keyboard_arrow_up

Today is the Day to Start Preparing Your Business for the Next Disaster

Today is the Day to Start Preparing Your Business for the Next Disaster

By Brian Kraigher, Senior Consultant, UHY LLP, bkraigher@uhy-us.com

It sounds negative, but here’s the truth: One day soon (probably sooner than you think) the next disaster is going to impact your business. The severe weather affecting much of the country the last several months has cost businesses in productivity and profits as they’ve coped with the challenges of inaccessible offices, powerless equipment and employees who can’t get to work. We’ve learned many lessons from our recent weather woes, but while snow and ice are crippling, the dangers posed to our businesses as a result can be even more devastating.

Companies often say they’ve thought about this kind of planning, but “thinking about it” doesn’t constitute creating a real plan to ensure uninterrupted operations. While Atlanta’s recent disasters have been weather-related, other potential dangers include flu outbreaks, electrical or widespread power grid failures, or floods which can destroy data or records.

Office closings can disrupt operations and impact the ability to meet customer commitments, and in some instances regulatory requirements.  Hospitals, law enforcement, data centers, Internet services, and infrastructure such as power, water and natural gas have to be up and running, with no exceptions.

Looking beyond the immediate days of the disruption, if a company is ill-prepared for a disaster, it may negatively affect the business’s reputation long term.  Failing to deliver, regardless of the circumstances, can break customer trust and open a door for the competition.

The key is to have a disaster preparedness plan in place before disaster hits.  The top three steps:

  1. Before developing a plan, perform an ad hoc risk assessment.  What could go wrong? Consider customer commitments and legal requirements, and also consider the likelihood of those disaster scenarios.
  2. Develop a plan for dealing with the highest risk first, using a cost/benefit approach. 
  3. Include detailed procedures for employees to follow, and assign responsibilities for performing those vital business functions.

An effective disaster preparedness plan should consider the following:

  • The number one priority is to keep employees and customers safe.
  • Minimize disruption to business by ensuring staff can perform necessary business functions and maintain customer commitments.
  • Maintain effective communications throughout the disaster. Leverage technology, using Skype, Twitter, Facebook, instant messaging and text messaging to keep in touch.

 It’s very important to have the appropriate infrastructure in place and supplies on hand.  During power outages, have backup generators and redundant Internet services. When the office is evacuated or inaccessible, have an off-site location, an alternate site for IT servers, and/or a command center (office space or hotels).  Be sure to have a contract in place with these third parties, as everyone will be scrambling to secure them once a disaster hits. 

Document the plan, including procedures to continue any necessary operations during the disaster (customer commitments, regulatory requirements).  Detail how to return the business to normal operations, and list procedures for the restoration and recovery of data and systems.

Test the plan and know the company’s limitations. Be realistic. Review the plan periodically, as changes in the business may affect the risks the company is exposed to.  Communicate policies to staff and customers, and be sure all responsible parties understand their roles.

Being thoughtful and taking basic steps will keep productivity and profitability up when disaster strikes.  It’s only a matter of time before the next one hits, so be prepared.

###

Brian Kraigher is a senior consultant with UHY LLP, a CPA and business consulting firm.  bkraiger@uhy-us.com, www.uhy-us.com.