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Difference Between Business Continuity and Contingency Plan

Minor and major disruptions must be avoided at all costs for business survival. Most events that can cripple business operations are non-predictable including terrorist attacks, cyber-attacks and natural disasters including floods, earthquakes and fires. These cost businesses money, time, customer loyalty and market share. Since no one can predict future events and the ability of businesses to resume normal business functions, companies must hence put in place measures to ensure that businesses continue running even after these unfortunate events occur. Among these measures include business continuity plans and contingency plans. 

What is Business Continuity?

This is the ability of businesses to carry out their normal activities and function after unplanned events have occurred. These events could be a pandemic, a business crisis, natural disasters or even workplace violence.  Businesses should not only plan and prepare for major disruptions that will completely affect business operations but also events that could adversely affect functions and services. 

 A business continuity plan may entail but is not limited to: 

  • The team that will manage emergency events
  • Measures to ensure services and customers are availed to customers
  • Employee support measures 
  • Technological measures to restore business functions
  • Where to relocate people and processes in case business locations cannot be used
  • Measures to ensure staffing levels are adequate in the case of an unprecedented event

Among events that a business continuity plan will guard against include;

  • Natural and local disasters- These include fires, electronic malfunction, earthquakes and floods
  • Network disruptions- This is important for businesses that need a reliable connectivity to operate
  • Cybersecurity- Due to the rise of cybersecurity threats, businesses should ensure all data is backed up 
  • Human error- Outages can be caused as a result of innocent mistakes and ignorance, and should be mitigated 

What is Contingency Plan?

A contingency refers to activities or events that occur beyond the normal range of organizational operations. A contingency plan can, therefore, be defined as an actionable and defined plan that will be enacted if an identified business risk or unfortunate event occurs. Contingency plans are part of risk management and can be created for identified or non-identified risks. It can also be created to take advantage of strategic opportunities. 

A contingency plan is not only a need for large businesses as small to medium businesses can also be crippled by unforeseen events. They can also be tailored to specific departments. For instance, the need to protect, restore and use data in an organization may require an information services department contingency plan. 

Importance of contingency plans

  • Allow organizations to resume normal business functions as fast as possible after an unforeseen event has occurred
  • Minimizes consumer inconveniences
  • Identification of staffing needs in the context of recovery

A good contingency plan should include;

  • Natural disasters such as earthquakes, fires and hurricanes
  • Crisis including worksite injuries and accidents
  • Personnel such as strikes and employees deaths
  • Data loss
  • Product issues such as plan relocations
  • Mismanagement such as accidental destruction and theft

The process of developing a contingency plan involves the identification of essential business operations and sectors and determining how these processes can be affected by the occurrence of unforeseen events. Actions that would be needed to return these to normal operations should be identified and documented, including the resources that would be needed for this. A good contingency plan incorporates each functional area in an organization  

Similarities between Business Continuity and Contingency plan

  • Both entail enforcing measures for businesses to operate even after unprecedented events have occurred

Differences between Business Continuity and Contingency plan

Definition

Business continuity refers to the ability of businesses to carry out their normal activities and function after unplanned events have occurred. On the other hand, a contingency plan refers to an actionable and defined plan that will be enacted if an identified business risk or unfortunate event occurs. 

Concept

While business continuity is based on the concept of business survival after the occurrence of unprecedented events, contingency planning is based on the concept of preparation of all types of disruptions and steps that should be followed when these disruptions occur. 

Business continuity vs. Contingency plan: Comparison Table

 Summary of Business Continuity vs. Contingency Plan

Business continuity refers to the ability of businesses to carry out their normal activities and function after unplanned events have occurred. It is based on the concept of business survival after the occurrence of unprecedented events. On the other hand, a contingency plan refers to an actionable and defined plan that will be enacted if an identified business risk or unfortunate event occurs. It is based on the concept of preparation of all types of disruptions and steps that should be followed when these disruptions occur. 

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References :


[0]Naujoks U & Wieczorek M. Business Continuity: It Risk Management for International Corporations. Springer Science & Business Media Publishers, 2002. https://books.google.co.ke/books?id=pYUhzJCUpLkC&pg=PA60&dq=Difference+between+Business+continuity+and+Contingency+plan&hl=en&sa=X&ved=0ahUKEwjLjd2U4_fpAhUmx4UKHbMQCjIQ6AEIbzAJ#v=onepage&q=Difference%20between%20Business%20continuity%20and%20Contingency%20plan&f=false

[1]Andrew Hiles. The Definitive Handbook of Business Continuity Management. John Wiley & Sons Publishers, 2010. https://books.google.co.ke/books?id=iDyoSoeoDusC&pg=PT54&dq=Difference+between+Business+continuity+and+Contingency+plan&hl=en&sa=X&ved=0ahUKEwjDurKm4_fpAhUYHcAKHfUbDYM4ChDoAQg1MAI#v=onepage&q=Difference%20between%20Business%20continuity%20and%20Contingency%20plan&f=false

[2]Ken Doughty. Business Continuity Planning: Protecting Your Organization's Life. CRC Press, 2000. https://books.google.co.ke/books?id=vG2qvt7I6eYC&printsec=frontcover&dq=Difference+between+Business+continuity+and+Contingency+plan&hl=en&sa=X&ved=0ahUKEwjLjd2U4_fpAhUmx4UKHbMQCjIQ6AEIJTAA#v=onepage&q=Difference%20between%20Business%20continuity%20and%20Contingency%20plan&f=false

[3]Image credit: https://www.picpedia.org/highway-signs/images/contingency-plan.jpg

[4]Image credit: https://en.wikipedia.org/wiki/File:BCPLifecycle.gif

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