In this guide, we’ll explore business continuity from the CIO’s perspective, with an emphasis on the role of digital transformation, digital resilience, and digital skills.
The digital age has proven nothing if not disruptive, especially after the outbreak of COVID-19, which pushed business continuity to the forefront of many organizations’ agendas.
Perhaps unsurprisingly to some, organizations’ digital capabilities – in particular the digital savvy of their workforce – impacted their ability to maintain continuous operations during these difficult times.
- Organizations with remote working capabilities were able to adapt to the new normal far more easily and quickly
- Digitally skilled workers were more productive and required less training than those with fewer digital skills
- An organization’s overall digital maturity correlated closely with its ability to pivot and maintain business continuity
Digital adoption and transformation, as we will see below, should play key roles in an organization’s business continuity efforts.
However, before covering the digital aspects of business continuity, we should first examine the fundamentals of this important business field.
The Basics of Business Continuity
Business continuity management is focused on protecting, maintaining, and restoring an organization’s key business functions in the event of a disruption.
Such disruptions can include a wide number of events, such as:
- Natural disasters
- Supply chain disruptions
- Power outages
- Workplace accidents
Each of these can severely disrupt an organization’s day-to-day operations, which can have a profound impact on business functions and ultimately the organization’s bottom line.
Successfully responding to such disruptions requires preparedness and pre-planned responses – that is, business continuity plans.
The Benefits of Business Continuity Planning
A well-structured and well-executed business continuity plan can…
- Protect key business functions. When disruption strikes, it is critical to protect the most valuable business functions, such as the customer experience and employee productivity. Interruptions to core business functions such as these can cause significant harm to an organization’s bottom line profits, its customer relationships, and its marketplace performance. Strategies for protecting these functions will vary from scenario to scenario – remote working, for instance, can maintain employee productivity even if the physical worksite is compromised.
- Restore lost assets and operations quickly and efficiently. Certain measures can help an organization maintain operations during a disruption, though these are often temporary. Once feasible, continuity managers should begin restoring normal functions as soon as possible. Remote working, as mentioned above, may help employees stay productive if they cannot work on location at the organization. However, in most cases this arrangement would only be temporary and workers would return to the office after the disruption has passed.
- Improve trust and credibility among customers and partners. Business continuity plans instill confidence in an organization’s customers and business partners, as well as employees. After all, all of these groups have a vested interest in the continued success of an organization. Maintaining business continuity plans assures stakeholders that their investments are safer and more secure. In turn, they will feel more confident when placing their trust in the organization. In turn, this increased trust can act as a marketing tool to help improve an organization’s reputation.
- Ensure compliance with government regulations. Governments often regulate certain industries, such as healthcare or finance. Since customers’ well-being often depends on the smooth operations of organizations within these industries, these regulations are certainly understandable. For organizations, though, this means that business continuity plans are not just a luxury, they are mandated.
- Minimize the negative impacts of disruptions. Ultimately, a company’s ability to minimize the disruptions to its business operations will result in fewer losses, improved profits, a better customer experience, and more. Reducing the negative effects of a business disruption is arguably the most important benefit of all, since those losses can have significant impacts on the organization’s short- and long-term health.
Proper preparation can make an enormous difference in an organization’s ability to maintain operations during major business disruptions and, in some cases, it can mean the difference between survival and failure.
To better understand the nuances of business continuity, let’s answer some of the most frequently asked questions about the topic.
Frequently Asked Questions (FAQ) About Business Continuity
Here are a few commonly asked questions – and answers – that can shed some light on business continuity and the field of business continuity management.
How do you create a business continuity plan?
Business continuity planning requires foresight, planning, and strategy.
Here are a few of the most important components of the continuity planning process:
- Risk assessment. Different businesses will face a variety of risks from a number of directions. Not all of these risks will pose an equal threat to the organization or its employees. For instance, earthquakes will pose a greater threat to businesses that exist in earthquake-prone areas than to those that do not. Fires, however, should be planned for by every organization, since they pose a risk to virtually every organization.
- Business impact analysis. While a risk assessment gauges how at-risk an organization is to certain types of threats, a business impact analysis determines the actual effect that these would have on the business. By measuring time, duration, and other key variables, this analysis can help business leaders prioritize their continuity strategies and response plans.
- Strategy development. Different disruptions should be addressed with different solutions. Each strategy should be tailored to the type of disruption, the organization’s capabilities, the business environment, and so forth. In some cases, the same strategies can be applied in multiple circumstances. Remote working, for instance, can be a viable strategy for protecting businesses during disruptions that compromise the workplace, such as natural disasters, power outages, or the outbreaks of illnesses.
- Protecting key business functions. A business continuity plan’s first aim should be to protect the organization’s most important business units and functions. An organization that cannot deliver goods and services to its customers, for instance, will quickly start to lose customers and profits. Temporary or alternative avenues for protecting business functions should therefore be designed into every continuity plan, which should remain in place until it becomes possible to restore normal business operations.
- Restoration and recovery activities. Once conditions permit, continuity plans should aim to restore normal operations as quickly as possible. The aforementioned strategies, such as remote working or relocation, will be relinquished in favor of standard operating procedures and functioning. However, in certain circumstances, the business environment itself may change permanently, requiring an organization to transform its operations and its overall strategy. This is why a comprehensive approach to organizational resilience is so important, as we discuss below.
Business continuity planning is a specialized process that is usually delegated to business continuity managers, though smaller organizations may sometimes assign this responsibility to internal staff. Business continuity plan templates can be a useful resource for those companies that want to design their own continuity plans.
What are the challenges to implementing business continuity plans?
Despite the benefits of continuity planning, many organizations hesitate, for a variety of reasons:
- Lack of buy-in
- Resistance from already overworked staff
- Budget constraints
- Lack of expertise
- Inadequate IT infrastructure or maturity
There is naturally no way to circumvent all of these obstacles, though many of these challenges can be mitigated with the proper preparation. For instance, the proper digital transformation efforts can improve an organization’s overall digital maturity and employees’ digital skills, as we will see later.
Disaster recovery vs. business continuity: what’s the difference?
For many professionals, disaster recovery and business continuity are nearly synonymous: both are designed to protect and restore key business functions.
Others, however, maintain a stark distinction between the two.
Business continuity, these experts state, focuses solely on protecting and maintaining business operations.
Disaster recovery, on the other hand, focuses on the restoration and recovery of lost assets and business functions.
Understanding the distinction between these two aims is certainly important, as is the understanding of how these terms are used.
Even more important, however, is the difference between business continuity and related response plans, such as:
- Emergency response plans. An emergency response plan is initiated immediately after an emergency occurs. These plans prioritize the protection of human life, followed by the security of business assets and processes. Fires or certain severe weather events, for instance, would be classified as emergencies that can endanger human life – once people’s safety has been assured, then businesses can move forward with other types of response efforts.
- IT disaster recovery plans. An IT disaster recovery plan, as the name suggests, is specifically designed to restore lost IT functions and assets. These plans may be included within a business continuity plan or they may be executed alongside them.
- Crisis communications plans. Communication plays a very important role during any crisis, and effective communication will actually impact the outcome of crisis management efforts. During an emergency response, for instance, effective communication can make a difference in how people respond to the effort, as well as how the response is perceived by stakeholders.
All of these types of response plans have different purposes and will be implemented in different scenarios. In some cases, a disruption or disaster will call upon multiple plans to be enacted simultaneously or in succession.
Preparation for disruption, in other words, requires not only business continuity planning, but other types of preparation as well.
Business Continuity, Digital Resilience, and the Next Normal
Business continuity plans, as we saw above, are response plans that can help an organization maintain operations and reduce losses in the event of a disruption.
However, continuity plans and other response plans are only one approach to mitigating the risks associated with business disruptions.
According to many experts, business continuity is only one facet of a more comprehensive approach to mitigating disruption, which is known as organizational resilience.
Business Continuity vs. Organizational Resilience
Since disruption can strike at any time and without warning, response plans are certainly necessary.
However, there are many other business disciplines that can help an organization mitigate risk and stay prepared, including:
- Risk management. Risk management is the management discipline devoted to the assessment and management of a wide variety of threats, such as natural disasters, workplace accidents, economic threats, and so forth. In some cases, business continuity plans represent an appropriate risk management strategy. However, there are many other potential strategies that can be used to prevent and mitigate risk, such as those discussed next.
- Human resources. Human resources can improve organizational resilience in a variety of ways. An organizational culture that prioritizes learning, agility, and digital skills, for example, will be better able to cope with a wide variety of disruptive changes. Effective training, likewise, will improve a workforce’s ability to operate in difficult or new conditions.
- Information security and cyber security. Disaster recovery plans can help an organization respond effectively to cyber attacks or other IT threats. But a robust cyber security program can make those efforts entirely unnecessary, preventing many incidents before they even occur.
- Digital adoption. Becoming digitally mature and resilient requires an effective digital adoption program, which means that new users should be onboarded and trained continuously and efficiently. Having a digitally savvy workforce will, as mentioned, ensure that employees can use digital technology productively, which is a necessity when businesses are facing disruptions.
An effective organizational resilience strategy will be composed of multiple strategies and disciplines, both reactive and proactive.
There are a number of approaches and frameworks that describe organizational resilience, and it pays to research these ideas and develop one’s own perspective on the subject.
Regardless of one’s approach to organizational resilience, however, it is undeniable that digital technology should play a central role in any organization’s business continuity program.
Why Digital Transformation Is Essential for Continuity Planning
In the digital era, technology is the machinery that powers the modern organization.
Since that technology continually changes by the day, digital transformation ensures that businesses can keep evolving and stay competitive in the changing economies.
Yet when it comes to business continuity, there are other reasons to invest in digital transformation.
On the one hand, the continued operation of that digital technology is critical for restoring key operations during business disruptions. This is why IT disaster recovery plans and software are so valuable in today’s business environment.
On the other hand, an organization that is digitally mature – and a that possesses a digitally savvy workforce – will be better able to maintain operations during difficult times.
Most organizations, however, have hesitated and not yet completed their digital transformation journeys. Or, in many cases, they have not yet embarked.
There are many reasons for this, ranging from a lack of demonstrable ROI to budget restrictions.
Regardless, what has become apparent in recent years, especially during the COVID-19 crisis, is that digital transformation is no longer an option, it is a necessity.
The “Next Normal”
The COVID-19 crisis demonstrated the importance of remote working, digital resilience, and digital transformation.
Organizations that were more agile and digitally mature were better able to transition to these new business conditions, protect key business functions, and maintain operations.
As of this writing, these conditions are ongoing, and there is no way to know exactly how long they will continue.
However, even after the COVID-19 business impacts come to an end, we must still live with the knowledge that such circumstances could reoccur at any time. COVID-19, after all, was not the first outbreak in recent years, nor will it be the last.
For this reason, certain business experts, such as McKinsey, have coined the term, “the next normal,” to describe how the COVID-19 outbreak will impact tomorrow’s business landscape.
Forward-thinking organizations, therefore, are not planning for a return to yesterday’s business environment, they are redesigning their businesses to operate in tomorrow’s uncertain landscape – that is, the next normal.
Setting the Proper Goals for Digital Transformation Programs
In order to build digital resilience and organizational resilience in the modern organization, digital transformation agendas must explicitly reflect these aims.
To this end, digital transformation programs should set strategic goals that aim to improve:
Digital resilience refers to an organization’s ability to maintain, change, or recover lost IT-dependent operational capabilities.
Like cyber security, this capability is essential for the smooth recovery from disruptions.
According to some experts, cyber security is an important component of digital resilience, but security is too narrow a focus.
One article on CSO, for instance, points out that in “a constantly evolving digital environment, organisations must be able to move quickly and seamlessly to adopt new digital technology solutions and then to recover, rebound and move forward if things go wrong.”
To build resilience, it is important to understand that an organization’s digital capabilities and successes are composed of several components:
These three components are interdependent and represent both risk and potential value.
On the one hand, that is, each component represents the potential for growth and value delivery, but on the other, failure in any one area can cascade and impact other areas.
Risk mitigation and business continuity strategies for these areas should naturally be tailored to suit the needs of the individual organization. However, the areas covered below can provide a good starting point for improving each of the aforementioned components.
The digital workplace embeds technology into the workplace and leverages that technology to improve workflows, business processes, and the work environment.
The adoption of new technology opens up vast new potentials for businesses in the modern era – but only if that technology is adopted efficiently and utilized to its fullest extent.
In part, the full utilization of technology means using it to enhance workflows and upgrade outdated business processes.
For example, leveraging technology opens up new avenues for digital workers, such as:
- Remote or mobile working
- Asynchronous communication
- Online collaboration
- Task automation
These are just a few of the countless process and workflow changes that can improve an organization’s performance, agility, and resilience.
For example, digital technology is crucial to supply chain adaptability, which has a dramatic effect on an organization’s ability to respond to disruptions that impact the supply chain.
An organization’s digital maturity represents its overall digital capabilities.
First and foremost, this means adopting modern technology and modern business processes.
Businesses with high levels of digital maturity have modernized…
- IT infrastructures
- Technology stacks
- Digital workflows
- Digital workplaces
Also, and just as importantly, they have a digitally savvy workforce that can make use of its modern tools and infrastructure.
If employees lack digital skills, then an organization’s digital tools will be of little value. In fact, one of the largest impediments to successful digital transformation is a lack of digital skills.
Employee productivity and organizational performance, after all, depend directly on workers’ skills with their tools.
However, there are a number of factors that make training difficult in the modern organization, such as:
- Organizations’ continual adoption of new technology
- Software that is continually updated
- Employee turnover
Fundamental digital literacy training – alongside selective hiring practices – can significantly enhance a workforce’s ability to operate in today’s ever-changing work environment.
Having a base level of digital savvy and digital literacy can increase employees’ ability to adapt to extenuating circumstances, especially when combined with the proper digital adoption strategy.
In today’s marketplace, organizations continually adopt new tools and workflows, making digital adoption a key piece of every digital transformation agenda.
Digital adoption is a permanent business function that streamlines software onboarding, user training, and ongoing skills development – since software adoption is continuous, digital adoption should also be continuous.
Of course, these should also be complemented by cyber security and IT disaster recovery programs, as mentioned earlier.
When implementing these digital change agendas, as with any other change program, it is important to follow a well-structured approach to change management.
How to Implement and Manage Digital-First Change Programs
Change management is the discipline dedicated to managing the implementation of any organizational change, including digital transformation programs. Since digital transformation programs can be so complex, lasting several years or longer, it is that much more important to implement a structured approach to change management.
There are, after all, a number of major benefits to implementing a structured change management approach, including:
- Improved program outcomes
- Decreased friction, frustration, and resistance from employees
- Shortened project timelines
- A greater chance of success
Below, we will look at some of the key steps to follow when implementing a change project, which are common to most change management frameworks.
There are a number of assessments that should precede any organizational change effort.
Common assessments include those that cover:
- Change readiness. Change readiness refers, as the term implies, to how ready an organization is for change. In large part, this refers to how ready the employees and the leadership are to support a change. Change readiness should also, of course, be predicated on whether the organization’s capabilities and infrastructure are capable of implementing change.
- Organizational culture. An organization’s culture plays a large role in many aspects of an organization’s performance. Culture can impact employee productivity, their willingness to change, their digital skills, and more. Understanding that culture will offer insight into how employees will perform during change programs as well as during business disruptions.
- Digital maturity. Digital maturity assessments will determine the organization’s overall digital capabilities. Useful measures, as covered in the section on digital resilience, will analyze people, processes, and technology. By assessing each of these areas against a digital maturity model, it will be possible to gauge the maturity of one’s own organization.
- Digital skills and training needs. Digital literacy and digital skills will directly affect how well employees can implement digital transformation programs. While it may be tempting to provide ad hoc training suited for a specific transformation program, it is more important to develop a permanent digital adoption function that will provide streamlined onboarding and training at all times.
Each digital transformation agenda will have its own specific aim, so these assessments should be tailored to fit the aims of the program.
Other tests and analyses, such as gap analyses and SWOT analyses, should accompany the aforementioned assessments.
If an organization has the resources, it may be advisable to hire a change management consultancy or develop an in-house enterprise change management function – the greater the expertise, after all, the better the outcomes of the change program.
Design a strategy and a plan
It is quite possible that the digital transformation agenda will comprise multiple strategies and aims, including those that extend beyond business continuity.
However, for the purposes of this article, we will assume that the digital transformation program is solely focused on business continuity and organizational resilience.
In that case, a digital change strategy would revolve around the strategic aims covered above, such as digital maturity, digital skills, and cyber security.
Follow change management best practices
When implementing any change program, change management professionals often stick to frameworks that revolve around change at the individual level – that is, they focus on helping employees change, rather than on the logistics of software deployment and implementation.
Those elements are certainly important, but software deployment rarely represents the main challenge during digital transformation and adoption program.
Instead, the biggest obstacle is often earning employees’ trust and motivation.
One example of a change management framework is Prosci’s ADKAR framework, which consists of five stages:
- Build awareness of the need for change
- Cultivate a desire to support the change program
- Provide employees with the knowledge of how to change
- Ensure that they have the ability to demonstrate skills and behavior
- Reinforce changes to make sure that it sticks
Though there are several change management frameworks with different stages, they all tend to focus on the same main elements.
John Kotter’s 8-step model, for example, has different stages and a different roadmap, but the core focus remains the same: motivate and engage employees in order to streamline change.
For more information on change management, change management models, and best practices, visit our change management blog.
Implement, manage, and monitor
When implementing any business process change, organizational change, or digital transformation program, there are several tips that can help improve program outcomes.
Here are a few points to keep in mind:
- Leadership is just as crucial as management. Change leadership is the force that drives change, while change management keeps change programs organized and on track. Effective leaders, such as CIOs and those sponsoring change programs, should take a hands-on approach by embodying change and leading from the ground. This will improve employee motivation and engagement, which will in turn improve the outcomes of the change effort.
- Track performance carefully and respond in real-time. It is rarely possible to foresee all obstacles that can interfere with a change program. For this reason, change management metrics and KPIs should be tracked continuously. A change management approach that is both agile and data-driven will allow managers to respond quickly to unforeseen circumstances.
- Modify program goals or methods if needed. At times, it may become necessary to perform major pivots. For instance, the COVID-19 crisis undoubtedly forced many organizations to reevaluate and re-engineer their long-term digital transformation efforts. Given the stakes and the costs of such transformation efforts, managers should be willing to rebuild programs when necessary.
Agile, in other words, does not just apply to software development. It also applies to change management, digital transformation programs, and many other business areas.
Digital transformation and adoption, as we have seen, are becoming more and more vital in the context of business continuity.
By building digital skills, digital maturity, and digital resilience – among other capabilities – an organization will not only improve its day-to-day performance, it will increase its ability to cope with major business disruptions.
However, change is rarely easy and it is not always welcome. To enact digital change within a business, it is crucial to pay close attention to the human element.
Applying a structured approach to change management can significantly improve the outcomes of a digital transformation project, while also improving employees’ motivation and engagement.
Given the rate of change in today’s business landscape, it is critical to find ways to improve agility, streamline the adoption of new technology, and increase the speed of new change projects. Organizations that can accomplish these aims will be far more capable of handling future disruptions, both to the business and to the global economy.