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Contingency Planning

Business contingency planning, also known as business continuity planning, involves identifying potential risks to a company's operations and developing alternative plans to enable operations to continue with minimal disruption in an emergency. The key aspects of contingency planning are identifying worst-case scenarios, developing backup plans to address these scenarios, and ensuring plans can be quickly implemented to allow the business to continue operating in an orderly manner with minimal inconvenience or loss of revenue. Contingency plans should cover a variety of potential disruptions including disasters, competition, critical supplier or customer losses, and technology or infrastructure failures.

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Jacqueline Thompson
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461 views

Contingency Planning

Business contingency planning, also known as business continuity planning, involves identifying potential risks to a company's operations and developing alternative plans to enable operations to continue with minimal disruption in an emergency. The key aspects of contingency planning are identifying worst-case scenarios, developing backup plans to address these scenarios, and ensuring plans can be quickly implemented to allow the business to continue operating in an orderly manner with minimal inconvenience or loss of revenue. Contingency plans should cover a variety of potential disruptions including disasters, competition, critical supplier or customer losses, and technology or infrastructure failures.

Uploaded by

Jacqueline Thompson
Copyright
© © All Rights Reserved
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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BUSINESS

CONTINGENCY/CONTINUITY
PLANNING

Business Contingency
Planning
Contingency planning is a systematic
approach to identifying what can go wrong in
a situation
It

is also known as a worst-case scenario


plan, backup plan, or a disaster recovery plan

The

contingency plan is a secondary or


alternative course of action that can be
implemented in the event that the primary
approach fails to function as it should

Business Contingency
Planning
Contingencies are relevant events anticipated by
a planner, including low-probability events that
would have major impacts.
Contingency

planning is a "What if?" skill which


is important in all types of planning domains, but
especially in contested and competitive domains

Plans

of this type allow businesses to quickly


adapt to changing circumstances and remain in
operation with very little inconvenience or loss of
revenue

Business Contingency
Planning

The objective of contingency planning


is not to identify and develop a plan for
every possible contingency.
That would be impossible and a terrible
waste of time.
Rather, the objective is to encourage
one to think about major contingencies
and possible responses.

Business Contingency
Planning
For example,

If a business depends heavily on telephone


communications to conduct business, the
contingency plan may be to create a secondary
wireless network that can be activated in the
event that the public telephone lines are
disabled by some type of disaster.

Ideally,

the cut over to the wireless network


would be seamless, and not interfere with
communications for more than a moment or
two.

Business Contingency
Planning
The following questions can help
develop
contingency plans:

What

events may occur that require a


response?
What disasters might happen during
execution of the plan?
What is the worst case scenario of events
for the situation?
What scenarios are possible for the
situation?

Business Contingency
Planning

What event would cause the greatest


disruption of current activities and plans?
What happens if costs of the plan are
excessive? what happens if delays occur?
What if key people leave the organization?
What are the expected moves of
antagonists and competitors?
Who or what might impede
implementation of the plan?

Business Contingency
Planning
The plan allows the day to day operations of
the business to continue without a great
deal of interruption or interference.

Next,

the backup plan is capable of


remaining functional for as long as it takes to
restore proper function of the primary plan.

Last,

the emergency plan minimizes


inconvenience to customers, allowing the
business to continue providing goods and
services in an orderly and time-efficient
manner.

Business Contingency
Planning
If an organization's main facility or Information
Technology assets, networks and applications
are
lost, an alternate facility should be available.
There
are three types of alternate facility:
1. Cold

site is an alternate facility that is not


furnished and equipped for operation. Proper
equipment and furnishings must be installed before
operations can begin, and a substantial time and
effort is required to make a cold site fully
operational. Cold sites are the least expensive
option.

Business Contingency
Planning
2. Warm site is an alternate facility that is
electronically prepared and almost
completely equipped and furnished for
operation. It can be fully operational within
several hours. Warm sites are more
expensive than cold sites.
3.

Hot site is fully equipped, furnished, and


often even fully staffed. Hot sites can be
activated within minutes or seconds. Hot
sites are the most expensive option.

Contingency Planning Can Be


Applied To:
Disasters
Competition
Missed Forecasts
Critical Vendors loss (Sole Sourcing)
New Products
A Critical Customer Loss
Computer Failure/Data Loss/Viruses

Business Contingency
Planning
Some other totally unexpected causes can also

cause significant business interruption which


could be disastrous to the corporations are:
Civil Unrest,
Sabotage,
Terrorist Activities,
Power Grid Failure,
Telephone Failure,
Other Utilities (i.e. gas),
Inclement Weather,
Asbestos, or
Equipment Failure.

Objectives of BCP
To

ensure continuity and survival of the business,

To

provide protection of corporate assets,

To

provide management control of risks and

exposures,
To

provide preventative measures where

appropriate,
To

take proactive management control of any

business interruption.

What To Do When A
Disruption Occurs
Disruptions are handled in three steps:
Response
Continuation of critical services
Recovery and restoration

Steps to Effective Business


Plan for a wide
range of possible
Continuity
Planning

scenarios Downtime (whether it is a result


of a hurricane, fire, power outage, hardware
failure, or human error) affects your IT
infrastructure and ultimately your
productivity and bottom line

Understand

your time and data


requirements Your company can balance
recovery requirements and risk tolerance,
and budget how much you are willing to
spend on a disaster recovery strategy

Steps to Effective
Business Continuity
Look to keep your people, systems, and
Planning
information connected

Your business continuity strategy must


encompass information, systems, people, and
processes, as well as the complex
interdependencies among them. If your
workforce cannot connect to systems and data,
there is no business.
Communicate
Make sure everyone in your company knows the
BCP. Hold mandatory training classes. You do
not want your non-critical staff driving through a
rain storm to get to a building that has been
damaged by fire then wondering what to do next.

Steps to Effective
Business Continuity
Identify critical documents. Articles of
Planning
incorporation and other legal papers, utility bills,

banking information, critical HR documents, building


lease papers, tax returns...you need to have
everything available that would be necessary to start
your business over again. Would you know when to
pay the loans on your company vehicles? To whom do
you send payment for your email services?

Steps to Effective Business


Continuity Planning
Identify

contingency equipment options


If your company uses trucks, and it is
possible the trucks might be damaged in a
building fire, where would you rent trucks?
Where would you rent computers? Can you
use a business service outlet for copies, fax,
printing, and other critical functions?

Identify

your contingency location. This is


the place you will conduct business while your
primary offices are unavailable. It could be a
hotel. Perhaps telecommuting for everyone is
a viable option. Wherever it is, make sure you
have all the appropriate contact information
(including peoples names).

Steps to Effective
Business Continuity
Plan and test. Planning involves much more
Planning
than just backing up your data. Many
companies think they have an effective
disaster recovery plan, but unless it is tested,
it is only a plan on paper and not in reality. It is
essential for your company to develop and
test your plan so the first time it is executed is
not during an emergency
Review and revise. Every time something
changes, update all copies of your BCP. Never
let it get out of date. An out-of-date plan can
be worse than useless: it can make you feel
safe when you are definitely not safe

Whats Your Contingency


Plan?
What

if your main supplier


suddenly goes bankrupt?

Or,

what if your entire sales force


gets sick with food poisoning at
your annual sales conference?

Or,

your payroll clerk simply calls


in sick on payroll day?

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