How to Develop a Business Continuity Plan

July 11, 2019

How to Develop a Business Continuity Plan

Having a business continuity plan is essential to keep an operation going following a natural disaster. Being prepared to manage disaster recovery can greatly minimize business disruption. The third pillar of ALTA’s Title Insurance and Settlement Company Best Practices encourages title professionals to have a disaster management plan in place to help protect non-public personal information (NPI). According to ready.gov, the development of a business continuity plan includes these steps:

Business Impact Analysis

A business impact analysis (BIA) predicts the consequences of disruption of a business function and process and gathers information needed to develop recovery strategies. This involves identifying time-sensitive or critical business functions and processes and the resources that support them.

The BIA should identify the operational and financial impacts resulting from the disruption of business functions and processes. Impacts to consider include:

  • Lost sales and income
  • Delayed sales or income
  • Increased expenses (e.g., overtime labor, outsourcing, expediting costs, etc.)
  • Regulatory fines
  • Contractual penalties or loss of contractual bonuses
  • Customer dissatisfaction or defection
  • Delay of new business plans

The BIA should identify the critical business processes and resources needed for the business to continue to function at different levels. A BIA questionnaire can be used to survey office managers within the company.

The BIA report should document the potential impacts resulting from disruption of business functions and processes. Scenarios resulting in significant business interruption should be assessed in terms of financial impact, if possible. These costs should be compared with the costs for possible recovery strategies.

The BIA report should prioritize the order of events for restoration of the business. Business processes with the greatest operational and financial impacts should be restored first.

Recovery Strategies

If an office is damaged and business is impacted, financial losses can begin to grow. Recovery strategies are alternate means to restore business operations to a minimum acceptable level following a business disruption and are prioritized by the recovery time objectives (RTO) developed during the business impact analysis.

Recovery strategies require resources including people, facilities, equipment, materials and information technology. An analysis of the resources required to execute recovery strategies should be conducted to identify gaps. For example, if an office is destroyed by a natural disaster but other offices are readily available to make up lost production, then there is no resource gap.

Strategies may involve contracting with third parties, entering into partnership or reciprocal agreements or displacing other activities within the company. Staff with in-depth knowledge of business functions and processes are in the best position to determine what will work. Possible alternatives should be explored and presented to management for approval and to decide how much to spend.

Depending upon the size of the company and resources available, there may be many recovery strategies that can be explored.

Utilization of other owned or controlled facilities performing similar work is one option. Operations may be relocated to an alternate site. This strategy also assumes that the surviving site has the resources and capacity to assume the work of the impacted site. Prioritization of production or service levels, providing additional staff and resources and other action would be needed if capacity at the second site is inadequate.

Telecommuting is a strategy employed when staff can work from home through remote connectivity. It can be used in combination with other strategies to reduce alternate site requirements. This strategy requires ensuring telecommuters have a suitable home work environment and are equipped with or have access to a computer with required applications and data, peripherals, and a secure broadband connection.

Partnership or reciprocal agreements can be arranged with other businesses or organizations that can support each other in the event of a disaster. Assuming space is available, issues such as the capacity and connectivity of telecommunications and information technology, protection of privacy and intellectual property, the impacts to each other’s operation and allocating expenses must be addressed. Agreements should be negotiated in writing and documented in the business continuity plan. Periodic review of the agreement is needed to determine if there is a change in the ability of each party to support the other.

There are many vendors that support business continuity and information technology recovery strategies. External suppliers can provide a full business environment including office space and live data centers ready to be occupied. Other options include provision of technology equipped office trailers, replacement machinery and other equipment. The availability and cost of these options can be affected when a regional disaster results in competition for these resources.

There are multiple strategies for recovery of manufacturing operations. Many of these strategies include use of existing owned or leased facilities. Manufacturing strategies include:

  • Shifting production from one facility to another
  • Increasing manufacturing output at operational facilities
  • Retooling production from one item to another
  • Prioritization of production—by profit margin or customer relationship
  • Maintaining higher raw materials or finished goods inventory
  • Reallocating existing inventory, repurchase or buyback of inventory
  • Limiting orders (e.g., maximum order size or unit quantity)
  • Contracting with third parties
  • Purchasing business interruption insurance

There are many factors to consider in manufacturing recovery strategies:

  • Will a facility be available when needed?
  • How much time will it take to shift production from one product to another?
  • How much will it cost to shift production from one product to another?
  • How much revenue would be lost when displacing other production?
  • How much extra time will it take to receive raw materials or ship finished goods to customers? Will the extra time impact customer relationships?
  • Are there any regulations that would restrict shifting production?
  • What quality issues could arise if production is shifted or outsourced?
  • Are there any long-term consequences associated with a strategy?

Plan Development

  • Develop plan framework
  • Organize recovery teams
  • Develop relocation plans
  • Write business continuity and Information technology (IT) disaster recovery procedures: IT includes many components such as networks, servers, desktop and laptop computers and wireless devices. The ability to run both office productivity and enterprise software is critical. Therefore, recovery strategies for information technology should be developed so technology can be restored in time to meet the needs of the business. Manual workarounds should be part of the IT plan so business can continue while computer systems are being restored.
  • Document manual workarounds: If the staff is equipped with paper order forms, order processing can continue until the electronic system comes back up and no phone orders will be lost. Identify the steps in the automated process, creating a diagram of the process can help.
  • Assemble plan, validate and gain management approval

Testing and Exercises

  • Develop testing, exercise and maintenance requirements
  • Conduct training for business continuity team
  • Conduct orientation exercises
  • Conduct testing and document testing results
  • Update Business Continuity Plan to incorporate lessons learned from testing and exercises.


Contact ALTA at 202-296-3671 or communications@alta.org.

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