Monday, April 30, 2012

Business Planning

Discussion on Business Continuity Planning with Patrick Rivait, President, Rivait Business Solutions, Inc.

This article was prepared by Patrick Rivait and it is one of a series to be presented in this forum. Patrick specializes in Business Continuity planning and I recommend any reader contact him directly for advice on this valuable service. Patrick can be reached at 519.984.6633

Does my business need a continuity plan?

A common question that many business owners ask is “Does my business really need a business continuity plan?” 

There are staggering statistics out there supporting the fact that a failure to have a current, robust Business Continuity Plan (BCP) in place can have a devastating impact on an organization:

·        Of companies experiencing a data loss without having a solid BC/DRP plan in place:

o   43% will never re-open;
o   51% will close within 2 years;
o   6% will survive the long term.[1]

·        80% of companies that do not recover from a disaster within 1 month are likely to go out of business[2]
·        Of businesses that experience a disaster and have no emergency plan, 43% will never re-open, of those that do, only 29% will still be operating two years later[3]
·        70% of small firms that experience a major data loss go out of business within a year[4]

From the above statistics it is evident that the adage – “failing to plan is planning to fail” does hold true. 

While fear of losing a business may be a tremendous motivator to start a Business Continuity program within an organization, there are a number of other factors that also help justify the effort and expense of initiating them:

·        Helps safeguard human lives;
·        Helps protect critical assets (processes, property, employees, customers)
·        Helps to minimizes confusion and facilitates decision making during a time of crisis;
·        Works to reduce the dependency on specific personnel during a crisis;
·        Helps to minimizes loss of life, data, revenue, customers, and public reputation/credibility;
·        Facilitates the timely recovery of critical business functions;
·        Helps ensure organizational survival;
·        May be part of regulatory or statutory requirements.

Having an established BCP programs in place helps minimize the potential implications of a crisis on an organization, but there are some secondary benefits that are equally valuable to an organization:

·        Demonstrates to current and potential employees that the organization values its staff and works to ensure their safety, well-being, and long-term employment opportunities;
·        Demonstrates to customers that the organization will be able to continue delivering goods and services in a timely, reliable manner;
·        Demonstrates to lenders and shareholders that the organization is able to effectively respond to crisis, and that the firm’s ability to support their financial obligations would not be jeopardized should a critical incident arise.

Once the program has been initiated, management should work to ensure that this effort becomes engrained within the organization’s culture.  Resources across all levels of the organization can provide valuable insights and recommendations that could guide the plan and add to its strength.  Once plans have been established, it is critical to educate staff about them, and ensure that the appropriate resources have a clear understanding of their roles and expectations should they be call upon for assistance during a crisis.

Much like maintaining an organization’s strategic and short/long-term business plans, it is also important to keep BC plans current through ongoing testing, exercises and audits to ensure that they remain relevant in the face of a changing set of risks, suppliers, staff, and resources.  An out of date continuity plan may be more dangerous than no plan at all as it may provide the organization with a false sense of security that could prove fatal should a critical incident arise.

Starting a Business Continuity program may seem like a daunting task at the outset but it is important to remember that there are numerous resources to assist in the process.  Organizations such as DRI International or the Business Continuity Institute have worked to establish standards to support this practice, and there are countless books, websites, software solutions, and consulting services available as well. 

If your organization has already established a program – congratulations for moving forward and helping ensure your long-term sustainability.    If your organization has not -- the time to start is now.

[1] Source: Cummings, Haag, & McCubbrey, 2005
[2] Jonathan Bernstein, president, Bernstein Crisis Management, LLC in Director, June 1998, v51n11, p44
[3] The Hartford’s Guide to Emergency Preparedness Planning, created by The Hartford Financial Services Group and now published by J.J. Keller & Associates
[4] Contingency Planning, Strategic Research Corp and DTI/Price Waterhouse Coopers (2004)

Monday, April 23, 2012

Business Planning

Discussion on Business Continuity with Patrick Rivait, President, Rivait Business Solutions Inc.

This article was prepared by Patrick Rivait and it is one of a series to be presented in this forum. Patrick specializes in Business Continuity planning and I recommend any reader contact him directly for advice on this valuable service. Patrick can be reached at 519.984.6633

Business Continuity Planning versus Disaster Recovery: Are they the same?

Technology has become entrenched as a cornerstone in most companies’ daily operation, regardless of their size or complexity.  Given the potential risks of operating disruption or data loss arising from IT service disruptions, Disaster Recovery Planning (DRP) has become a critical function for IT departments or third party IT service providers.

A question that often is raised is “The organization has invested a great deal of money in support of a DRP by acquiring backup hardware, off-site data co-location, or hosted solutions -- so are we covered?”

While this is a broad question, the likelihood that even the best DRP will be sufficient in times of crisis is fairly small.  A bit of additional background may help shed more light.

By definition, Disaster Recovery (DR) is “The technical aspect of business continuity.  The collection of resources and activities to re-establish information technology services (including components such as infrastructure, telecommunications, systems, applications and data) at an alternate site following a disruption of IT services.  Disaster recovery includes subsequent resumption and restoration of those operations at a more permanent site”[1]

In contrast, Business Continuity (BC) is defined as “A holistic management process that identifies potential impacts that threaten an organization and provides a framework for building resilience with the capability for an effective response that safeguards the interests of its key stakeholders, reputation, brand and value creating activities. The management of recovery or continuity in the event of a disaster. Also the management of the overall program through training, rehearsals, and reviews, to ensure the plan stays current and up to date.”[2]

It becomes a bit clearer from these definitions that DRP is essentially a sub-set of the broader process of BCP.  The DR focus is solely on assets surrounding IT, whereas BC focuses on all the organization assets – people, brand, buildings, processes, and data.

To help provide further clarification-- in the event off a fire at a workplace, having DR plans to recover information and business systems will be critical in ensuring issues such as safety of client and financial data, production information, orders, compliance for accounting audits and taxation, they do not cover key considerations such as:

·        how employees and customers will safely be evacuated from the building;
·        where the business will operate through the immediate response period to the crisis;
·        who will be responsible for overseeing various sets of activities during, and immediately following the crisis; and what authority they might have during this response and recovery period;
·        how the organization will communicate to suppliers, customers, employees (and potentially their families) and shareholders or funding sources;
·        where the operation will relocate immediately after the crisis -  during the recovery period.

Following a serious event, while it might be useful to access accounting data from a hosted service provider, if there are no contingency plans in place to facilitate the organization’s value-generating functions (such as ongoing production) in order to meet client demands, it is still highly likely that an organization will suffer significant losses to cash-flow and profitability, potentially lose employees through attrition or layoffs, and the customers may be forced to seek alternate providers for their goods and services.  While these issues may appear to be the indirect impact of the critical event (i.e. the building fire), they are actually the direct impact of a failure to have appropriate programs in place to ensure the long-term viability of the organization.

Generally, DRP’s are driven by the IT function within an organization, and hopefully consider the core IT requirements of the various stakeholders within the organization.  On the other hand, a robust BCP should be driven by a Steering Committee that represents all key stakeholders across the organization, and leverage the insights and experience of all key functions that support the organization.  This broader perspective helps ensure that the final plans will be more robust, and that the proposed solutions will be workable and practical in the event that they need to be actioned in the aftermath of a critical event.

In clarifying the difference between these types of plans, it is important to remember that both are critical for ensuring the long-term viability of an organization.  Both plans, when developed and produced in conjunction with one another, will help and organization mitigate both the risks and impacts of a potential crisis.  Both are valuable, and should be considered critical parts of an organization’s regular management process.

[1] Source – Disaster Recovery Journal  - Business Continuity Glossary:

[2]Source – Disaster Recovery Journal  - Business Continuity Glossary: 


Monday, April 16, 2012

Business Principles

Do you know your competition?

In order to compete effectively and outperform competition you need to know their strengths and weaknesses. Your product or service has to be unique or stand out against prime competitors.

To test your competitive intelligence; ask yourself:

What products do you offer that competitors don’t offer?

Are your employees as well trained to service customers as your competitor?

Can your employees answer questions about your competitor’s products? Can you identify competitive weaknesses? Are you vulnerable in any way?

Are you familiar with competitive messages? Check their websites, brochures and promotion material to understand their positioning and how it affects you. Does your competition spend more advertising and promotion that you do? How does that affect how you compete?

Do you know your competitors customers, suppliers and distributors? You need to know how strong their relationships are to know how you can compete most effectively.

Understanding your competition not only allows you to understand where you compete best but may offer the opportunity to collaborate in areas in which you do not directly compete. A competitor may be willing to refer customers to you if you offer a particularly unique product or service. This can only happen if you know your competition and develop a relationship of trust between you.

In the end use this knowledge to strengthen your own position and build your strategy and a place in the market.

Tuesday, April 3, 2012

Business Management

Keys to Successful Business Management

There are critical areas where your ability to think largely determines the success or failure of your business. The greater clarity you have in each of these areas, the better decisions you will make and better results you will achieve.

1.     Have a vision

One of the most important aspects of running any business is to have a clear vision of what you want that business to be like. What do you want to be known for in the marketplace? Who is the target market? What level of service do you want to provide? Do you want to be “one among many" or do you want to be considered a leader in your industry?

2.     Develop a plan 

Once you gain clarity on your vision, you must be willing to develop a plan. Far too often people have an idea of where they want their organization to be, but they fail to put together a viable plan. Take time to map out what needs to be done to achieve your outcomes.

3.     Measure results

Establish key yardsticks for success. They would include financial goals and profitability but should include a measure of customer satisfaction. Your ability to satisfy your customers to such a degree that they buy from you rather than from competitors, that they buy again, and that they bring their friends is a key determinant of growth and profitability.

4.     Surround yourself with great People

One of most important keys to success is a strong team. People can be your greatest asset or an enormous liability. Great people will push you, teach you, inspire you, and ultimately grow your business.