A Business Interruption Doesn't Have to Be a Disaster

Year in and year out, businesses in hurricane or stormy regions face the same risks of property damage and loss. This type of threat marks a good time to update a company's business continuity plan and business insurance. After all, one would like to have their business go uninterrupted if at all possible.

Here are just a few things to consider during those times of year when business interruption might take place.

Update Critical Business Functions

Implement a program that includes forms that can help to prioritize which business functions are most critical for continuing operations during an emergency situation.

Critical business functions can change from year to year. Review any existing disaster plan to account for any changes (such as the addition of new business systems, products and employees).

Verify Employee Contact Information

One of the most important components of any business is accurate contact information. This is even more critical in an emergency situation. Knowing how to reach employees, as well as vendors, is a vital part of helping the business to quickly recover from a disaster.

On an annual basis, send a memo asking employees to update their contact information. This will help to check on their current status and aid in the next steps for resuming normal business operations.

Updating supplier and vendor contact information, as well as other important contacts such as bank or insurance carriers will also aid in a speedy recovery. Make sure that business insurance is adequate and also meets current needs in the face of such disaster.

Disaster Preparedness Checklist

Three important things to consider during a crisis:

How much downtime can this business endure without a significant financial impact? Which functions are necessary in order to fulfill both legal and regulatory obligations? What business functions are essential for maintaining market share and reputation?

Ways in which to deal with these issues:

Be sure to prioritize each function (high, medium or low) and determine who among the staff is most capable to perform the necessary tasks. Record detailed notes outlining the steps that should be taken in common disaster scenarios, such as: Power outages Damage to equipment Natural disasters Work with employees so that they fully understand the procedures for recovering the critical business functions. Name an alternate employee to take charge should the primary employee be unavailable to perform the function.

Advance planning will help everyone to recognize his or her responsibilities.

Prepare A Recovery Location

If plans include the use of a recovery location (which is an alternative site for business operations), take time to review employee and business needs to be certain the location is quite adequate.

Be sure the location is equipped with any special supplies or equipment that will be necessary to continue business operations. It is also a good idea to contact the recovery location provider before the season starts to review plans and ensure that requirements are current and specific.

Having a good plan, and also the business insurance needed to get things "back on track" is essential to any solid business plan.

Business Architecture And Profit Centers

Business Architecture is about using architectural concepts in organizations. It is not only about design, but also about filling the organizational space with constructions; the various forms that you have chosen to implement a functional need in order to serve a certain purpose.

There are many functions in a company. A general function that is not specific to a certain purpose is the organizing activity itself. So besides having the function of Sales, Production, ICT and administration, there is also the function of organizing general activities. This could apply for any type of organizational unit within the company. Competition is a characteristic you could use to design an organization.

Before you design a new organizational structure (the construction to fit the characteristics) you also need to think about the main purpose. For (business) units the purpose is to serve a group of different clients. Profitability measures are needed to analyze the performance of each group. If the market circumstances change, the unit could shift its focus or increase incentives. Increase the competitiveness.

So far so good. The profit center issue is concentrated around other "units" like ICT, finance, Human Resources, etc. In literature you will find objections to convert these organizational parts to profit centers because the profits (more than the costs) can not easily be measured.

Another aspect why profit centers do not fit for these TYPE of (inter) organizations is often less attended. A profit center, like a business unit, requires a competitive organization. And supportive types of organizations like ICT, administration and Human resources are not competitive (that's why they are called supportive).

The rule for a competitive organization is that more resources should help to produce more output. For the same reason, incentives are possible for such kind of organization, where they are not driving the supportive organization.

To give an example: if you would ask four people to lift a car, and they manage, it is of no use to ask another four people to help them. The car is lifted (supporting) and that's it. More support is of no use.

Implementing a profit center requires a previous analysis. An Architectural view on your business might help solving bottlenecks. Be careful not to change organizational structures too soon.

© 2006 Hans Bool