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DISASTER PLANNING AND THE IMPORTANCE OF A BUSINESS CONTINUITY PLAN

By Sonjui L. Kumar and Jesse C. Moore Email By Sonjui L. Kumar and Jesse C. Moore
December 2017
DISASTER PLANNING AND THE IMPORTANCE OF A BUSINESS CONTINUITY PLAN

In 2017, the United States (and the world) has experienced a string of disasters that have displaced people and businesses with calamitous consequences. We have seen hurricanes, tornadoes, forest fires, and floods shut down companies for long periods of time. Thus, it is vital that every enterprise establish a plan to continue or restore operations in the face of catastrophe. In fact, many Fortune 500 companies require that any service provider have a business continuity plan (BCP) in place prior to entering into an agreement. Here is an overview of the components of a BCP to help businesses recover in the face of disaster.

Emergency Management Team
By proactively having a trained team in place that will act as first responders in case disaster strikes, decisions can then be centralized. An emergency management team should be familiar with and ready to execute the company’s BCP at all times, staffed with representatives from all essential functional areas including technology, operations, human resources, and finance.

The Plan
The intent of a BCP should be to allow for a fast and efficient return to normal operations following a disaster. A good plan should take into consideration various levels of disruption, ranging from short-term power failures to extensive damage following a hurricane or earthquake. Most plans include a backup or redundancy for various operations. Consider all aspects of a company’s operations from the facilities, to telecommunications, technology, employee outreach, and customer service.

Order of Succession & Delegation of Authority
The plan should address order of succession and delegation of authority. By establishing these transition processes, a business can be better prepared for unavailable personnel, with designated leadership ready to step in. Training the designated leadership is ideal to ensure a smooth transition in the face of disaster.

Alternate Facilities
The plan should identify alternate facilities to continue the business should the normal business facility become inaccessible for twenty-four hours or more. For example, a technology company may locate backup servers that are at least 100 miles away from the main servers. It is generally recommended that a few alternate facilities be contemplated, in the case the disruption affects a larger geographic region and damages an alternate facility. Some businesses institute a virtual office, allowing staff to work remotely.

Records & Documentation
Records management is vital; documentation necessary to execute business processes should be backed up. It is highly recommended that the records be backed up off site periodically. Many companies use cloud storage to support backup and remote recovery, as well as allowing staff to work remotely.

Communication with Employees
Perhaps most important is a system to update staff on the disaster and provide timely instructions. A contact list should be maintained and circulated regularly. This allows management to communicate staffing, scheduling, and other duties during each phase of the disaster plan.

Training
BCPs should address all these issues long before disaster strikes. A schedule for training employees and testing the BCP should be instituted. By revisiting the BCP on a regular basis, a business can identify areas of improvement, outdated contact information, or other issues that may arise during execution of the plan.

Recovery to Normal
Finally, a business should have an executable plan to recover from the disaster and transition back to normal business operations after the disaster has passed. This final element of the plan should address phasing out the alternative facilities, returning personnel to original responsibilities, and carrying over records and equipment to the permanent facility.


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Business Insights is hosted by the Law Firm of KPPB Law (www.kppblaw.com).
Sonjui L. Kumar is a founding partner of KPPB Law, practicing in the area of corporate law and governance.  Jesse C. Moore is a law clerk at KPPB Law.
Disclaimer: This article is for general information purposes only, and does not constitute legal, tax, or other professional advice.



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