Why do I need a Business Continuity Plan?

The Association of British Insurers recently reported that unless a company can adequately respond to a disaster within 6 weeks, they would probably not recover their pre-incident position.

The National Audit Office indicates from a study which they instituted, that 80% of all companies which undergo a major fire never actually recover. Also 1 in 5 SME companies will experience a major disaster within the next 5 Years.

Business is becoming increasingly more difficult for the following reasons:

• Complex supply chain issues with just in time delivery
• Increasing dependency on individual locations
• Single customer /supplier issues
• Dependency on IT for key processes
• Increasing regulation – “red tape”

When all this is taken into account, even a small incident can have a large impact on a business. Before a company can bring all of these pressures under control, it needs to undertake internal and external analysis. This is the subject matter of Business Continuity Management.

SME’s probably need plans more than Plc’s. Larger companies usually have many locations and resources to weather a disaster. The SME on the other hand, usually has one principal location, and a hard-pressed management team with no spare time to “manage the disaster”. As a consequence, unless well prepared, the SME can quickly go out of business because of the impact on cash flow.

What is Business Continuity Management ?