While you struggle to recover, your customers struggle to deal with the loss of your services. No matter how much they value your company, they need their supplies or services. And, if you're not prepared to deliver, your competition will.
But you can avoid this scenario if you prepare for the worst and develop a business continuity plan. Doing so requires a systematic approach, dedicated resources and support from each department. Your plan must address your company's specific operations and processes.
Here are some steps to help get you started.
The first step to any plan is to identify the project as a key business initiative. Appoint a lead person and dedicate the time needed to complete it.
This should be a full-time assignment. A lack of dedicated resources and commitment will doom the process.
Next, run what-if scenarios and see how your firm responds. Examine your processes, facilities, supply chain and infrastructure for these features.
* Threats. Determine what catastrophes may be in store for your company. What can damage from these events do to your operation, and how long would the impact last?
* Assets. Identify all the fixed assets, such as buildings and equipment, as well as intellectual property, goodwill, competitive advantages and other intangibles that are threatened.
* Controls. These are the existing systems, policies, devices and safeguards that address the threats to your assets.
Once you have this information in hand, you can close gaps that have obvious or immediately available solutions and determine a longer-range solution for addressing the others.
Analyze business impact
The risk analysis process can produce a dizzying array of potential threats. By analyzing business impacts, you can evaluate the threats and establish a hierarchy based on each level of business impact.
These include operating, financial and legal/regulatory impacts. Threats should be assessed by the impact of a loss and your tolerance for that impact. There will be losses that cannot be tolerated and those can be managed for some period of time.
Plan recovery strategies
Determine what resources will be needed and where they can be found. Also, are sufficient resources available within the organization, or is outside assistance needed? If you need to go outside, where will you go?
Don't forget the recovery and protection of vital data -- this is key to your company's survival. Analyze where the vital records are kept and how often they are backed up. Also, do you know how long it will take to retrieve and restore them?
Document the plan
Next, incorporate basic items into your plan, including what threats will activate it, a chain of command and specific duties and actions that will be taken to address the threat. Checklists to follow and resource data should be available, as well.
Phone numbers, names and addresses are critical to securing resources early -- you must get immediate access to supplies and materials that may become unavailable.
And, because you're planning for a crisis, assume the loss of the person with the plan or the system on which the plan is stored. Therefore, once your document is completed, print it off and distribute it to all key personnel.
Even the most comprehensive plan, if not rehearsed, is, at best, another binder for your office. Without exercising the plan, you will never know the weaknesses that need to be addressed, nor will your staff understand or recognize its value.
Maintain the plan regularly. As staff, suppliers and customers change, so, too, should your plan. Schedule periodic reviews of each section to ensure it is kept current.
And remember, success favors the prepared. Be prepared and be successful.
Chris Beckman is a certified fire protection specialist and a risk control consultant with 18 years experience in the insurance industry. He has experience as a life safety and security manager for commercial developers and has served on his community's fire department for 20 years, 11 of those as a chief officer. Reach him at firstname.lastname@example.org, (859) 578-3506 or www.sksins.com.
Any business can suffer a loss. Whether losses stem from internal or external sources, all have the potential to seriously impact productivity and reduce profitability.
An example of loss-control planning is in the contrast between two fires that occurred at different industrial occupancies in the Cincinnati area.
One fire occurred in a metalworking plant during the daytime. The plant was in full operation and the fire was immediately discovered, reported and responded to by the local fire department. But the fire grew to five alarms and the dollar loss was immense.
The second fire occurred in the middle of the night when a business was closed. A single automatic sprinkler activated and controlled the fire, and notified the local fire department.
The fire department responded quickly, completed extinguishing the fire and removed smoke from the building.
You may have heard about the first fire, but the second fire did not make the headlines. The critical difference was the presence of an automatic fire sprinkler system.
Always ready and reacts quickly
A properly installed and maintained sprinkler system provides a building owner with a system that is always ready and able to react quickly. Water is applied directly to the fire, thereby reducing its spread. The system also alerts the local fire department to the fire.
The most common sprinkler system is a "wet-pipe" system, which consists of water-filled pipes containing pressurized water. These pipes lead to individual sprinkler heads, which are spaced throughout the facility based on hazards. Fire codes require that the valves are locked open and electronically supervised or routinely inspected. With proper valve supervision and a sound water supply, the system stands ready 24/7.
The automatic sprinkler head incorporates a heat-responsive fusible element which releases the seal on the sprinkler head when the assembly reaches its operating temperature, allowing water to flow. Sprinklers can react quickly because they are spaced at intervals of 100 to 130 square feet -- much closer than a typical smoke- or heat-detection system. Sprinklers are now available with fast-response assemblies that can react even faster to detect the fire and deliver water.
Delivers water directly on the fire
While Hollywood portrays sprinkler systems activating all sprinkler heads at once, the reality is that these systems are much more efficient. Systems activate one sprinkler head at a time, in direct response to the amount of heat produced by the fire. The flow from a typical industrial sprinkler is between 20 and 50 gallons per minute, compared to an estimated 125 and 250 gallons per minute which are dispensed from a single fire department hose stream.
The National Fire Protection Association (NFPA) published a study of sprinkler activations and found that five or fewer sprinkler heads control 90 percent of the fires in protected properties. For wet-pipe sprinkler systems, more than 60 percent of the fires are controlled by one sprinkler head.
This efficiency has translated into an enviable record of controlling fires and reducing losses. NFPA statistics indicate that in business occupancies, reductions associated with automatic suppression equipment are significant.
53 percent for stores and offices (from an average of $25,000 to an average of $11,700 per fire)
64 percent for manufacturing properties (from $52,500 to $18,700 per fire)
Properly maintained automatic sprinkler systems are credited with reducing the chances of suffering accidental death due to a fire by one-half to two-thirds, compared to fires where such systems are not present. Mitigating loss through loss-control planning is one of the best weapons businesses can have in their arsenal.
Chris Beckman, certified fire protection specialist, is a risk control consultant with 18 years experience in the insurance industry. He has experience as a life safety and security manager for commercial developers, and has served on his community's fire department for 20 years, serving 11 years as a chief officer. Reach him at (859) 578-3506, email@example.com or through Schiff, Kreidler-Shell's Web site, www.sksins.com.