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How to Identify and Prioritize Risks in Business Continuity Management

How to Identify and Prioritize Risks in Business Continuity Management

An ever-increasing number of business leaders are placing increased emphasis on risk management as part of their overall business strategy. It’s a trend that we’ve seen since the COVID-19 pandemic — an event that revealed the true fragility of success in the business world. The pandemic left many company leaders and stakeholders shaken as they realized the many threats, risk factors, and vulnerabilities that had previously been unappreciated or under-appreciated.

Enter business continuity management measures, which can be implemented and deployed as part of a broader risk management strategy. With a carefully considered business continuity management strategy in place, a company will be well-positioned to react to challenges and even outright disasters — all while maintaining productivity and minimizing disruption to the company’s operations. But to achieve this, you’ll need to effectively identify and prioritize risk factors. This way, your response will align with your overarching business objectives and priorities.

What is Business Continuity Management? 

Business continuity management involves the development of a strategy and action plan that ensures the company continues to operate in the event of a disruptive incident or disaster. These disruptive events can take many forms, from a cyberattack to a natural disaster such as a hurricane or deep freeze.

Business continuity plans are often two-pronged:

Maintaining business functions and minimizing disruption

The best business continuity plans include a strategy and step-by-step plan of action that prevents a situation whereby operations grind to a screeching halt. This component of the business continuity strategy addresses the  “here and now” and the immediate aftermath of a disruptive event.  As such, the strategy usually includes short-term measures that are designed to both minimize disruption and speed recovery.

Promoting recovery and resuming business functions

A business continuity plan must also address the recovery period following a disaster or other disruptive event. This includes the development of a strategy and plan of action that will guide the business toward recovery in a fast and efficient way.

Developing a business continuity plan is just the first step on the path toward effective risk management. Business continuity management goes beyond planning and strategizing to include the careful evaluation of new, emerging threats. The world of risk management is ever-evolving with new threats, vulnerabilities, and risk factors emerging and changing over time. This dynamic nature demands periodic evaluation — the management aspect of business continuity management. Regular threat assessments will ensure that your company continuity plan consistently aligns well with the current risk management landscape.

Establishing a Business Continuity Task Force

Before you set out to identify and prioritize risks, you must establish a business continuity task force. Risk management initiatives must be viewed as ongoing efforts rather than a one-and-done project. As such, you’ll need to assemble a group to oversee this aspect of the company’s risk management efforts.

Developing, maintaining, and managing business continuity is a challenge due to scope and gravity, amongst other factors. An effective, on-point strategy demands insights from across the entire organization. There is no single person who has all of the necessary knowledge and insights. Gather individuals from a variety of departments and divisions to establish a task force that can oversee business continuity management.

It’s this group that shall perform the following tasks in an effort to identify and prioritize risks within the context of a company’s business continuity management efforts.

How to Identify and Prioritize Risks for a Business Continuity Plan

Beyond periodic reevaluation, you must identify, assess and prioritize the business continuity-related risks that are confronting your organization. This is essential if you’re going to be effective in your business continuity management efforts. But where do you begin? Consider the following steps.

Step 1: Identify the Known Risks and Threats

The first step is perhaps the most comprehensive: identifying the existing risks, vulnerabilities, and prospective threats that are confronting your business. This is where you’ll see a great benefit from assembling a task force with colleagues from across a variety of departments and divisions. They’ll be well-positioned to offer insights into the threats and risks that exist within their region of the business. In this step, we’re simply identifying the current and prospective risks that threaten operational continuity.

Step 2: Assessing Risks and Vulnerabilities

Now that you’ve identified existing and prospective risk factors, you’ll need to evaluate each one. The goal is to gain a full understanding of the dynamics and potential impact of each risk, threat, or vulnerability. What are the conditions or circumstances that have allowed a risk factor to arise? How can those conditions be mitigated? What’s the worst-case scenario in terms of the impact on your company? This last question is perhaps the most important when it comes to risk prioritization, which is the next step.

Step 3: Prioritizing Risks, Threats, and Vulnerabilities

To prioritize risks, you’ll need to consider the worst-case scenario and the potential impact on your business and its employees, customers/clients, operations, and interests. You’ll also need to consider what measures and resources are required to mitigate a given risk. A risk may be relatively easy to mitigate on a proactive basis. Some risks cannot be fully mitigated and eliminated; you may find that you can only minimize risk or vulnerability. As such, this is a point that should definitely be considered as you work through the prioritization process.

Step 4: Developing a Business Continuity Plan With Risk Management in Mind

Once you’ve identified and prioritized risks, you’ll be in a good position to develop your business continuity plan (or update an existing plan). With the dynamic nature of the risk management landscape, an organization’s business continuity plan should be reviewed and updated on a regular basis. This ensures that the plan can effectively accommodate new threats and risk factors that have evolved over time.

Addressing the Unknown Risks and Threats in Your Company’s Business Continuity Planning

While most risk factors, threats, and vulnerabilities can be identified before an adverse event occurs, there are some risks that you simply cannot anticipate or predict.

The COVID-19 pandemic is a great example of how profoundly an unexpected risk can affect a company. Nobody could have predicted the pandemic and its devastating impact on the business world and society as a whole. That said, an organization can take a proactive stance by identifying general types of risk, such as a sudden and dramatic shift in the consumer marketplace, a natural disaster, or a cyber event that takes out all of the company’s digital assets. With these scenarios in mind, you can develop a generic continuity plan that can be adapted and deployed if and when the need arises.

Using Risk Management Software to Support Business Continuity Planning

Business continuity management is nothing short of challenging and to be effective, you’ll need input and insights from across the entire organization. Risk management software provides the tools you’ll need to manage all of this information and plan effectively.

At iTech, we specialize in risk management technology, including software platforms designed to forward your business continuity management efforts. Our team works with the client to understand their exact needs and challenges. We’ll then develop a solution that goes beyond merely clearing those hurdles; our goal is to deliver technology that drives your risk management efforts forward while generating maximum ROI. Reach out to the iTech team today and let’s discuss your business continuity plan and your greater risk management strategy.