In uncertain times it’s important to have strong contingencies in place
To ensure smooth running when it comes to business operations, a contingency plan is essential for weathering the potential problems you might face along the way. Since businesses of any size are susceptible to unforeseen events and situations, streamlined day-to-day processes must be in place to ensure continuity.
And, while things like fires, floods and other natural disasters pose significant problems, it’s far more likely that you’ll be faced with more everyday issues that threaten to throw your business off kilter. The contingency planning process helps you to prepare for these worst-case scenarios and put you back on the right track when it’s most needed.
One of the ways operations professionals can help with contingency planning is through managed service business solutions. Here, you’ll find some practical guidance on how to create and put into practice a contingency plan to protect you from unforeseen errors in the future, as well as how collaboration with outside services can help to strengthen and reinforce your plan.
Assessing potential problems
In creating a contingency plan, it’s important to identify the potential risks or failures that might pose problems. In doing so, those involved have to speculate on or assess all the ways in which internal weaknesses or threats from outside can affect the smooth running of your business.
Though business size can be a factor, things that can affect day-to-day operations tend to include:
- Property damage caused by poor weather conditions
- Personnel issues, such as the death of a key employee or stakeholder
- Data theft and IT security breaches
- Physical theft of company assets
- Legal problems
- Technical problems including electricity outages and internet issues
- Revenue protection
- Transitions to new system processes
By identifying the key areas that could leave operations vulnerable, it helps to make the focus of your contingency plans more precise. As a result, you aren’t placing your resources and time on unnecessary areas that don’t require contingency planning.
Putting alternatives into place
In drawing up a contingency plan, you’ll be provided with the insights needed to improve in areas of production, distribution and customer service. From here, it’s possible to identify the right people you’ll need to put in place in the event of top personnel leaving; alternative suppliers and business partners who can replicate the work done by previous vendors.
For larger businesses, training for such occurrences should be in place. Cross-training and skill-sharing amongst senior personnel and the management team can help ensure a smoother transition, and reduce the risk of a skills deficit at the top.
Organising your plan into stages will help you manage the crisis and ensure that key contingency measures are handled by the appropriate members of staff. The three stages of a contingency plan may consist of:
- Immediate measures: Things of the utmost importance to be done first. This might include things like calling suppliers, customers and staff to keep them abreast of your current situation; putting IT support in place, and evacuating the premises if necessary.
- Interim procedures: What you need to do in order to keep the business going after a given incident, such as contacting your insurance company, assessing financial stability, and restoring IT systems and security to begin rebuilding digital assets.
- Rebuilding and recovery: What has the business lost as a result? Here you’ll replace your losses, including increasing marketing efforts, employing specialist consultants if necessary, and future-proofing areas that need work. You might consider investing in better security, and delegating key recovering tasks to personnel. Conduct a learnings session in the wake of a major event, and identify processes to put in place to mitigate future risk.
Outsourcing contingency planning
Certain aspects of your operations’ contingency planning might benefit from being outsourced to service providers, or managed services. There are many different forms that this can take which operational managers might consider when carrying out the process.
- You might simply rely on the outsourced service provider’s current contingency measures, integrating them into your own plan. It’s easy to implement, but it requires testing and understanding of their technology, and needs both IT and business resources to be part of the review process.
- You might seek out multiple providers as a way of lessening the impact of individual fallout. This means that if one service provider suffers an outage, for example, it won’t affect all aspects of your operations. It’s increasingly popular, but it’s pricier and more complex to put into practice.
- The “full shadow” approach provides an extra layer of protection by effectively duplicating the methods of a service provider in order to back up deliverables and ensure everything is safeguarded. Whilst this may be a more costly route, it’s important to consider the impact a data breach or server fire could have on your business compared to the investment required.
The importance of robust relationships with service providers
For many businesses, partnerships with external service providers are a hugely important part of daily operations. If your business is facing a difficult spell, your reliance on these service providers could become all the more important when seeking continuity and consistency. Whether you employ the assistance of an external HR team, security personnel or car park management experts; it is vital that you build strong relationships with all your service providers.
Your expectations should be detailed and documented. In your document, include details of the service expectations, key stakeholders involved, and any implementation and technology requirements. Defining a financial model with an anticipated return on investment is also a required step for new deals, but we’d strongly recommend doing it for renewals, too. All of this will help foster a stronger, more productive relationship.
Laying out your expectations aids in establishing greater transparency. Sharing information, even things that you might shy away from, will help to increase mutual trust; you should be open with the issues that have led you to consider outsourcing in the first place.
Once you’re confident in your service provider, strengthen things with a Service Level Agreement, along with Key Performance Indicators, in order to govern the relationship going forward. Measurable performance allows for incentives and can help each party to learn from its mistakes through the use of corrective action.
Investigate each supplier’s approach to ‘interruption of service’ and what back-ups they have in place to minimise the impact – such as remote-fix technology, local hubs to accelerate hardware issues, and early indicators which highlight potential problems. These might not seem important at the supplier evaluation stage, but you’ll reap the benefits should a huge issue hit your business. If your supplier’s resolution is swift and professional – it could be the difference between hours rather than weeks to get you back on your feet.
Putting your plan into practice
Before you do anything, create an internal major incident team to own the entire process – no matter your split between in-house/outsourced service provision. The process should outline how/when this team is informed and how to contact them out of hours. Ideally, there should also be clear decision-making lines which may include ‘delegation of authority’ is the issue involves the loss of a senior member of staff.
Writing up your plan and hoping for the best isn’t enough. Don’t let the business’ contingency plan gather dust; you need to try it out with the relevant staff at least once a year. Far from the expensive, time-consuming process it might sound like, if you run 20-minute stress test exercises that give your staff a scenario to plan for, it can be an effective method of test-driving what’s been written up.
In doing so, you should fixate on the cause of the disruption, such as a natural disaster or power cut, and focus on how to manage the consequences. Though no two problems are the same, you might find similar solutions to different situations. As the business evolves, your plan will change, so a debriefing after each test is important – and be sure to update the plan if necessary.
Ensure that all employees are aware of the plan; keep it accessible so that everyone is in the loop should the worst happen.
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