Risk and Readiness: Common Pitfalls Leading to BCP Failures

Backup & Disaster Recovery

More than 90% of mid-sized to large enterprises have disaster recovery and business continuity plans. However, only 40% of them are effective.

Understanding the reasons behind a business continuity plan failure can improve your ability to survive emergencies and plan better.

In this blog, you will learn what the key reasons are behind the failure of BCP in an organization.

What is a business continuity plan? 

A Business Continuity Plan is an organization's strategy to continue operations during an emergency.

Unplanned downtime costs businesses $5,600 per minute on average.

A survey by the Federal Emergency Management Agency (FEMA) indicated that nearly 40% of small businesses never reopen following a disaster.

Here are a few examples of emergency events that could disrupt a business:

• Natural Disasters (Earthquakes, Hurricanes, Floods, Wildfires, and Tornadoes)
• Cyberattacks (data breaches, ransomware attacks, hacking)
• Pandemics and health crises (COVID-19 and similar outbreaks)
• Power outages (infrastructure failures, extreme weather, technical issues)
• Supply Chain Disruptions (Supplier Issues, Transportation Delays, Manufacturing Problems)
• Terrorist Attacks, Accidents, or fires
• Social Unrest and Civil Unrest (Protests and Riots)
• Environmental Hazards (Chemical Spills, Hazardous Material Leaks)
• IT failures (server crashes, software glitches, network outages)
• Financial crises (economic downturns, market crashes)
• Regulatory Compliance Issues (Unexpected Regulation Changes)

Why business continuity plans failed?

Equifax, a major credit reporting agency, suffered a data breach in 2017 that exposed the personal information of around 143 million people.

The breach was attributed to a software vulnerability that wasn't patched promptly. Equifax faced severe backlash for its inadequate response and security measures.

Business continuity plans are not all prepared equally. Let us go through some of the most frequent causes of business continuity plan failures:

Lack of experience or knowledge:

Developing an effective Business Continuity Plan (BCP) requires a certain level of expertise and understanding of disaster management principles.

BCP can fail if the initial risk assessment is inadequate or fails to identify potential threats and vulnerabilities accurately.

Creating a BCP without prior disaster knowledge or making false assumptions can indeed lead to incorrect conclusions.

Get help from a Certified Business Continuity Professional (CBCP) if you're an SMB for a robust BCP. It's also worth providing training to someone within your organization in a larger organization.

Lack of Data Integrity:

Even the best-designed BCP plans can fall short if the data being recovered is outdated or corrupted. Regular backups help maintain the accuracy and reliability of the data being restored.

Having geographically diverse backup locations reduces the risk of losing both primary and backup data in the event of natural disasters.

Information Overload:

Having overly detailed action plans can lead to confusion, delays, and reduced agility when quick decision-making is required.

With excessive details, responders may struggle to identify the most critical steps amidst the noise, which can slow down the decision-making process.

Clarity, simplicity, and the ability to adapt quickly are key principles to consider when designing action plans for business continuity.

Ambiguous scope:

Without a well-defined scope, important business functions, processes, systems, and assets might be overlooked.

It can lead to confusion about the roles and responsibilities of individuals and teams during a crisis.

Not regularly testing and updating the BCP:

Without testing, the assumptions made during the plan's development might not be accurate. Real-world scenarios can reveal gaps and weaknesses that were not apparent on paper.

Industries and regulatory environments are dynamic. An outdated BCP might not align with current compliance requirements, exposing the organization to legal and reputational risks.

Testing and updating a BCP ensure the plan's relevancy, accuracy, and effectiveness.

Having a single point of Failure:

In the context of BCP, a single point of failure would cause the entire system or process to fail. It could either refer to a component, process, system, or resource.

A single point of failure often indicates a lack of redundancy, which is crucial for maintaining operations.

Introduce redundancy by having backup systems, resources, or processes that can take over if the primary one fails.

Wrapping up:

In summary, a Business Continuity Plan (BCP) is your organization's safety net during disruptions. While a powerful tool, it can fail if not handled carefully.

Not fully assessing risks and neglecting regular testing and updates can weaken even the best plans. To succeed, involve experts, engage senior management, and communicate clearly. For effective planning and recovery solutions, contact us today.