Why Organizations Invest in Business Continuity – Business Continuity 101

Why Organizations Invest in Business Continuity – Business Continuity 101

In the third piece of our Business Continuity 101 Series, we delve into why organizations invest in business continuity, dispelling common BC misconceptions, and explaining value-based BC investment.

A common point of confusion for new BCM practitioners is the why and how of implementing a business continuity (BC) program. What are, or should be, the drivers for implementation and on-going, continual improvement? Most organizations consider business continuity as a form of insurance or a cost to be minimized. We agree that BC is related to insurance; it is there to ensure that an organization remains whole during an emergency event. We would say that costs associated with BC should be appropriate. There is no reason to overspend on recovery solutions, but it is risky to underspend as well. BC should be implemented as any other function that is not profit generating.

Misconceptions on Why and How to Invest in BC

Here are some reasons organizations implement or invest in a business continuity program. These reasons are valid, but are often not where the actual value of the program comes from. Business continuity becomes a project with an end date and then stagnates, or is only something to check a box for audit purposes, with little functional capability.

  • It’s an audit requirement (internal or external). We often do only the minimum to meet audit requirements.
  • It’s an insurance requirement. Same as above.
  • We already have insurance; it will cover any losses. This may be true, but:
    • Actual losses are very different from intangible, long-term losses if a brand is impacted or customers are lost.
    • Insurance may not cover all costs or losses associated with an emergency event.
  • We are willing to take the risk and will do less than requirements suggest. This is a valid response, and depending on the risk profile, may be acceptable. Make sure you understand and document the actual risks and potential costs.
  • We only need to restore a few applications.
  • We will figure out what to do during the event. This is true, but it will take much longer to recover if everything is determined at event time. Actions and timing during an emergency are often different from day to day issues.

Value Based Investment in Business Continuity

  • Cost prevention. Costs can be in the form of regulatory fines or penalties, potential liability claims, and audit remediation. Insurance does not always cover these.
  • Prevention of damage to brand image or loss of corporate confidence. Loss of brand image or corporate confidence can have a long-lasting impact on an organization. Think about how your inability to provide services or information will affect:
    • Your customers
    • Your vendors
    • The general public
    • Regulatory agencies
  • Cost reductions and process efficiencies. A Business Impact Analysis (BIA) and Risk Assessment may identify areas where you can realize a reduction of costs associated with redundant technology or identify process efficiencies through a better understanding of internal dependencies.
  • Improved day-to-day support and resolution of issues. Emergency management and recovery planning often translate directly to an improved problem and issue resolution capability. They can also represent a decrease in cost because you address audit issues while implementing a BC program.
  • Better process and technology availability providing less downtime and more work efficiency.

Looking Through the Value Lens

As a BC professional, communicating the value and benefit of your program is as much your role as providing guidance on implementation. We can almost never say business continuity will have a positive return on investment in the formal sense of the term. However, when we look through the lens of value, the BC program provides demonstrable benefits. Understanding and communicating the value of your business continuity program will help your entire organization understand why BC is important and provide an incentive to work together to identify appropriate solutions, not just minimal solutions that allow them to check the box and move on.

Need more information to convince management to invest in a solid business continuity program? Read the first Business Continuity 101 guide, “What is Business Continuity?

“Why Organizations Invest in Business Continuity” is the third piece of our Business Continuity 101 series. We created the series for those new to BCM and those looking to improve their knowledge of the fundamentals of business continuity best practices. If you’re not sure where to start when it comes to BCM, we created this series for you. Read the previous post in the series: Disaster Recovery vs. Business Recovery.


Richard Long is one of MHA’s practice team leaders for Technology and Disaster Recovery related engagements. He has been responsible for the successful execution of MHA business continuity and disaster recovery engagements in industries such as Energy & Utilities, Government Services, Healthcare, Insurance, Risk Management, Travel & Entertainment, Consumer Products, and Education. Prior to joining MHA, Richard held Senior IT Director positions at PetSmart (NASDAQ: PETM) and Avnet, Inc. (NYSE: AVT) and has been a senior leader across all disciplines of IT. He has successfully led international and domestic disaster recovery, technology assessment, crisis management and risk mitigation engagements.

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