Contingency Planning

No-one really likes to think about disaster, in fact it feels highly pessimistic to anticipate it; but in the modern business world contingency planning is not only prudent it is a prerequisite. Contingency planning is a framework for ensuring a company’s resilience with its ability to continue business in the event of a disaster, thus safeguarding the reputation of the company and brand. More and more we see the effect of natural, economic and technological disasters across the globe, and no company should feel that they are exempt from planning to negate the impact of such events on their business.

The basic definition of a business contingency plan is a series of actions which can be easily implemented in order to keep a business functioning during times of crisis. A very basic example of an infrastructure crisis would be to remember the Eskom load shedding problem of 2008. Many companies were ill-prepared for this, resulting in huge financial losses for those who did not have access to generators. While the service industry couldn’t take care of customers properly, most industrial companies came to a complete standstill with inefficient use of their paid labour.

Nowadays it would be hard to find a business that does not have a back-up generator to see them through possible electrical cuts, meaning that they now have contingency plans in place to deal with future problems.

Typically, creating and maintaining contingency plans involves these key phases:

1. Strategy: Good contingency planning means knowing how to deal with crisis by having the ‘fix it’ solution at hand, but moreover it involves prevention of disaster in the first place. Knowing what your companies high risk areas are and further securing them will go miles towards reducing impact should disaster strike. For example, perhaps an Art Dealer who has a strong-hold safe in place to secure high-value art works would further back up their premises with a top of the range fire alarm. That way theft and fire are less likely to have an impact, reducing overall risk.

2. Business Impact Assessment: One needs to fully comprehend the scope of disasters (natural and unnatural) that could affect one’s business. How would a flood or fire affect the business? How would a death in top management affect the business? How would a large-scale break-in affect the business? How would a server crash affect the business?

3. Develop and Manage: After outlining all possible scenarios, it is necessary to prioritise which are most likely to happen but also which would have the largest impact. An earthquake may be highly unlikely, but for some businesses it may have a much larger impact than, say, an IT disaster. Using statistical analysis to develop and manage contingency plans is wise, and helps truly secure assets, employees and patrons.

4. Exercise, Maintain and Review: It is vital to rigorously test contingency plans to ensure if a disaster occurs people will respond without panicking. All involved should know their roles and how to perform them. Maintaining contingency plans and ensuring all information is up-to-date is very important, such as a change in staff. Contingency planning is not a once-off process and plans should be regularly reviewed to ensure their relevance.

Forward planning for the unexpected, no matter how unlikely, is crucial to successfully manage a business. Having a contingency plan reduces indecision, uncertainty and delays when disaster does strike, and at Servest we understand the importance of never letting our clients down. Having comprehensive contingency plans in place to better service you are among our top priorities.