Creating a business continuity plan can be profitable for a company
Building awareness, contingencies, safeguards, and alternative options comes at a price. For most business owners and managers, shelling out the dollars to guard against something unseen and even uncertain is just counterproductive. In fact, it is counterintuitive to the basic human ‘flight or fight’ instinct which guards us against hazards – but only imminent hazards, happening in the here-and-now.
Business continuity and disaster recovery planning is a must for some companies. It is particularly prevalent in the IT (Information Technology) industry, and primarily for two reasons:
- They store many critical computerized records (sometimes the personal information of thousands or millions of clients) that must be safeguarded and are invaluable to the business.
- Customers expect instant-on access to networks. They must be up and running 24/7, and there is little tolerance for anything less.
How important is continuity and recovery planning for non-IT businesses? Every business is subject to industry and location specific threats, as well as random or outside events that can seriously harm it. Through risk analysis and cost / benefit analysis, the impact of various hazards can be measured and refined into a targeted plan that tackles specific high risk threats. This is essential for cost control.
But cost-control measures do not offer enough value for most business owners and managers. Business continuity planning needs to actively affect the bottom line – it needs to promote profitability.
The costs of a continuity plan or program need to be weighed and optimized against the financial gains that come with planning. Specifically:
- Reducing insurance premiums. Insurers don’t mind high risk – if you’re willing to pay a high premium to insure against it. Reduce the risk and you reduce the premiums.
- Good business-to-business relationships depend on dependability. If you can you ensure your customers and strategic partners that your business will stand strong through thick and thin, that makes you more valuable. And that’s worth giving you business, or more business, or higher priced business.
- Proper business continuity does not involve ‘stocking up on supplies’ so much as it focuses on finding alternate suppliers. And there is something inherently profitable about this approach; it forces you to look at other purchasing or outsourcing options. Invariably, you can find someone else who is faster, cheaper, better quality … decreasing your general expenses of simply doing business.
- Businesses are about people and continuity planning makes people better. It melds team-building with personal development. It gives your people more skills and makes them more capable all around. Better people make a better, more profitable business.
- Of course, if disaster strikes, a company is better prepared with a plan than without one and if good planning can actually pay for itself, then having that plan when disaster strikes is like winning the lottery. If a company can survive a catastrophe while all around, the competition is crumbling, then the question is not can we afford to have a business continuity plan, but, can we afford not to.
To make good business sense and break through the cost barrier, business continuity and disaster recovery planning must promote profitability. It has to have a positive impact before a disaster strikes. It has to have a good ROI (Return on Investment) for companies to invest in it. The key is to control the size of the planning investment and maximize the returns during planning.