The Importance Of A Business Continuity Plan

Such Planning Can Pay Off Handsomely

When SuperStorm Sandy hit New Jersey two years ago, many manufacturers were not prepared. Some had “Disaster Recovery Plans.” But many did not have a Business Continuity Plan which would have helped them keep operating through the crisis.

How does a Business Continuity Plan (BCP) differ from a Disaster Recovery Plan? A Continuity Plan shows how to continue doing business until recovery is accomplished. It’s important. It can help you avoid shutting down completely during the weeks following the disaster.

Without it you could face problems such as the one of the local community colleges ran into after Storm Sandy. The college had trouble getting the attention of the local electrical utility—which had not given it priority business status. It was being treated as a “consumer” customer. This lack of communication and planning thus delayed the reopening of the campus—since it took longer that it should have for this vital institution to get the electricity it needed.

Avoid situations like that. You don’t want your company completely shut down if another hurricane hits this fall or a big snowstorm engulfs New Jersey this winter. A Business Continuity Plan is probably the last expensive insurance any company can develop to guard against having the close down the entirely before reopening.

To create your own Business Continuity Plan (BCP), you can also find a template online or turn to an advisor who specializes in this. It needs to contain vital information about the people and processes you would need to run your company—or critical elements of it—while waiting for full recovery. You need to store that plan where you can get hold of it outside your daily premises. And you need to make sure your employees have copies (at home, not just in the office) and know how to make it operational. Here is a brief action list for setting up a BCP:

First, create name and contact lists

 Personnel and Jobs:  Determine the jobs vital to operation and then identify the individuals who handle them. Create a list of all these individuals with complete contact information including where they may be reached during an emergency. You might also consider setting up equipment in their homes so they can telecommute in an emergency.

 External Suppliers and Services: This list should contain the contact information not only for suppliers, but also for those professional experts who serve you such as bankers, attorneys, and IT suppliers.

Secondly, identify critical equipment and software and off-site locations

 Equipment and Software: Conduct a survey of all your essential equipment and software, and put together a document that contains all the right replacement and repair information.

 Back-Up Location: Identify where you will conduct business if your headquarters location is not available. You may not be able to operate your manufacturing facility, but you still need to run certain other functions of the business. Your alternate location could be another business office or nearby hotel. Or you may prefer to have your employees telecommute—although this could be problematic if land lines are down and wireless facilities not working.

Computer Back Up: If you rely heavily on computers to process customer information or deal with suppliers, you probably need an off-site server you can use in this type of situation. Many sites are available.

 Third, identify the documents you need to run the business

 Store information on documents off site: Make sure you have copies of your legal papers and articles of incorporations, banking information and other important documents stored somewhere other than the office computers. You might have to make payments on bills during the time your manufacturing site is down. Make sure you can do that.

Fourth, put the plan into action

Create an action plan: The easiest way to familiarize employees with your contingency plan is to create an Action Plan and chronology they can follow if a major emergency takes place. You need to communicate the plan with employees beforehand, and it’s a good idea to test the plan to make sure it works.

Update the plan: Review and revise your plan periodically. That way it will be ready and up-to date when you need it.

A Business Contingency Plan is vital. It can get you through that awkward time before your Recovery Plan kicks in. Since it will allow your company to operate, even during and right after a major emergency, it is a good investment of your time and energy.

Complimentary Assessment

NJMEP is partnering with Firestorm to offer NJ manufacturers a complimentary Business Continuity Assessment. The assessment, which is typically valued at $1,800, is offered to NJ manufacturers at no charge through NJMEP. This diagnostic tool will help you evaluate if your facility is prepared for disaster.