Thus, more attention is put on business continuity planning (BCP), which puts the company in a proactive position in planning how to ensure that it will still be able to deliver its critical products and services safely and smoothly, while meeting its legal, regulatory, and other obligations.
We can probably enumerate more than a dozen reasons why businesses should create and maintain BCP initiatives but, at the end of the day, there is only one ultimate goal or purpose for it, and that is to help ensure that the organization, business or company has the required resources, information, and capabilities to deal with emergencies and similar unexpected events, particularly their aftermath.
Of course, if profitability gets a major hit, this will also have adverse effects on business growth strategies.
Business disruptions usually lead to the company spending more on incidental expenses in order to do some damage control.
Other businesses will have apprehensions about continuing any partnership they have with the company, and they may even consider severing any ties they have with that business.
This will definitely make recovery more difficult for the business, even long after the crisis has passed.
For example, if the disruption is caused by a blizzard leading to the closure of manufacturing facilities, there is a high chance that the facilities have been damaged, and will require some major repairs.
Salvaging remaining equipment and machinery will also entail spending on transportation and hauling services.
In a study of mid-sized companies that suffered a major disaster and had no contingency planning in place, it was revealed that, on average, their downtime cost amounted to ,000 per hour. When their usual source of a specific product or service becomes unavailable, or unable to deliver their goods, customers will naturally look elsewhere for other sources.
Even the most loyal customers may be swayed out of their loyalties if the business fails to rise to the occasion.