Guide to Business Continuity Planning (BCP) for Singapore SMEs

Business Continuity Planning

With Singapore fighting against the coronavirus outbreak, companies are encouraged to devise and implement a business continuity plan to reduce business disruptions and make sure they remain viable during the pandemic. It may include separating employees into teams that can work at distinct times or locations. Staff may also be cross-trained and have shifting or flexible work arrangements.

 

What is the Business Continuity Plan (BCP)?

A Business Continuity Plan is a process involving outlining the possible effect of unexpected or disastrous events which may result in a devastating impact on businesses. The plan consists of policies to respond to such situations to help companies minimise disruptions, build resilience, recover quickly and resume normalcy. The main objective of this plan is to protect the employees and assets during and after the event.

Generally, a BCP is created before a disaster even occurs and involves the primary stakeholders and company secretary. The role of a corporate secretary is of paramount importance during a crisis, business disruption and in any business continuity plan.

 

What are the Emergency Events that Called for BCP?

Emergencies that require the creation of a business continuity plan are circumstances that prevent companies from carrying out routine operations. These events may include the following:

  • Natural disasters, such as tsunami or tornado
  • Terrorism and bomb threat
  • A security breach or active shooter
  • Cyberattack
  • Staff injury
  • Power outage
  • Change in the chain of command

Regardless of the circumstances, companies should outline potential threats and create a BCP to make sure their operations will proceed as normal as possible amidst the disaster.

During these events, a company secretary has statutory obligations to help the company accomplish the following:

  • Meet deadlines for regulatory filings
  • Prevent fines and penalties
  • Hold board and shareholders meetings
  • Communicate with shareholders and stakeholders
  • Maintain regulatory records
  • Dissolve a company in a compliant manner

 

Why Do BCPs Matter?

A business continuity plan is a critical element of any SME since threats, disasters and disruptions may result in a massive loss in profit and higher restoration expenses for the company. To strive in the competitive business environment, SMEs cannot always rely on insurance alone, especially when it comes to covering all cost associated with these situations.

Moreover, proactive plans can benefit SMEs in three ways:

  • The company is more prepared to manage the unexpected future
  • The company can recover quickly from the disaster and keep offering quality services to clients
  • The company can better protect its reputation, credibility, and revenue streams

 

What Should a BCP Include?

A business continuity plan is different from business to business. Business owners would want to customise their BCPs to meet their specific needs. The BCP may include some or all of the following:

  • Policy, scope and purpose
  • Objectives
  • Risk reduction plans
  • Lists of assignments needed to maintain operations
  • Explanation of floor plans and exit route should an emergency occurs
  • Details on essential back-up plans for employees, internal and external stakeholders, facility and inventory, data and IT systems
  • Contact details of management staff
  • Coordination with local emergency staff

What are the essential steps needed to build an effective BCP?

Here are the essential steps to creating a basic business continuity plan.
 

Step 1: Create a BCP team

A BCP team will be the one responsible for implementing and executing the BCP. The makeup of such a group depends on the SME’s size and how it plans to roll out the program. A BCP team should at least has a manager, an assistant manager and an administrative assistant from every department. They will prepare standards for the plan, train more team members, and determine processes for smoother project flow.

 

Step 2: Perform Business Impact Analysis

Once a BCP team is assembled, the next step in business continuity planning is to identify and understand the potential operational, physical, and financial risks that the SME may face during the disruption. The team can determine these risk types via a business impact analysis or BIA.

BIA is complex and usually need a comprehensive questionnaire to collect all the essential information. Once the team has created a list of possible risks to the company, they may proceed to discuss how these risks could impact the company’s business performance in terms of reputation, financial, and supply chain activities. The team should also review and perform follow-up confirmation to verify the information and include any omissions.

 

Step 3: Recognise Resources Required with the Gap Analysis

Gap analyses help determine the SME’s recovery needs as opposed to its current resources. It also shows potential recovery options and agreed-upon plans.

 

Step 4: Identifies and Implement a Recovery Plan

While knowing the risks to the companies is critical; knowing how to react and recover during an unexpected situation is more significant. Hence, the last step in business continuity planning involves identifying recovery strategies in the business and an explanation of how to implement them. This step includes devising back-up and management plans to meet the demand for manufacturing, sales, products and services.

 

Regular Review and Update of BCP

Every BCP is different and is never truly completed. Its revision depends on the SME’s need. The company should test the BCP results, provide recommendations and make improvements. Most BCPs need a review once every year, while others need to be revised every time a product or environment changes.

The company should set up a standard review schedule to ensure the BCP is current and updated regularly or as needed. The company can do so by incorporating the BCP into all business decisions, assign roles for the plan’s periodic review and conduct regular tests and audits.

 

Conclusion

Business continuity plans are a crucial part of any company in Singapore, and in any business across the globe for that matter. It helps the company to recover fast during unanticipated events and minimise business disruptions. Hence, Singapore SMEs should create an effective BCP now instead of waiting to develop one when a disaster strikes.

Posted in Company Secretarial Service.