Over the past year, the world has been shaken, destroyed, and rebuilt by the COVID-19 pandemic. Many businesses and individuals had to completely remodel their work structures to adhere to safety guidelines and keep their businesses afloat. While hindsight is 20/20, the pandemic has provided us with an opportunity to challenge our systems and create better, more expansive business continuity plans for the future.
What are Business Continuity Plans?
Business continuity plans are essentially a pre-determined process for when something goes wrong. It is a giant game of “What if___ happens? What do we do?” Businesses create plans for scenarios covering everything from natural disasters to a power outage. These plans address how the company will minimize losses and keep the business running as normally as possible. However, when COVID-19 hit, many companies were left floundering. Of course, one can argue that no one would ever plan for a year-long pandemic, but that is the whole point! These plans are designed to assume the worst and hope for the best.
How Well Did Business Continuity Plans Work During COVID-19?
When the pandemic hit, some businesses continued like nothing happened. Many companies that already had remote systems in place were only affected by a reduction in sales as everyone’s wallets tightened for a while. On the other hand, some businesses were left without a clue what to do and may have ended up shutting down.
A study performed by AvidXchange polled 500 U.S. companies about their business continuity plans. Of those companies, only 60% stated that they had concrete plans in place, with less than half of those plans accounting for emergencies occurring in multiple geographic locations simultaneously (i.e., like the pandemic). In addition, of those who had made continuity plans that crossed numerous locations, 46% of those plans would only be able to keep the business afloat for two to three weeks. Ouch!
How Can We Improve Our Plans for the Next Crisis?
After experiencing the effect of COVID-19, you can use your knowledge to create a better business continuity plan for not only another pandemic but other major crises. To do this, we suggest that you follow these steps:
1. Perform a Risk Assessment
When conducting a risk assessment, you should analyze what elements of your business are at a critical risk. “Critical risk” should be defined as “if this element fails, the business with implode.” Okay, maybe not quite that dramatic, but you get the point!
You need to analyze every component of your business, from the people involved to the technical systems to the legal regulations and more. After, list the elements from most critical to least critical and work your way down the list with Step #2.
2. Analyze Your Business Impact
Now that you have assessed your risk, you can analyze how it will affect your business. Play the “What if” game with every scenario under the sun and develop a variety of worst-case scenarios. How will these scenarios impact your business’s finances, required regulations, staffing, production efficiency, and even reputation?
Robinhood’s epic fail last year is a perfect example of how a disaster inadequately planned for can destroy a business. Robinhood’s app was down for days, significantly impacting their customers to the point where lawsuits were placed. You don’t want this to happen to you, so now that you have a head full of bad scenarios, it is time to build a plan.
3. Build a Plan
When you build a business continuity plan, you must take all risks and worst-case scenarios into account to create a stable and suitable system for each with clear instructions and guidelines that staff can quickly and efficiently perform even when under stress.
4. Test Your Plan
After building your plan, you must test it. Just like how schools make students complete fire drills every year, you need to drill your staff so that they know what to do if a worst-case scenario becomes a reality. Run simulations, create practice scenarios, and analyze how your team and systems perform.
5. Improve Your Plan
Let’s be honest; it is unlikely that your first business continuity plan will be perfect. After testing your plan, you will likely find errors in your system, confusing points your staff didn’t understand, and processes that could be modified. Once you have a grasp of these, you can improve your plan.
6. Test Your Plan Again
Now that you have modified your plan, you have to test it again to see if your updates worked.
7. Continue Improving
We think you are starting to get the picture here; you must plan, improve, and test on a continuous loop. Once you have found even the most perfect plan, it isn’t over. As your business progresses and technology advances, there will always be room for improvement. Therefore, after creating your initial test-proof plan, make a regular schedule to analyze risks and how to address them. Like regular maintenance on a car, a business continuity plan should be considered necessary maintenance for your business.
Business Continuity Plans, Crisis, and SOC 2 Compliance
Have you thought about how a crisis can affect your SOC 2 compliance? Imagine what would happen if a situation knocked out the systems that kept you SOC 2 compliant; what would happen? If you need assistance in ensuring SOC 2 compliance for your company, even in the event of a disaster, schedule a call with Eden Data today!