Business continuity planning (BCP) is often somewhere towards the bottom of a business’ “to-do” list, and tends to stay there. 2020 has brought into sharp focus the need for BCP to jump off the list and into practice. If you haven’t re-evaluated most aspects of how your business works in the light of COVID-19, now is a good time to start.
You may be thinking, just let me get over this crisis, before I worry about how to cope with the next one. But a continuity plan is best put together in ‘peacetime’ – it’s too late once the next disaster hits.
Survival can often depend on a single factor: preparation. A robust business continuity plan can help you cope more easily when a crisis arrives, and minimise the damage your business could suffer. It allows you to be better placed to take advantage of any economic opportunities, either during or after the crisis.
So what exactly should a best-practice BCP entail, and how can you prepare well for the next shock to the system? There are various off-the-shelf BCPs available through risk management consultancies. Whether you decide to go that way, or build your own, the key elements will include:
- Alternative or additional supply chain options.
- Coronavirus caused huge disruption to supply chains and logistics, leaving thousands of businesses unable to access materials and products. Typically the main focus would be supplier pricing. Now it has to be supply chain resilience.
- Robust digital technology.
- Having video conferencing, mobile, and other technology solutions that help you operate flexibly while allowing staff to work from home, is vital. There’s anecdotal evidence to suggest that companies with cloud computing models fared better than those who had in-house data centres and solutions. Consider looking at improvements to ICT infrastructure to enable your operation to be more agile and flexible, ready for when incidents or disasters happen.
- Good communication.
- Having strong channels of communication, both with customers and with staff, is essential. You need to be able to continue to engage with customers, and prioritise activity for staff. Add to this managing any emergency responses, and pivoting if you need to. Provided communication lines are kept open, and staff are across the plan and understand their responsibilities, it will make your job so much easier.
- Scenario planning.
- Do some cashflow scenario planning, and review your working capital requirements. Do you know how long your current cash reserves will last? You may need to borrow, or top up your loan to manage short term cash flow challenges.
- Adapting to social changes.
- Working from home is the most obvious social change that may become permanent as a result of COVID-19. The use of cash has declined dramatically in favour of tap and go. The pandemic has also given us ‘social distancing’ and made regular hand washing and sanitising second nature. Factor other such potential crisis evolutions into your BCP, making sure your business has the technology or ability to respond to them.
Finally, think strategically. If your business has a strong balance sheet and good capital position, this could be a good time to think about mergers and acquisitions.
Putting a BCP in place will bring benefits over and above preparing your company for future negative events. It will almost certainly mean you learn more about your business, and maximise your chances of success.