Business interruption is an exposure common to all businesses regardless of type or size. Loss of critical functions caused by fires and explosions, earthquakes, windstorms, bomb threats, hazardous waste spills, workplace fatalities, product tampering, terrorism, and other serious risks can drive a company right out of business. Yet according to the research firm Gartner, fewer than 30 percent of the Fortune 2000 companies actually have a full business continuity plan in place, one that extends beyond their IT environment.

The impact of a business interruption increases as organizations rely on efficiencies such as just-in-time delivery systems and single-supplier arrangements. Both impact an organization's ability to respond to an event by reducing their flexibility. An organization's share price, profits, and even corporate reputation can be damaged by an interruption. To limit the loss of earnings, many companies obtain insurance coverage. However, traditional insurance is not always enough to protect a company's reputation and market share. Managing the risk of business interruption requires strategies to both prevent the occurrence and to reduce its impact.

What Will You Say When They Ask What Happened?
Understanding your business is key to determining which processes are critical to maintaining operations. And understanding the financial impact of downtime will help you determine your recovery objectives — whether it is 60 seconds, three hours, or three days. In order to determine whether or not your company will survive an event, executives should be dealing with questions like:

• Do you know where your organization is vulnerable to a business interruption? The potential financial impact of a major interruption?
• Do you have a business continuity planning team that includes information technology, security, and your critical business and administrative functions?
• Have you determined the recovery time objectives for your organization?
• When was the last time you tested, reviewed, and updated your business continuity plans?
• Has your organization experienced any major changes over the past year, i.e., mergers and acquisitions, adding or eliminating a facility, additional product lines?
• Do you fully understand the regulatory requirements that impact your organization's business continuity plans? What steps have you taken to be in compliance with these requirements?
• Have you integrated the business continuity philosophy into your organization's culture?
• Do your employees know their roles and responsibilities in the event your business is interrupted?
• Have you reviewed the business continuity plans of your vendors/suppliers? Have you incorporated their recovery objectives into your service level agreements?
• Do you know what happens to the flow of data into and out of your organization in the event of an interruption?

• Work with your business managers to pinpoint the critical processes and interdependencies (both internally and externally) and develop a plan to keep them operational in the event of a disruption
• Conduct a business impact analysis to quantify and protect against the loss of key business functions
• Formulate a recovery plan that prioritizes business functions and provides a logical schedule for bringing people and functions back on line
• Pinpoint the gaps that exist between your current state desired state of readiness, and build a strategy to address these gaps. Once built, we can help you test and implement your recovery strategies.

If you have any questions or would like additional information, please contact us.

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