Every business, from well-established organizations such as Microsoft to the small home based business that operates out of a basement is bound to experience operational setbacks from time to time. These setbacks can be both positive and negative interruptions of normal business flow. For example, an organization might experience a demand for a product at a rate not originally anticipated, generating more revenue than expected, but leaving the organization struggling to avoid back order. Organizations might find themselves victims of theft, or sabotage, and of course no organization is impervious to the consequences of operating in the natural world. Fires, floods, storms, power outages, and other variables beyond the control of the organization have the ability to bring an entire company to a halt.
While these situations are not entirely avoidable, an organization’s ability to recover from such setbacks largely depends on how much energy has been invested into identifying and mitigating risk through the use of a well-established business continuity plan. Lindros and Tittel (2013) explain that business continuity refers to maintaining business functions, or quickly recovering such functions in the event of a major disruption, and the lack of planning doesn’t just mean an organization will take longer to recover, but may never recover at all. The first step to developing an effective continuity plan is a thorough planning process in which an organization establishes
In this paper examples of two different types of organisations were presented and their response to a natural disaster illustrates how sometimes Risk Management processes are not enough to save an organisation from unforeseen adversities. The disaster at Fukushima Daiichi is the second worst nuclear accident in history (Qiang, Xi, Xu, Chong 2013). Even though arguably it could have been avoided, it led to a near universal loss of faith in nuclear energy.
These chapters discuss the recovery strategies that the business would need to restore vital functions to an acceptable level following a disastrous event. Without these plans or strategies, a business could suffer tremendous losses such as market share, competitive advantage, and valuable customers. Having the CEAS program is one way that an organization attempts to remedy this situation. It is very important that CEAS is incorporated in the disaster recovery plan of all business entity. Pre-selected employees that would need access to the facility, and processes that would need to be up and running will go a long way in preserving a company’s data, reputation, and financial resources, and competitive
Next, you need to identify and document your company's key functions and related services. You need to understand the activities and resources required to deliver your core services. You need to decide if the function is minor, moderate, or significant. And if the need for that service will change over time. For example, payroll might not be something you consider significant during the first 24 hours after the disaster occurs, but it will be significant by the next
A disaster is defined as a sudden, unplanned catastrophic event that renders the organizations ability to perform mission-critical and critical processes, including the ability to do normal production processing of systems that support critical business processes. A disaster could be the result of significant damage to a portion of the operations, a total loss of a facility, or the inability of the employees to access that facility. The disaster recovery process consists of defining rules, processes,
A business continuity plan is highly involved, time-consuming and requires continuous updating as the environment changes. A disaster recovery plan is unique to the facility or service and should include the step by step process on how to recovery (Carrillo, 2011). A plan is just a plan unless it is exercised at regular intervals, this exercise is not only a validation of the plan’s procedures, but training for the staff before a disaster is declared (Day & Day, 2006, pg. 12; Pinta, 2011, pg.
An IT disaster occurs when a business’s mission- critical system is not available. An IT disaster may be nature- or human- induced. Natural disaster including fire, hurricane, flood, earthquake, tornado etc. can damage the IT physical infrastructures. Fire is reportedly one of the most common catastrophic events that can interrupts a business operation (....) Human- induced disaster include terrorist attacks, deliberate criminal activities etc. An IT disaster can have serious consequences to a business if not being addressed timely and correctly. Apart from loss of existing data,
In business continuity and risk management, what are some practices that have been implemented to reduce this myopic behavior pattern and work towards preventing risks that could happen much further down the road (more than 5 years)? Provide an example of an organization that has demonstrated one of the actives.
In order for operations to continue at Tip Top Tailors Heartland, continuity strategies must be implemented. Formal emergency response and business continuity plans are provided to control and manage unforeseen incidents effectively and to return the business to normal status. If there is a power failure, or a supplier can no longer distribute merchandise to the store, consequences will result in significant financial losses. The Tip Top Tailors Business Continuity Strategy serves to revive business operations to their day-to-day procedures through a minimum acceptable level should a disruption in the business occur. By using the Maximum Tolerable Downtime (MTD) strategy from the Business Impact Analysis, personnel can analyze and effectively
Overall, tragedy is a wake-up call for businesses to have a succession plan ready to go in case disaster strikes. Riggs International Banking Corp., for example, did not give family and friends the time to grieve their lost loved one. Nevertheless, businesses must move at warp speed to keep up with their competitors and the rapidly changing business environment. On the last note, successors must be aware of what role he or she is taking on because what the predecessor was involved in can be the undoing of the current leader and
In this day and age, a business continuity plan is essential to an organizations risk management. A large organization like Sunshine Machine Works understand that time is critical when it comes to natural disasters or man made interruptions to their network systems. When a system is offline for excessive amounts of time, could mean a loss to the organization. That’s why having an effective business continuity plan is vital to keeping operations for being disturbed during a time of crisis whether it is an attack or natural disaster that could potentially affect Sunshine Machine Works operations, data and networks.
It is imperative to have a disaster recovery plan, it is no longer safe for any business, small or big, to have no protection against natural disasters or even getting hacked which is a common practice. Anyone of those
Disasters have become an inevitable part of businesses and organizations as well. They not only have a major effect on business and organizational continuity; they also result to an overhaul in organizational operational mechanisms (Awasthy, 2009). It is for this reason that many organizations and business resort to preparing business continuity plans and disaster recovery plans that will facilitate better disaster management in future. Effective disaster recovery plans are important to every business and organization (Thejendra, 2008).
As a consultant brought into an organization concerned about business continuity I would recommend to first perform a Risk Assessment Analysis and/or Business Impact Analysis (BIA). Conducting a business impact analysis will allow an organization to know the system or application’s downtime tolerance. The analysis will identify all systems and applications that can experience little to no downtime. Conducting risk assessment analysis will allow the organization to identify all the risks at the beginning and during the life of the organization, and grade the risks in terms of likelihood of occurring and seriousness of impact on the organization. Either analysis is an excellent tool and will result in the beginning creations of disaster recovery and business continuity planning. If using the BIA method a good first step is identifying the business’ most crucial systems and processes to assess what effect the outages will have on the business. All systems or applications should have a back-up location offsite to ensure business continuity. The higher the impact the more money a company should spend in order to quickly gain restoration of their business.
Contingency planners are now asserting that contingency planning is a value-added component that can be a competitive advantage in the marketplace as well a means of helping organizations save money. Processes that are deeply analyzed in terms of continuity will usually be more secure, and new ways of working may emerge to help streamline operations. Contingency planning can be useful when forging alliances with external organizations or during acquisition phases. Contingency planning should be part of an organization’s quality cycle as well. “Business continuity and disaster recovery have gained somewhat in the eyes of top corporate management since the start of the 1990s. As the industry has slowly evolved from what could almost have been called a ‘black art’ to something starting to resemble a disciplined science, basic business principles have begun to become increasingly relevant” (Rothstein, 2003, p. 1).
A second stream of management research on terrorism has explored firm readiness and the performance impact of such preparation. In particular, several authors have examined the relationship between business continuity planning and the mitigation of the impact from unanticipated disasters such as terrorism (Cerullo & Cerullo, 2004; Zsidisin, Melnyk, & Ragatz, 2005). According to Cerullo and Cerrullo (2004), there is clear evidence from past catastrophes that international businesses without business continuity plans are ill-prepared and have a low probability of surviving unanticipated disasters such as terrorism, earthquakes, floods, and hurricanes. Practically, the 9/11 Commission Report (2004) urges the private sector to include continuity plans in their planning for a terrorist attack. The goal of such planning is increased resilience in the face of traumatic events such as terrorism. Enterprise resilience is the “ability and capacity to withstand systemic discontinuities and adapt to new risk environments” (Starr et al, 2003: 3), and this ability to bounce back, mitigate and endure disruptions and discontinuities can create a sustained competitive advantage over less adaptive firms (Starr et al., 2003).