This post discusses business continuity management. In this post, you will understand the meaning, roles, importance, benefits and implementation of business continuity management.

WHAT IS BUSINESS CONTINUITY MANAGEMENT?

Business continuity management (BCM) is a framework for identifying organisations’ risk exposures, including internal and external threats. BCM is a critical process. It enables a firm to maintain normal business operations during a disaster with minimal disruption. BCM works on the principle that sounds response systems mitigate damages from theoretical events.

BCM is a holistic process to identify potential threats to an organisation and their impacts on its business operations and reputation. BCM entails the process of planning for disruptive incidents. Organisations undertake BCM by identifying potential threats and analysing their impact on day-to-day operations. Effective BCM ensures that organisations can provide good service during a disaster, helping them preserve their reputation and keep revenue coming in.

BCM system emphasises the importance of:

1. Understanding continuity and preparedness needs and the necessity for establishing business continuity management policy and objectives;
2. Implementing and operating controls and measures for managing an organisation’s overall continuity risks;
3. Monitoring and reviewing the performance and effectiveness of the business continuity management system; and
4. Continual improvement based on objective measurements.

THE NEED FOR BUSINESS CONTINUITY MANAGEMENT

Why is the need to ensure business continuity now more significant than ever? Businesses should appreciate the need for BCM for several reasons, including:

1. Rapid technological advancement

2. Increased reliance on telecommunications

3. Globalisation

4. Increased supply chain risk

5. Climate change and weather-related events

6. Impact of significant events and risks

HOW BUSINESS CONTINUITY MANAGEMENT WORKS

Regardless of how a company has been in business, unforeseen events (such as natural disasters, power outages, fires, or cyber-attacks) can disrupt its business processes. The critical task of a BCM is to minimise the resulting damage, identify potential sources of risk in advance, and prepare a company for such crises. Business continuity planning is a form of insurance. It gives organisations the comfort of knowing that, even if disaster strikes, the damage won’t be overwhelming.

Business continuity can be tailored to help organisations prepare for any number of disruptions, including:

• Natural disasters, such as earthquakes and hurricanes;
• Man-made disasters, such as road and rail disruptions;
• Technological failures, such as corrupted files;
• Human error, such as data exposure or a lost USB;
• Infrastructural damage, such as a burst pipe or an electrical fire;
• Sabotage, such as stolen files or damaged equipment; and
• Cyber-attacks, such as ransomware.

THE BENEFITS OF BUSINESS CONTINUITY MANAGEMENT

Implementing a BCM ensures that business processes remain operational during a disruption. However, there are several benefits of BCM to business organisations. 

Here are some of the benefits of BCM for businesses: 

1. Protect a firm’s reputation

2. Boost employee morale

3. Ensure good relationships with third parties and subsidiaries

4. Compliance with regulatory requirements

BUSINESS DRIVERS OF BUSINESS CONTINUITY MANAGEMENT

A business driver is a measurable resource that drives a business’ performance to achieve maximum profits. Regulatory and legislative compliance are the leading drivers for business continuity planning. For a publicly listed company, compliance satisfies stock exchanges. It eases the anxiety of investors, bringing more capital into the business. 

Here are some business drivers of business continuity management:

1. Survival

2. Regulatory and legislative compliance

3. Financial and reputational factors

4. Corporate governance

5. Business resilience

6. Customers

7. Capacity to survive a disaster and restore the business to normalcy

8. Employees

9. Business process optimisation

10. Business impacts

11. Competitive advantage

BUSINESS PLANS

There are several types of business plans. Here are five primary types of business plans: 

1. Crisis Management or Incident Management Plan 

2. Crisis Communications Plan 

3. Emergency Response Plan 

4. Information Technology (IT) Disaster Recovery Plan

5. Business Continuity (Recovery) Plan

COMPONENTS OF A BUSINESS CONTINUITY PLAN

A robust business continuity plan means a business is more likely to react confidently and quickly during a disruption. This can help ensure customer satisfaction, improve team confidence, and reduce recovery. To achieve this, every business continuity plan must include five essential elements. 

Here are the five critical components of a business continuity plan:

1. Risks and potential business impact

2. Planning an effective response

3. Roles and responsibilities

4. Communication

5. Testing and training

BUSINESS CONTINUITY MANAGEMENT LIFECYCLE

What does business continuity management look like? BCM should cover the entire enterprise to enhance a firm’s resilience. BCM should be integrated into the risk management lifecycle.

BCM lifecycle consists of a 10-step process. Here are the steps of a BCM lifecycle:

1. Oversee and implement resilience, continuity and response capabilities;

2. Align business continuity management elements with strategic goals and objectives;

3. Develop a business impact analysis to identify critical functions, analyse interdependencies, and assess impacts;

4. Conduct a risk assessment to identify risks and evaluate the likelihood and impact of disruptions;

5. Develop effective strategies to meet resilience and recovery objectives;

6. Establish a business continuity plan that includes incident response, disaster recovery, and crisis/emergency management;

7. Implement a business continuity training programme for personnel and other stakeholders;

8. Conduct exercises and tests to verify that procedures support established objectives;

9. Review and update the business continuity programme to reflect the current environment; and

10. Monitor and report business resilience activities.

BUSINESS CONTINUITY MANAGEMENT (BCM) LIFECYCLE GUIDELINES

A well-thought-out business continuity management (BCM) plan is the answer which will help to keep a company moving in such unforeseen circumstances. The business continuity management lifecycle has six phases to it: 

1. Programme management, 

2. Understand the organisation, 

3. Determine the BCM strategy, 

4. Develop and implement a BCM response, 

5. Exercise the response, and 

6. Maintain, review and embed BCM in the organisation’s culture. 

Awareness and training should happen at every stage. Here are the six steps of a business continuity management lifecycle: 

Step 1: Top Management Commitment 

Step 2: Communicate business continuity management policy

Step 3: Identify who is responsible for implementing BCM policy 

Step 4: Analyse the primary impacts of critical functions

Step 5: Update the plans to eliminate gaps 

Step 6: Implement and monitor plans

HOW TO IMPLEMENT A BUSINESS CONTINUITY MANAGEMENT SYSTEM

A BCM system consists of six elements. The six interrelated elements must be considered when implementing BCM in a company. Here are the six aspects of a BCM system: 

1. BCM Policy and Governance 

2. Business impact analysis

3. Contingency plan 

4. Crisis management

5. Tests and exercises

6. Continuous improvement

THE BUSINESS CONTINUITY MANAGEMENT PROCESS

Effective business continuity management (BCM) is a significant risk management activity. BCM improves the resilience of organisation activities. Here are the 5 phases of a BCM process:

Phase 1: Understanding your organisation

Phase 2: Defining your Business Continuity (BC) Strategy

Phase 3: Choosing and Implementing Business Continuity (BC) Solutions

Phase 4: Testing, Maintaining, and Reviewing Business Continuity (BC) Arrangements

Phase 5: Developing Business Continuity Culture (BCC)

BUSINESS CONTINUITY MANAGEMENT FRAMEWORK

The business continuity management (BCM) framework entails the planning process for developing plans and procedures to enable organisations to respond promptly to unpleasant events. 

Here are the essential aspects of the BCM framework:

 1. Policies and strategies

2. Business impact assessment

3. Risk assessment

4. Validation and testing

5. Incident identification

6. Disaster recovery

7. Roles of communication in business continuity management

8. Resilience and reputation management

BUSINESS CONTINUITY METRICS

Metrics are ways of measuring the completion of tasks within a business continuity programme and showing resilience capabilities. There are two business continuity metrics: 

1. ACTIVITY AND COMPLIANCE METRICS

Activity and Compliance Metrics answer the question: Are we doing the right things to prepare? These are straightforward metrics and usually, ensure that programme deliverables and outcomes are on track and consistent with expectations. Some organisations call this metric a Key Performance Indicator (KPI).

2. PRODUCT AND SERVICE METRICS

Product and Service Metrics answer the question: Are we prepared? These metrics help programme leadership focus on evaluating the company’s ability to continue or recover time-sensitive activities and resources that contribute to the delivery of products and services. Some organisations call this metric a Key Risk Indicator (KRI).

 Sound BCM helps build organisational resilience, hence the need to discuss organisational resilience. 

ORGANISATIONAL RESILIENCE

Business continuity planning evolves from crisis management. Organisational resilience is broader than business continuity planning. Business continuity planning is a vital aspect of BCM. BCM focuses mainly on the speedy recovery of organisation operations after a disaster or an untoward event. Organisational resilience involves a broader scope of organisation activities and market operations, including supply and distribution chains, investors, brands and customers. This indicates that BCM constitutes an essential part of organisational resilience; hence, BCM plays a vital role in building organisational resilience. There are four main types of resilience: individual, community, corporate, and sectoral resiliencies. 

Resilience is the ability of an organisation to envisage critical events from emerging trends, continuous adaption to changes, and speedy recovery from disaster. A resilient organisation is a firm that can achieve its objectives and maximise its opportunities, regardless of business interruption and untoward events. Resilient organisations are learning firms committed to managing critical situations and emerging trends to ensure the quick recovery of essential business activities after unfavourable circumstances. In essence, a resilient organisation can envisage and foresee events that are likely to occur, which may harm the organisation’s activities and operations. 

Organisational resilience is vital because the business environment in which organisations operate is dynamic; hence, the need for firms to build organisational resilience to ensure continual existence and growth. Moreover, modern-day companies are impacted by socio-political issues, emerging risks, technology advancement, environmental factors, political instability, global financial crisis, sectoral reformation, and large-scale mergers and acquisitions. 

Having explained BCM and its features, it is necessary to consider this question: What is the difference between enterprise risk management (ERM) and business continuity management (BCM)? Before discussing the difference between ERM and BCM, let us explain enterprise risk management (ERM). 

What is Enterprise Risk Management?

Enterprise risk management (ERM) is a holistic framework for managing organisational risk. Organisational risk is a broad term. It can encompass concerns ranging from ensuring employee safety, securing sensitive data, meeting statutory regulations, and stopping financial fraud. Risk can be internal, such as equipment malfunctions, or external, such as natural disasters. Risk varies from one organisation to another. The fundamental elements of ERM are the assessment of significant risks and the implementation of suitable risk responses. See the post on Enterprise Risk Management (ERM).

ENTERPRISE RISK MANAGEMENT (ERM) VS BUSINESS CONTINUITY MANAGEMENT (BCM)

Enterprise risk management and business continuity management are closely related. The relationship between Business Continuity and Risk Management depends on the organisation. In most cases, Business Continuity is a sub-domain of Risk Management. Suppose there is an existing Enterprise Risk Management framework in the organisation. Can the company use that in its Business Continuity Planning? Or, Should the company create a new Risk Register and Risk Assessments for each department inside the Business Continuity Plan?

Risk is the central issue in both ERM and BCM. However, Enterprise Risk Management, especially in large businesses, can be focused on direct and indirect impacts on satellite operations. The best approach combines the top impacting risks from Enterprise Risk Management and environmental impact analysis. 

BCM and ERM complement one another and are necessary for today’s high-risk business environment. ERM and BCM share the common goals of identifying, assessing, and managing interruption risks that could serve to prevent the achievement of their strategic objectives.

Enterprise risk management (ERM) focuses on processes developed before a disaster to protect a company from risks by identifying and defining vulnerabilities to minimise their probability. On the other hand, business continuity management (BCM) is about processes designed to be enacted after a disaster. Business continuity management is maintaining business operations during or after a disaster, executed through business continuity plans.

What is a Business Impact Analysis?

Business Impact Analysis (BIA) is a significant aspect of Business Continuity Management (BCM). Business Impact Analysis (BIA) identifies, quantifies and qualifies the business impact of a loss, interruption or disruption of business activities on an organisation and provides the data from which appropriate business continuity strategies can be determined. 

A BIA is a crucial aspect of a business continuity process that analyses mission-critical business functions to identify and assess a company’s risk exposures. A BIA helps to identify potential threats at strategic, tactical and operational levels in an organisation. BIA enables an organisation to understand its critical activities and resources needed to support its essential products and services, understand threats, and select appropriate risk treatments.

See the video on Business Continuity Management: https://youtu.be/H3a_x3KunHE