| Many years ago, I worked for a small insurance | | | | product developer, web site manager and so on. |
| company. Just like many other businesses, we | | | | In such a case, that person represents a single |
| shut down operations for the Christmas holiday. | | | | point of failure. What happens to your business if |
| As it happens, this one eventful year Christmas | | | | something happens to that person? For instance, |
| fell on a Monday. The company gave their | | | | if your product derives from the efforts of one |
| employees the preceding Friday off as well, | | | | person, do you have a way to mitigate the |
| thereby granting a fourday holiday. | | | | effect of that person no longer being available? |
| The weather that Christmas season was bitterly | | | | Can you overcome such a fatal flaw? |
| cold, as is normal for that part of Virginia. The | | | | Do you keep all your accounting, customer and |
| building maintenance staff turned off the heat in | | | | financial records in a one place? Do you have |
| our 7-story building to save costs. Unfortunately, | | | | backup records in an offsite location? What would |
| they neglected to turn off the water. I received a | | | | happen to your business if there were a fire, |
| call Sunday afternoon informing me there was a | | | | flood, earthquake, or other circumstance that |
| serious problem. Apparently, a major water pipe | | | | destroyed those records? Do you have a plan in |
| had ruptured on the upper floor. | | | | place to recover from such an event? It amazes |
| When I arrived at the building there were literally | | | | me the number of people who don't back up their |
| large sheets of ice emanating from all the | | | | computer or paper records. If the hard drive on |
| windows and cascading down the sides of the | | | | your computer failed, could you continue your |
| building. Upon entering, I could see just how | | | | operations? |
| disastrous this ruptured pipe, unattended for | | | | Do you keep your inventory of products in a |
| several days, was going to be. The ceiling tiles on | | | | single location? What would happen if you |
| every floor had broken away and fallen into the | | | | experienced a fire or flood in that location? Would |
| work areas. All the desks, file cabinets, computer | | | | you have a way to quickly replenish your stock? |
| equipment, furniture and so on were covered in | | | | Would you be able to continue to fulfill orders in a |
| debris, ice and water. | | | | timely fashion? If the answer is no, you have yet |
| We obviously had no choice but to turn the heat | | | | another single point of failure. |
| back on in order to melt the ice. As the ice | | | | In U.S. Gulf Coast area where my wife and I live, |
| melted it just further compounded the water | | | | we are at the mercy of hurricanes each year. In |
| problem. Most floors in the building had a foot or | | | | the case of Hurricane Ivan and Hurricane Katrina, |
| more of standing water. The water damage to | | | | we lost our power and phone service for nearly a |
| file folders and documents, electronic equipment, | | | | week. If something like that happened to you, do |
| furniture and everything else in the building was | | | | your customers have a secondary way to |
| devastating. | | | | contact you, or you to contact them? Do you |
| It took many months to completely recover | | | | provide your customers with a cell phone number |
| from what we later referred to simply as "the | | | | where they can reach you? Is there some local |
| incident". Many important insurance documents | | | | facility (e.g., library, Internet café) where |
| were permanently lost. Much of the computer | | | | you could go to check your email? |
| equipment and other electronics were damaged | | | | EXTERNAL CONSIDERATIONS |
| beyond repair. | | | | If you purchase your product or raw materials |
| Unfortunately, the company had made no plans | | | | from a wholesaler, is that company your one and |
| for such a disaster. There was no way to quickly | | | | only source? What happens to your business if |
| move data processing requirements to a backup | | | | that company has a fire, flood, or folds its tent? |
| location. There was no offsite storage for the | | | | Do you have a secondary source you can quickly |
| microfilm records used to back up the paper | | | | switch to? With the company I ran many years |
| documents. Most of the microfilm, stored in metal | | | | ago, I primarily used three distributors as the |
| canisters, survived. However, the majority of | | | | source for most of my products. But I also had |
| microfilm readers didn't since electronics and | | | | arrangements with several others I could utilize if |
| water just don't mix. | | | | necessary. These companies had my Tax ID, |
| The company ultimately survived, but just by a | | | | reseller, and other information already on file. If I |
| thread. We were unable to process premium | | | | had to make a switch, that switch would have |
| payments for weeks, and many people who | | | | been virtually seamless from the perspective of |
| were expecting insurance payments did not | | | | my customers. |
| receive them in a timely manner. It was, to put it | | | | Are you dependent on a single carrier for your |
| bluntly, a complete and total mess. | | | | product delivery? What happens to your ability to |
| Business Continuity is one of those topics that | | | | deliver your product if members of that carrier |
| just doesn't receive the level of discussion it | | | | go on strike? It happens. Just as with your |
| requires. Too many business owners completely | | | | suppliers, do you have a contingency plan for |
| ignore it altogether. That can be a fatal mistake, | | | | moving to a backup carrier if needed? |
| as it nearly was for the company I once worked | | | | What about the company that hosts your web |
| for. | | | | site? This is a critical consideration if your primary |
| Business Continuity is all about planning for the | | | | sales vehicle is via online means. What happens to |
| unforeseen events that can occur. Many people | | | | your business if that hosting company has a fire |
| also call it disaster planning or contingency planning. | | | | or flood? Do they have a contingency plan in |
| No one likes to think about such eventualities, but | | | | place to move operations to an offsite location? If |
| as the saying goes, "stuff happens". | | | | they don't, do you have a way to quickly move |
| Developing a business continuity plan involves | | | | to another hosting service? What happens if they |
| making a thorough review of your overall | | | | go out of business? Do you have backups of |
| business structure and identifying potential weak | | | | your own web site (including your shopping cart |
| links in that structure. Some of these weak links | | | | order database) that you could move? Can you |
| are internal to your business, while others are | | | | quickly move your site to another hosting |
| external. A good business continuity plan will | | | | service? |
| examine the entire range of "what if" scenarios | | | | DUE DILEGENCE |
| that could adversely affect your business, and | | | | As I said, this list is not meant to be all-inclusive. |
| then identify possible contingencies. | | | | Much depends on your particular business |
| Every aspect of your business needs to be | | | | operations. But you do need to consider the |
| considered: ownership, product or raw material | | | | possibilities, and their potential adverse impact. |
| sources, sales mechanisms (web site, storefront, | | | | Consider all the possibilities. |
| et cetera), distribution chains, customer support, | | | | My recommendation would be to develop a |
| accounting, financial reporting, and so on. | | | | document to define your plans and courses of |
| Of course, these "what if" scenarios will be | | | | action for business continuity. It doesn't have to |
| different for every business. It would be | | | | be complicated; three columns is all you need: |
| impossible for me to account for every possible | | | | 1) Potential disaster scenarios (internal and |
| manifestation in this article. Instead, I will discuss | | | | external), |
| some of the more commonly overlooked things | | | | 2) Potential impact on your business (you can use |
| that can happen. It will be up to you to | | | | a 1-5 rating system for this - 1 being low impact, |
| extrapolate from that discussion in order to | | | | 5 being catastrophic) |
| identify potential fatal links within your own | | | | 3) Contingency Plan |
| business environment, and develop appropriate | | | | Obviously, the higher the impact rating, the more |
| contingency plans. I can only ask the questions. | | | | important it is to define a contingency plan. But |
| INTERNAL CONSIDERATIONS | | | | don't just ignore it. Your business can survive |
| Is your business dependent on a single key | | | | many disaster situations, but only if you plan |
| person? Such a person could be the owner, | | | | ahead. |