IT Management Reference Guide

This four-part series identifies the 13 cardinal steps needed to initiate and maintain a business continuity program. I base these steps on my experiences of implementing or refining business continuity programs at a large number of diverse companies. The order in which I present the steps are the prescribed sequence for implementation. Figure 1 summarizes these 13 steps.

Smaller companies may not have a dedicated business continuity function and may elect to combine some of these steps into a single function. For example, steps 3, 4 and 5 that involve threat analysis, vulnerability analysis and risk assessment, are all part of risk management and could be consolidated into one activity.

The lack of a dedicated business continuity function is not always due to the size of a company. One of my recent clients was a mortgage company that had a very well developed business continuity program. The firm's parent company was much larger but very little in the way of business continuity.

In Part One I cover the first four of these steps, and in Part Two I discuss steps five, six, seven and eight. Part Three describes steps nine through eleven, and Part Four concludes this series with a thorough discussion of the twelfth step on conducting an operational exercise.

Step 1: Acquire Executive Support

The first step in developing an effective business continuity plan is to acquire the support of executive management. Someone at this level needs to sponsor and champion the effort. Without this high level support, the program is doomed to failure. This is because resources need to be allocated, directions need to be set, policies need to be clarified, and priorities need to be established. High level executives such as Chief Risk Officers, Chief Security Officers, or Chief Information Officers are ideal candidates for this support because they have the authority, influence and visibility to garner the ongoing support of subordinates to make a business continuity program successful.

Figure 1 The 13 Cardinal Steps of a Business Continuity Program

Step 2: Conduct a Business Impact Analysis

A business impact analysis (BIA) consists of a prioritized inventory of critical business processes within a company. The intent of a BIA is to determine how long a business process could be idled during a disastrous event before significant financial, operational and business impact is felt. Two key measures associated with BIAs are recovery time objectives (RTOs) and recovery point objectives (RPOs). RTOs are the maximum desirable time a business process can be done before impact is felt; RPOs are the minimum desired amount of time of lost data. A prior section of this guide entitled 'The 12 Most Common Mistakes that cause BIAs to Fail' provides a more detailed explanation of how to conduct an effective BIA.

Step 3: Perform Threat Analysis

A threat analysis examines the likelihood and mitigation of business interruptions due to human malicious intent. Figure 2 shows a sample threat analysis matrix that I used a short time ago. While dozens of threats could be listed, these were the ten most common to the client in question. Obviously, you can tailor the matrix to fit your particular environment. The relative priority number (RPN) is the result of multiplying the numerical value of three criteria based on a 1-to-10 scale. The three criteria are the likelihood of occurrence (LO), the likelihood of non-detection (LN), and the overall potential impact to business operations (OI). Where applicable, footnotes (FN) describing noteworthy items are included. Following the matrix I list the footnotes I used at this client site.

Figure 2 Sample Threat Analysis Matrix

Footnotes

1. One bomb threat last year resulted in the evacuation of the building. Though the threat turned out to be a hoax, an evacuation like this can be disruptive and impact morale, productivity and customer service.
2. Managers rated this a likelihood of a 3 due to past history and the location and brand of the company.
3. There were two thefts of small office and computer equipment in the past year.
4. Some pranksters have set off alarms.
5. Relatively young workforce and high rate of turnover has resulted in some occurrences of disgruntled employees causing minor disruptions.
6. One occurrence of an employee acquaintance coming into the workforce, threatening the employee and acting belligerent.

Step 4: Perform Vulnerability Analysis

A vulnerability analysis examines the likelihood and mitigation of interruptions due to natural or man-made disasters (but not with malicious intent) that could impact business operations. Figure 3 shows a sample vulnerability analysis matrix that I used in conjunction with the threat analysis mentioned previously. While dozens more could be listed, these are the 16 most common vulnerabilities likely to impact my client's environment. A scheme similar to that used for the threat analysis is used here in which three criteria for each vulnerability are rated on a 1-to-10 scale, and then multiplied to arrive at a relative priority number.

Figure 3 Sample Vulnerability Matrix

Footnotes

1. Likelihood of a blizzard is high but overall impact is low. One on occasion during the past year employees were not able to drive into work until mid-afternoon, causing minor business disruption.
2. Overall impact is high, but only for extended power outages because a large supply of batteries supporting a UPS (uninterruptible power supply) can provide backup power for up to 20 hours.
3. Problems with critical software applications occur two to three times month causing significant business disruptions.
4. Ice storms are not uncommon but can normally be anticipated to minimize their impact.
5. Occasional network software failures result in some business disruptions.
6. Occasional software problems in the voice switch cause minor business disruptions. The voice network at the primary facility was successfully switched over to the backup facility during one of these incidents.
7. Three air conditioning problems last Fall but did not cause any business disruptions. A new maintenance contract was put in place in December and there have been no additional incidents since that time.

This first installment of the four-part series on the 13 cardinal steps of a business continuity program discussed the first four steps of executive support, business impact analysis, and performing threat and vulnerability analyses. In part two I cover the next four steps of this series consisting of risk assessments, high-level and detailed recovery strategies, and the number and scope of business continuity plans.