Understanding Business Continuity Management

Disasters, natural or man-made, strike without warning and affect businesses of all sizes. From severe weather events to cyberattacks, the risks are many and varied. To reduce these risks and ensure the continuity of core operations, companies use business continuity management (BCM).

BCM helps guide and implement business continuity plans (BCPs), which are designed to reduce disruptions and speed up the recovery of critical functions in the aftermath of a crisis. Consider:

• Every year, computer downtime costs U.S. businesses billions in lost revenue.
• Disgruntled employees and human errors are major contributors to business interruptions.
• Many businesses do not recover from disasters.

BCPs face these issues by proactively addressing risks. BCPs often aim to reduce financial losses, maintain market share, preserve reputation, meet regulatory compliance and safeguard data integrity. Acknowledging and addressing these risks motivate organizations to invest in business continuity strategies.

Key Elements

One of the best approaches to BCM is using a well-thought-out BCM methodology. BCM methodologies are strategic approaches required for organizations to quickly respond to and recover from unexpected events that stall core business processes.

As a best practice, a BCM methodology should be tied to the risks related to an organization's key activities, focusing on evaluating people, processes, infrastructure and information crucial to these operations.

The main objectives of a well-defined BCM methodology include:

1. Risk Reduction: By identifying risks, organizations can reduce the likelihood and impact of disruptions.
2. Loss Mitigation: Whether financial or reputational, BCM aims to minimize loss severity through proactive planning.
3. Recovery Objectives: Defining specific recovery time objectives (RTOs) ensures that critical processes, support functions and IT assets can be restored within acceptable timeframes following an incident.
4. Regulatory Compliance: This compliance ensures operational continuity and maintains legal compliance.
5. Stakeholder Assurance: With a commitment to protecting all stakeholders' interests — customers, investors, partners and employees — companies maintain a positive reputation in the market.

A good BCM methodology is not just a checklist but a strategy that aligns with business goals and operational realities.

Made up of best practices and tools, an effective BCM methodology allows proactive risk management, swift recovery and resilience in the face of adversity, safeguarding business continuity in an unpredictable world.

Best Practices

Business continuity management best practices are critical for companies navigating crises. Companies and professionals that are ahead of the curve use best practices to develop BCPs. BCPs are crucial to outlining a company's response to a disruption: detailed recovery steps, business continuity management checklists and activation checklists in response to major incidents.

Following established best practices in BCM, such as those outlined in industry resources like "Planning and Executing Business Continuity Management: A Guide for Companies," can conserve resources for both companies and staff.

Starting a Business Continuity Plan

Starting a business continuity plan requires a company and its key staff to know the what, where and how of their continuity plan. To start any BCP project means defining the objectives, the scope and the approach. Once core BCP elements are defined, an entry point must be identified. Some examples of each BCP element are listed below.

Possible objectives may include:

• Satisfying audit or regulatory requirements
• Rebuilding infrastructure
• Resuming business activities
• Continuing customer service

Once the objective is found, the right approach to reaching that objective can be chosen:

• Tick-box
• Infrastructure
• Gradual/subplans
• Business

Taken together, the objective and approach allow a company to define the scope of the project. With a chosen approach, an entry point can be chosen, which may include:

• Evaluate threats.
• Assess risks from interruptions.
• Analyze critical processes.
• Protect the IT infrastructure.

BCM Method

The BCM method, as a best practice, not only safeguards against disruptions but also identifies inefficiencies and redundancies within organizational processes. This can lead to reduced operating costs. BCM allows organizations to prioritize critical functions and develop strategies for continued operations during crises.

Aligned with project management standards, the BCM method consists of seven phases:

1. Perform BCM discovery and benchmarking.
2. Evaluate risks and controls.
3. Conduct a business impact analysis (BIA).
4. Identity continuity strategies.
5. Document the plan.
6. Implement the plan.
7. Validate the plan.

Benefits of the BCM method include improving:

• The availability of infrastructure, facilities, equipment, critical IT applications, data and communications
• The security of facilities, IT assets and processes to ensure that only authorized personnel have access to facilities and information assets
• The continuity of critical business processes and IT systems

Effective BCM implementation can open avenues for additional revenue. For instance, offering high-availability services as part of BCM can differentiate companies in competitive markets, providing a unique selling point to new clients.

Risk Management

Core to any successful BCP project—and a best practice—is risk management. The "five As" often used in risk management are:

1. Assess risks.
2. Accept or reject risks.
3. Avoid risk, transfer risk or reduce risk to an acceptable level.
4. Analyze performance gaps.
5. Act to improve.

Used in concert with BCM, companies can produce near bullet-proof BCPs.

Toolbox

In the world of BCM, both business continuity management tools and business continuity management templates are indispensable.

A BCM toolbox includes tools like the Business Continuity Management Methodology, the Business Continuity Program Charter and the Business Continuity Compliance Questionnaire.

When facing business disruptions, these tools can help by prioritizing operation elements based on identified risks.

BCM Methodology

As a business tool, the Business Continuity Management Methodology is one of several business continuity management approaches. It is structured in seven phases, each phase crucial for developing a continuity of operations plan.

Phase I: Perform BCM Discovery and Benchmarking

This includes an analysis of key business processes, support functions and critical IT assets. This step evaluates existing measures against industry best practices and organizational objectives. Legal, regulatory and contractual requirements impacting BCM are also reviewed to inform recovery strategy decisions.

Phase II: Risk Evaluation and Control

The focus is on assessing risks across four categories: environmental, man-made, business processes (including supply chain) and IT. Insight is provided into the potential impacts of disruptions, guiding risk mitigation strategies.

Phase III: Business Impact Analysis (BIA)

The BIA examines key functions, resources, technology, regulations, service-level agreements (SLAs) and dependencies — both internal and third-party. It quantifies potential losses and measures impacts. Key areas looked at include work stoppage, customer service impact, financial loss and reputation damage.

Phase IV: Identify Continuity Strategies

Based on BIA findings and identified objectives, including RTOs and recovery point objectives (RPOs), process-specific recovery strategies are developed. Core to this phase is the identification of high-level implementation and maintenance-cost estimates.

Phase V: Document the Plan

This phase focuses on creating the company's business continuity plan and leads to process-specific plans that are both team- and checklist-based.

Phase VI: Implement the Plan

Implementation involves operationalizing the documented BCM plan, earmarking a recovery budget and resources, and appointing recovery coordinators.

Phase VII: Validate the Plan

The final phase of the methodology is holding a validation session with key staff. Using a realistic threat scenario identified in Phase II, staff review and confirm the plan's accuracy, readiness and relevance in current business conditions.

Each phase of the BCM method contributes to a fulsome and flexible business continuity framework. This helps companies and staff quickly and safely navigate disruptions and maintain business continuity.

Business Continuity Program Charter

Another tool is the Business Continuity Charter. A charter is a plan of action for interruptions to operations beyond the scope of daily operating procedures. Business Continuity Charters focus on:

• The safety of human life
• Protection of property
• Continuity of business operations

A Business Continuity Charter often creates a continuity steering committee and business continuity plan project team. These bodies help with continuity planning and execution.

Business Continuity Compliance Questionnaire

BCM planning, once complete, is kept relevant by audits. To review a company's business continuity management procedures, auditors can use made-to-fit tools designed to locate process weaknesses. Some questions found in the Business Continuity Compliance Questionnaire include:

• Are all personnel aware of business continuity planning efforts and their level of importance?
• Does the plan have a clear and current management and mission statement?
• Have all current internal and external threats and their associated probabilities been identified and updated if needed?
• Have all the organization's vital records been identified and updated?

These questions help ensure that BCM plans are resilient and aligned with evolving threats and organizational needs.

Wrapping Up

BCM includes crisis management, business process recovery planning and IT disaster recovery planning. It focuses on identifying critical processes and developing strategies to give companies a better chance at quickly recovering from a crisis.

As a best practice, BCM is not a static effort. Regular updates and testing are needed to address evolving threats and operational changes. When BCM is done right, it becomes part of a company's organizational culture.

While difficult to measure, team members involved in business continuity planning gain insights into key business processes. This helps increase interdepartmental communication and collaboration.

When done right, business continuity and disaster recovery plans can reduce both business interruptions and insurance premiums, lower the personal liability of management, and identify outdated and cost-inefficient controls. In other words, companies that use BCM have one less thing to worry about.

Learn more about the business continuity management by exploring these related resources on KnowledgeLeader: 

• Business Continuity Programs: Important Information on How to Perform Audits You Need to Know 
• Business Continuity Management Audit Report 
• Business Continuity Management Leading Practices