Business Continuity Planning: Scenarios vs. impact

The core aim of Business Continuity Planning is to ensure that an organisation can continue to deliver its products and services, minimise downtime and recover swiftly when faced with disruption.

There is a fundamental question, often posed when organisations begin: “should I plan for scenarios or impacts?” For example, should we have a plan for fire, flood, terrorist event and gas leak? Or should we instead plan for shared impacts such as the loss of premises?

The simple answer is that the only practical solution is to plan for impacts, not scenarios. The longer answer is that scenarios also have a part to play.

Scenarios play a vital role in bringing planning to life and making exercises ‘real’. In some cases, when a specific risk is highly likely, specific plans may be required to address that scenario. For instance, you may want a specific plan if your premises are located in an area likely to be targeted by terrorists or at high flood risk.

The increasing likelihood of cyber-attacks, along with their specific impacts, mean all organisations should have a plan specific to this threat. As we will explore, it is this practical element that makes impact-based analysis so important – and why organisations should continue to prioritise it over scenarios.

What is Business Impact Analysis?

A Business Impact Analysis (BIA) is the cornerstone of business continuity. By assessing the potential impacts of disruptions, a BIA establishes priorities for recovery, the timeframes for bringing systems back online and the resources necessary to achieve these goals.

It is a process that focuses on the impacts rather than the causes of a disruption. In other words, a BIA helps businesses to understand the consequences of losing critical functions and services, regardless of the event that triggered the disruption.

For example, you might conduct a BIA to determine the Recovery Time Objective (RTO) for key business processes. This establishes the speed at which operations must be restored to avoid severe financial or reputational damage.

The trend towards scenarios

The appeal of scenarios as a core part of a BCP stems from their ability to simulate and test responses to specific crises. In turn, this offers a practical method for decision-makers to understand the complexities of potential disruptions and their consequences.

Scenarios are also effective means of fostering engagement. Realistic, time-bound situations, enable employees and leadership teams to immerse themselves in the experience, helping them to practice decision-making under pressure.

Finally, they can highlight weaknesses in existing plans and reveal areas for improvement, ultimately strengthening readiness for future events. By confronting the ‘what-ifs,’ organisations can implement proactive strategies to manage potential risks.

Assessing impact

Despite the trend towards scenario-based exercises, focusing on impact remains the most crucial aspect of Business Continuity Planning. While scenarios can simulate specific threats, it’s impossible to predict every possible disruption.

Real-life crises rarely follow a neatly scripted structure, and focusing too much on specific threats can lead to an overcomplicated, fragmented plan that is difficult to implement. On the other hand, impact-based planning remains an adaptable and versatile solution.

While there are an infinite numbers of potential scenarios, each will have shared impacts on your organisations key assets. These can be broken down into P-P-R-S:

• People (skills and knowledge)
• Premises (buildings and facilities)
• Resources (IT, information, equipment, materials)
• Suppliers (third-party products and services)

Evaluating the outcomes of disruption (such as lost revenue or reputational harm) rather than the cause, enables organisations to ensure that their continuity plans are flexible enough to handle any event. To achieve this, a BIA is invaluable to highlight critical business functions, as well as the resources to restore them, regardless of the type of disruption.

Striking a balance

The key to effective Business Continuity Planning is to find a balance between impact and scenario-based approaches. While scenario exercises can be invaluable to test your organisation’s response capabilities and prepare for specific crises, the foundation of any continuity strategy must be built around impact.

In an ideal world, scenario-based exercises should be used to test the effectiveness of impact-focused plans. By combining these approaches, businesses can ensure they are both proactive (anticipating potential crises) and resilient (prepared to deal with that disruption).

Recognising the value of both is crucial to develop a robust and comprehensive strategy, ensuring that recovery efforts are focused on the outcomes that matter most to your business.