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Business Contingency Planning

Presentation By: Sheldon E. Spackman

What Will Be Covered


Business Contingency Planning a Definition How B.C.P. Can Be Applied Tools To Make It Work A Real World Example Sit Down and Try It Summary Readings List

Business Contingency Planning A Definition


A Proactive Executive Command Crisis Management Program, Driven By Business Requirements, To Control Any Significant Impact, Either Positive Or Negative, On An Organization.

Contingency Planning Can Be Applied To:


Disasters Competition Missed Forecasts Recovery Critical Vendors loss (Sole Sourcing) New Products A Critical Customer Loss Computer Failure/Data Loss Significant Events

Applying Contingency Planning


Leadership Preplan No Plan = Decision Flurry Cant Plan For Everything

What Events Should Contingency Planning Be Confined To? Events That: Cannot be foreseen Cannot be supported Are beyond reasonable control Exert a significant impact Are based on major assumptions that prove invalid

Tools To Make It Work


Fast Feedback Fast Response ZZB Principles Best, Worst, and Most Likely Cases Steps in Contingency Planning

Where to Start
Upper management commitment Company resources committed Communication Review Feedback

Types Of Feedback
Competitive Intelligence Customer Research External Environmental Scanning Monitoring Major Business Assumptions Financial Analysis

Zero Based Budgeting and Planning


Budget Planning 90%, 100%, 110% Reactions Pre-planned

Best Worst Or Most Likely


List and define all variables Best assumption Most likely assumption Least likely assumption

Steps of Contingency Planning


1. 2. 3. 4. 5. 6. 7. 8. Identify Estimate Formulate Develop Plans Establish Feedback Mechanism Develop Schedule of Resources Pro-forma Financials Designate people

Possible Internal Significant Events


Replacing a Competitor Overly Optimistic Sales Forecast Sales of New Products Disasters Technological/Product Obsolescence Major Assumptions (In company plan) Contingency Reserves ($$$$$$$$$$)

External Primary and Secondary Influences

Wilson Churchill Stated

Plans are useless, but planning is useful.

Hints For Getting Started


Dont Start Large Make a universal (non specific) plan Identify alternatives Make plan flexible

A Real World Example


Simmons and Clark Jewelers Detroit, MI

Detroit and NYC Blackout

Simons and Clark Jewelers


Employees Followed Established Store Security Plan 1. Closed all external gates 2. Locked all doors 3. Took care of all customers 4. Put away merchandise

Sit Down And Try It


Lets Plan a trip to drive to the store.
What could go wrong? (Confine Events)

Assign Probability
Red = High Probability Yellow = Middle Probability Green = Low Probability

Trip To The Store


Major Assumptions? Action Plan? Monitoring? Resources? Person doing it?

Contingency Planning Summary


Starts With Good Leadership Needs Resources Will Not Be 100% On Target Must Be Adaptable Start Small Use Tools To Guide Process Must Be Reviewed

Readings List
Herriott, Larry CDRP.(1997). Business Contingency Planning Is Disaster Recovery Journal. Systems Support, Inc. Retrieved, October 5, 2003, From, http://www.drj.com/newdr/w3_006.htm McConkey, Dale D. Planning for Uncertainty, Business Horizons, Jan/Fed 1987. vol. 30, Issue 1, pgs 40-45.

Readings List
Business Continuity/Disaster Recovery Lessons Learned from 9/11/01 A Panel Discussion. Retrieved October 5, 2003, from http://www.drj.com/groups/mcpf/0802minut es.html Green, Barbara. Emergency Plans and Employees Team Spirit Make Blackout Minor Inconvenience for Retailers, From National Jeweler, 00279544, 9/16/2003, Vol. 97, Issue 18

Readings List
Westhoven, Sgt. 1st Class Kryn, Medal Awarded to Retired Army Reservist Who Died in WTC. Retrieved, 10/05/2003 from. http://.army.mil/usar/news/2002/06june/resc orla.html Kite, Shane. Blackout Inspires CuttingEdge BCP Innovation. Securities Industry News, Volume XV, Number 36, Monday, September 15,2003

Readings List
Sapriel, Caroline. The People Dimension of a crisis. Strategic Communication Management, Apr/May2002, Vol. 6 Issue 3, p6 Sapriel, Caroline,. Effective crisis management: Tools and best practice for the new millennium, From Journal of Communication Management, February 17, 2003 Vol.7,4 pgs.348-355. Henry Stewart Publications

Readings List
Cholbi, Wendy. Contingency Planning: What Every Director Should Know Bank Director, 1st Quarter 2002, pgs. 36-46