Business survival is dependent on avoiding both major and minor disruptions. Most events that cripple a business are unpredictable such as terrorist attacks, cyber-attacks, technology or infrastructure malfunctions, people problems either mistakes or malicious and of course natural disasters such as flood, fire or even earthquakes. These cost businesses not only money but also time, existing customer loyalty, lost future customers, profitability and market value. No one can predict such future events nor our ability to bounce back rapidly and resume normal business activities, hence we all need to put in place measures to ensure that our businesses continue running. Among these measures includes both business continuity plans and contingency plans.
What is Business Continuity?
This is the ability of businesses to carry out their normal activities and function after unplanned events have occurred. Businesses should not only plan and prepare for major disruptions that will completely affect business operations but also events that could adversely affect functions and services.
A business continuity plan may include:
How your team will manage the emergency
How your team will ensure services and products continue to be available to customers
How management will support employees and maintain staffing levels
What technology will be required to restore business functions
Where to relocate people and processes if the current location cannot be used
What is a Contingency Plan?
A contingency plan is a written plan that will be enacted if a business risk occurs in the future. It helps an organisation respond effectively to a potential future event.
It will allow a business to resume it’s normal business functions as fast as possible
It minimizes customer inconveniences and potential losses
It may Identify staffing needs during recovery
Developing a contingency plan involves the recording of essential business operations and determining how these operations can be maintained both in the short term and in the longer term.
Summary of Business Continuity vs. Contingency Plan
Business continuity refers to the ability of businesses to carry out their normal activities and function after unplanned events have occurred. It is based on the concept of business survival after the occurrence of unprecedented events. On the other hand, a contingency plan refers to an actionable and defined plan that will be enacted if an identified business risk or unfortunate event occurs. It is based on the concept of preparation of all types of disruptions and steps that should be followed when these disruptions occur.