You never want to imagine the worst happening to your business – but what if it does? A natural disaster may seem unthinkable, but as a business owner, thinking about the impacts of one needs to be part of your job. Help secure your company’s future by creating business continuity and disaster recovery plans.
While there are differences between a business continuity plan (BCP) and a disaster recovery plan (DRP), some companies merge them into one plan.
“A business continuity plan is a defined, documented strategy designed to help business owners and their employees prepare for any event that may disrupt business operations, including natural disasters, single-building fires or floods, supplier outages, and more,” said Mick Whittemore, vice president of IT at Paychex.
A DRP, sometimes referred to as a disaster recovery policy, describes how to resume business operations quickly and is typically applied to details-level planning of an organization’s IT infrastructure and applications. The DRP should allow your IT team to recover enough data and system functionality to operate the business again.
These plans apply to both physical disasters, such as weather events, and virtual ones, like cyberattacks. In either instance, your business needs to be equipped to minimize the consequences.
To ensure your business can continue operating after a disaster, you need both a BCP and DRP. Your BCP and DRP work together to make sure all potential vulnerabilities are addressed so you can maintain continuity by keeping unaffected operations going while working on recovering to restore affected ones.
“With the proper planning, the loss can be a bit less devastating, and in some cases, you could even prevent certain damaging situations from happening,” said Jay Shelton, senior vice president of executive risk at Assurance. “A disaster restoration and business continuity plan can significantly reduce the effects of a loss.”
You can’t always avoid disasters, but you can prepare for them. Disaster recovery plans help recover what is lost, whether that is data from a cloud data center, physical property (e.g., office space in a hurricane) or something else.
Consider this scenario: A hurricane hits your region, flooding your data center. How will you get operations back up and running in a timely manner? What if you can’t? The longer your business is out of commission, the harder it will be for your company to survive. A thorough disaster recovery plan properly executed can mitigate the damage. Such a plan may not only save you money but also help ensure your company’s reputation emerges from the disaster unscathed.
To create a disaster recovery plan, you first need to decide what approach or strategy will form the framework of your policy.
Please note that due to the complexity of disaster planning, our advice is for small and midsize businesses only. If you work for a big company that has a lot of moving parts, we recommend contacting a disaster recovery specialist.
Once you’ve decided on your disaster recovery plan’s approach, begin tackling the specific components to build the plan. A good DRP should include the following elements.
A planning team: Establish a planning team of employees or volunteers who are responsible for the development of the plan.
A leadership execution team: Throughout your plan, specify who is responsible for executing the plan and assign a lead. In some cases, the entire company will be accountable, but to keep execution organized, always have a disaster recovery plan lead.
Goals and objectives: Identify goals and objectives for what your plan will accomplish. Establish answers to questions like, “Where do we relocate?” and “Whom should I partner with?” Your primary goal should be to have a solution for the issue.
Capabilities and hazards: Gather information about current capabilities and possible hazards and emergencies. Consider what the worst-case scenario would be. Also, consider something most businesses don’t think about – the recovery point objective, or RPO. RPO is the age of the files that need to be recovered from backup storage so your operations can continue as usual. The age of your files will affect your data backup strategy. Due to the complexity of this subject, consult an IT expert for assistance.
Action plans: Each type of possible disaster (such as fire, flood, earthquake or hacking) should have its own action plan. Each action plan should list the procedures to follow. In addition to an action plan, it’s essential to have a long-term recovery plan in place.
Written documentation: Include backup protocols and systems to ensure everyone on your team knows what needs to be done and can follow the outlined plan. Address the below questions so your plan is simple and easy to follow:
Employee training: All staff members, from management to maintenance, should understand your company’s disaster recovery plan. Integrate plans into company operations and employee trainings.
Testing and re-evaluation: Your disaster recovery plan is not complete after you create the initial plan. Testing and re-evaluation are critical parts of ensuring your policy will be effective. See where there is room for improvement, then weigh different plans of action to ensure disasters are handled in the best way possible.
Task certain employees with planning and leading your DRP, with a commitment to regularly test and revise the plan so it remains up to date.
Employee knowledge is integral to creating a successful business continuity plan and disaster recovery plan.
“Employees need to be informed about their roles and responsibilities in support of any recovery effort,” said Whittemore. “They should be trained when the BCP is first developed and then refreshed every year as the document is updated.”
Many companies use simulation exercises or drills to implement parts of the plan to ensure critical infrastructure is working. E-learning tools can be helpful as well, but the best practice is to simulate the plan at least once a year.
While existing employees benefit from training at the time the plan is created and during regular simulations, incoming employees need to be informed about the process too. New hires should be trained on the plan once they’re onboarded. You can even make it part of your onboarding checklist.
If your disaster recovery efforts don’t go according to plan, your company could immediately lose money. It could keep losing money until the disaster is resolved – or your business is forced into bankruptcy.
For example, let’s say you haven’t taken advantage of quick cybersecurity tips and fall victim to a cyberattack. This would be a digital and financial disaster: According to IBM, the average cost of a data breach in 2022 is $4.35 million. With a disaster recovery plan in place, you would quickly reactivate your IT systems and avoid or minimize losses.
But without a disaster recovery plan – or with a team that doesn’t follow it or carry it out correctly – you could be hundreds of thousands, if not millions, of dollars in the hole. The longer you remain unable to provide your services, the more your customers will seek them elsewhere. That long-term revenue and customer loyalty loss can be hard to recoup.
A disaster can happen at any time, especially when you’re not expecting it. When you create a disaster recovery plan and business recovery plan and train your team on them, you lessen the chances of disasters sidelining your business. It’s frustrating not to know when these disasters might be coming and how bad they’ll be. Preparing before there’s even a hint of a threat can help you keep the worst outcomes at bay.
Max Freedman contributed to the writing and reporting in this article. Source interviews were conducted for a previous version of this article.