What Is a Business Continuity Plan?

A business continuity plan (BCP) is an invaluable tool: a structured framework that supports companies in ensuring their business operations can continue during disruptions and recover from them effectively. These plans cover continuity in a range of circumstances, from cyberattacks to global pandemics.

As a result, BCPs play a key role in sustainable business success and are essential components of effective risk management, operational resilience, and long-term stability of the organization.

Given how vital this tool is, we’ve developed this article to provide companies with practical insights into BCPs. We’ll define what a BCP is, explain its key components, outline the planning process, and touch on its global relevance. Indeed, this article takes a global approach to all aspects, rather than being limited to a single industry or region; ensuring the insights are useful wherever in the world you operate. 

Defining a Business Continuity Plan

Simply put, a business continuity plan is a strategy that outlines exactly how an organization can keep its essential operations functioning during a disruptive event. 

A BCP shouldn’t be confused with disaster recovery or crisis management planning. Disaster recovery focuses largely on how to restore essential information technology (IT) and data systems during a disruptive event. Crisis management is centered on the immediate handling of incidents, which can be physical, operational, or reputational in nature.

BCPs are broader in scope than either of these tools, considering a range of potential disruptive influences and how they affect wider operations. Indeed, BCPs have the distinct objectives to protect assets, minimize downtime, and safeguard key stakeholders, no matter what type of disruption the organization faces.

Importance of Business Continuity Planning

For modern organizations, continuity planning is essential for a number of reasons. Primarily, companies today face a wider range of threats than ever before, making effective continuity planning key to reducing vulnerabilities. 

Additionally, by failing to have a clear strategy in place, there are likely to be significant consequences in the event of disruption. These can include:

• Financial losses – From both the lost business during disruption events and the additional costs required to overcome the disruptions without planning or resources, potentially leading to the need for corporate turnaround consulting. 
• Reputational damage – Without the ability to continue operating during disruptive events, companies can find their credibility drops in the eyes of customers, supply chain partners, and the wider public.
• Operational breakdowns – A lack of business continuity planning can cause operations to grind to a halt, impacting productivity, profitability, and employee engagement. This is especially important in relation to answering the question of “What is operational efficiency?”

There are also significant benefits to having a solid business continuity plan. Firstly, it makes an organization more robust and resilient, helping it to withstand the challenges of the contemporary business landscape. It can also support planned disruptions, alongside plans related to establishing what is change management. The reliability that BCPs support also tends to boost customer trust in an organization, enhancing engagement. A good BCP can also be a foundational part of regulatory compliance measures.

Key Components of a Business Continuity Plan

While plans can vary depending on the specifics of the organization or the industry it operates in, there are some components that are relatively consistent. These include:

• Risk assessment and business impact analysis – This involves businesses carefully auditing to identify the potential threats of disruption their organization is likely to face.
• Recovery strategies – Once the risks have been assessed and identified, organizations must establish processes that ensure the disrupted operations can resume as soon as possible.
• Roles and responsibilities – Clarity must be provided on which leaders will spearhead specific parts of the plan and who will form immediate response teams. 
• Communication plans – A BCP will include protocols for both internal and external communications. This will focus on methods and lines of communication with employees and supply chain partners. It will also formalize how to keep customers informed.
• Testing and maintenance – The plan must be regularly tested to ensure it is effective and continues to be fit for purpose. The BCP must also be updated periodically.

The Business Continuity Planning Process

In line with ensuring the key components are in place, the business continuity planning process follows a structured sequence.

Step 1 – Risk Identification

Natural, technological, and human-made risks are assessed for their potential to disrupt operations. This may be performed by internal staff or with the assistance of external consultants.

Step 2 – Business Impact Analysis (BIA)

The identified risks are assessed to better understand how they might disrupt operations. This will also examine potential consequences on productivity, revenue, compliance, and stakeholder relationships.

Step 3 – Developing Strategies

Protocols will be developed to maintain or restore operations in the event of each type of disruption. These strategies are likely to be not just event-specific, but also relevant to each department that may be affected.

Step 4 – Creating the Plan Document

Once strategies have been formulated, they will then be formalized in company documentation. Alongside the procedures for continuity, it will also outline the responsibilities certain leaders and staff members have.

Step 5 – Training and Awareness

Organizations must ensure that leaders and employees alike understand protocols in the BCP that are relevant to them. This involves conducting regular training and awareness sessions on executing the plan.

Step 6 – Testing and Reviewing

Companies must regularly test all aspects of the BCP to ensure it continues to be relevant and effective. This is usually done through drills of each protocol, with results influencing any required updates.

Business Continuity Plan vs. Disaster Recovery Plan

BCPs and disaster recovery plans are related, but they serve distinct purposes. A disaster recovery plan (DRP) specifically focuses on restoring IT systems and implementing data recovery mechanisms. A business continuity plan, on the other hand, covers the restoration to operational activity over the entire organization. 

Both of these elements are necessary parts of comprehensive organizational resilience. They each support one another’s objectives, enabling a company to both overcome short-term issues and respond effectively to long-term risks of disruption.

Examples of Business Continuity Plans in Action

It can be helpful to consider examples to better understand the practical value of a business continuity plan. 

For instance, during the COVID-19 pandemic, healthcare organizations that had robust BCP protocols in place could respond more effectively to disruption. They were able to adapt with tools like remote appointments and implement regular testing protocols to prevent further disruption. 

Similarly, manufacturers with BCPs in place could respond to supply chain issues effectively during the pandemic. These organizations had planned more diverse sources of materials, which enabled them to effectively pivot when there were disruptions in the chain. This also taught less prepared manufacturers lessons about how essential BCPs are to mitigating not just productivity issues, but adapting to unexpected demand. 

Challenges in Business Continuity Planning

It’s also vital to be mindful of some challenges to solid planning, in order to effectively recognize and mitigate them. These include:

• Lacking awareness and support – When there is not enough awareness of the importance of BCPs or support from leadership, this can lead to inadequate time being allocated to it and poor prioritization practices.
• Limited resources – Budget constraints and limited resources is a common challenge for small businesses, as it can prevent comprehensive strategies from being built.
• Failure to update – Neglecting to regularly update plans over time can see them becoming less relevant or effective.
• Balancing efficiency and preparedness – Some companies prioritize short-term operational efficiencies over long-term resilience. Finding the balance between these aspects is essential.

Global Relevance of Business Continuity Planning

The business landscape today is more globally connected and accessible than ever. This also means that risks in one part of the world can affect companies in a different region. Therefore, BCPs must be developed to be relevant across borders and even industries that could affect operations.

Indeed, continuity planning is increasingly recognized as a universal requirement for promoting resilience and mitigating risks in international business. More companies are utilizing international standards, such as ISO 22301, which is a globally-recognized framework for managing continuity and ensures there is consistency of approach across borders.

FAQs

What is a business continuity plan?

It is a structured strategy that ensures business operations can continue during and after disruptions.

Why is business continuity planning important?

It strengthens resilience against risks, protects operational stability, and mitigates financial and reputational consequences.

What are the main steps in planning business continuity?

Risk assessment, business impact analysis, recovery strategy development, and testing processes.

How often should a business continuity plan be updated?

It is usually best to review and update practices annually or whenever key operational changes occur.

What is the difference between a business continuity plan and disaster recovery?

A disaster recovery plan is IT-focused, while a BCP covers wider operations.

Who is responsible for business continuity planning in an organization?

Senior executives and continuity officers typically lead efforts, supported by cross-functional response teams.

References

ISO. (2019). ISO 22301:2019. ISO. https://www.iso.org/standard/75106.html 

Krahulec, J. (2015). BUSINESS IMPACT ANALYSIS IN THE PROCESS OF BUSINESS CONTINUITY MANAGEMENT. ResearchGate. https://www.researchgate.net/publication/277900650_BUSINESS_IMPACT_ANALYSIS_IN_THE_PROCESS_OF_BUSINESS_CONTINUITY_MANAGEMENT