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

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.

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

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 Can’t Plan For Everything

Leadership

Preplan

No Plan = Decision Flurry

Can’t 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

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

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

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

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

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

List and define all variables

Best assumption

Most likely assumption

Least likely assumption

Steps of Contingency Planning Identify Estimate Formulate Develop Plans Establish Feedback Mechanism Develop Schedule of Resources Pro-forma Financials Designate people

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 ($$$$$$$$$$)

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.”

“ Plans are useless, but planning is useful.”

Hints For Getting Started Don’t Start Large Make a universal (non specific) plan Identify alternatives Make plan flexible

Don’t Start Large

Make a universal (non specific) plan

Identify alternatives

Make plan flexible

A Real World Example Simmons and Clark Jewelers Detroit, MI

Simmons and Clark Jewelers Detroit, MI

Detroit and NYC Blackout

Simons and Clark Jewelers Employee’s Followed Established Store Security Plan Closed all external gates Locked all doors Took care of all customers Put away merchandise

Employee’s Followed Established Store Security Plan

Closed all external gates

Locked all doors

Took care of all customers

Put away merchandise

Sit Down And Try It Let’s Plan a trip to drive to the store. What could go wrong? (Confine Events)

Let’s 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

Red = High Probability

Yellow = Middle Probability

Green = Low Probability

Trip To The Store Major Assumptions? Action Plan? Monitoring? Resources? Person doing it?

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

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.

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/0802minutes.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

“ Business Continuity/Disaster Recovery Lessons Learned from 9/11/01 – A Panel Discussion”. Retrieved October 5, 2003, from http://www.drj.com/groups/mcpf/0802minutes.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/rescorla.html Kite, Shane. “Blackout Inspires Cutting-Edge BCP Innovation”. Securities Industry News, Volume XV, Number 36, Monday, September 15,2003

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/rescorla.html

Kite, Shane. “Blackout Inspires Cutting-Edge 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

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

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