:

A proper analysis of organizational threats
An extensive list of the primary tasks involved in maintaining the organization's operations
Management contact information in case of a disaster
An evacuation plan in case of a disaster
All information on data backups and a backup of the organization's site backup
Proper collaboration between all departments of the organization.

A business continuity plan that is regularly updated is considered to be an extremely valuable tool for any company, whether it has just started its operations or has been in the business for decades. Only 22% of organizations wanted to revise their business continuity plan and strategies in 2019, and this happens due to common misconceptions, some of which are listed below.

Common Misconceptions About Business Continuity

There are many misconceptions that exist about business continuity. Mentioned below are the most common misconceptions and assumptions made by businesses about not keeping a business continuity plan.

Insurance Covers Losses

This is the most common misconception. Insurance does cover losses but not all. In case of death or any federal violations, or even events leading to a loss of reputation, the company will not be insured. This is something that needs to be implemented along with the business continuity plan. One option to do so is by incorporating public liability insurance in their contingency plans itself to create an added layer of security.

We Know What to Do in An Emergency

Creating an outline of an emergency response plan can be of help to companies but it will not give them a lot of guidance when it comes to response. For example, having an evacuation plan ready is good, but that doesn't mean all the employees will know what to do in case of a tornado or a fire. When it is time for an emergency, people are generally very emotional, making it difficult to keep calm. This is something a predefined and practiced plan can help with.

There is no Time to Develop a Business Continuity Plan

A business continuity plan involves a lot of time, expertise, and knowledge. This is a lot of effort and resources for something that has not happened yet. This is why companies believe that it may not always be worth the time, money, and effort put into creating one. This is a common misconception that can lead to a substantial loss of revenue along with the possibility of closure.

The Impact of not Having a Business Continuity Plan

Violations

All businesses are legally bound to have an Emergency Action Plan (EAP) in place. There are a lot of audits that happen randomly, which means that if a business does not have a plan in place, they are in direct violation of the law and lead to a hefty fine.

Reputation

If a business is not properly prepared and cannot address a disruption that has an impact on the business continuity of an organization, it can drastically affect the company's reputation and its future. Clients and consumers both accept the likelihood of a disaster taking place, but they also want businesses to have efficient measures in place to respond to any disruptions.

Financial Loss

Possibly one of the biggest consequences of not having a business continuity plan would be the financial impact on the company. Something like a fire at the premises can result in losses leading up to millions, and this is without the liability costs that can arise from damages claims. Not having a business continuity plan is not an affordable option.

Decreased Stability or Complete Closure

The survival rate of a business without a business continuity plan is less than 10%. Another study conducted by the University of Texas stated that not more than 6% of organizations that have faced catastrophic data loss have managed to survive, and around 43% of companies never reopened.

Injury or Death

When it comes to natural disasters, any incidents of violence or some other emergencies that can be considered dangerous, employee safety, and customer safety become a priority. Without an effective business continuity plan, companies cannot effectively communicate with their stakeholders during an emergency. This means they are not equipped to respond to any disastrous situation in case it presents itself.

Lost Productivity

A recent study noted that 78% of companies had reported losing out on one or more mission-critical applications due to a disaster or crisis at some point in their lifetime, and around 28% reported losing a data center for more than a week time. This level of disruption causes a loss of productivity. It also damages a lot of different aspects of business operations. It affects sales as leads do not get converted, which negatively impacts customer service as the crisis continues. All employees need to have the most up-to-date, relevant knowledge and training possible in case of a crisis to minimize the damage in case the company is still operational.

Consequence-Based Planning

The necessity of a business continuity plan has been made clear. While going about creating a business continuity plan, companies should use consequence-based planning in their process. The plan should answer various questions such as:

What should they do in case of floods?
What will be the response if there is a cyclone?
How do we deal with threats to cybersecurity?

The plan needs to be realistic and specific to the location of the company and industry. Companies should make a checklist and use it. It should include more questions along the lines of:

How safe is the company from harm?
What is the first response action?
Is there a way to get all decision-makers involved?
What is the evacuation plan?
Who are the decision-makers in the organization?

Conclusion

All businesses are vulnerable to disaster and disruption, regardless of their size, which is why an effective business continuity plan is important to an organization as a part of its risk management strategy. Not just enterprises, but even their workforce should also play its part in due course. In this regard, enterprises train their workforce in the best practices of IT Security and Governance to better understand their roles and responsibilities to mitigate disasters and disruptions in an effective manner.

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Source: https://www.invensislearning.com/blog/impacts-not-having-business-continuity-plan/