How To Develop A Company Disaster Plan

HOW TO DEVELOP A COMPANY DISASTER

RECOVERY PLAN

(aka: Planning to Survive)

Jennifer H. Elder, CPA, CMA, CFF

Copyright Jennifer Elder, CPA October 27, 2008


Charlie: August 9 – 15, 2004Cat 4

Frances: September 4 -5, 2004Cat 4

Jeanne: September 25, 2004 Cat 3

Phone System: August 2007

OBJECTIVES

Why do you need to plan?

What do you need to plan for?

How do you create a plan?Copyright Jennifer Elder, CPA October 27,

2008

WHAT DO YOU KNOW ABOUT DISASTERS?

DISASTER TRIVIA!!!


TYPES OF DISASTERS Natural - flood, snow, hurricane, lightning Health – swine flu Accidents – fire, explosion, equip failure Terrorism - ???? IT - cyber attack, equipment malfunction Workplace Violence - shootings Contamination - chemical, biological Loss of key personnel – sudden death Sabotage – product poisoning Utility Interruption – loss of power, phone Scientific Discoveries – health issues


WHAT IS A DISASTER?

“An unplanned interruption of normal business function or process for an unacceptable period of time”


RATE OF DISASTERS

By what % has the natural disaster rate increased over last 15 years?

40%Copyright Jennifer Elder, CPA October 27, 2008

http://en.wikipedia.org/wiki/Image:Flood102405.JPG

IMPACT ON BUSINESS?

How long can you operate your business without access to critical data before suffering permanent damage?

48 – 72 hrs


IMPACT ON BUSINESS?

According to the IRS what % of businesses never reopen after disaster

35% Copyright Jennifer Elder, CPA

October 27, 2008

IMPACT OF FIRE

What % of businesses close within six months of fire

75% Copyright Jennifer Elder, CPA

October 27, 2008

http://en.wikipedia.org/wiki/Image:FirePhotography.jpg

HOW MANY PLAN ?

2005 Ad Council Survey

92% said planning was important

What % actually had

a plan? 39%


http://en.wikipedia.org/wiki/Image:FirePhotography.jpg

IMPACT OF PLANNING

Every $1 spent on preparednesssaves how many $ of economic loss

$7


RECOVERY TIMING?

When does disaster recovery begin?

Before the disaster!


HOW DOES DISASTER AFFECT A BUSINESS?

Loss of sales/customers Loss of cash flow Loss of vendors/increased

materials cost Decrease in productivity/loss

of employees Damage to reputation


SO WHY DO YOU NEED A PLAN?

likely to happen to you planning will keep you in

business planning will save you money prevents chaos NEW BILLABLE SERVICE!!!


WHAT DO YOU NEED TO CONSIDER?

operations critical to survival communications business records – old & new out of pocket

costs/insurance employees


HOW DO YOU BEGIN?

Create a Disaster Recovery Planning Team

Consider Likely Disasters Create an Emergency Plan Create a Continuity Plan


DISASTER RECOVERY PLANNING TEAM

all departments all levels key suppliers key customers local Gov’t, Red

Cross


http://upload.wikimedia.org/wikipedia/en/4/4f/Conferenceroom2.JPG

CONSIDER LIKELY DISASTERS

Which disasters could affect you?

What would be the extent of the impact (in dollars)?

What is the likelihood of each potential threat occurring (%)?

Rank your threats – R = P% x I$ Address the riskiest firstCopyright Jennifer Elder, CPA October 27, 2008

RANKING DISASTERSby Risk or by Impact???

50% Cyber attack Impact $10k

30% Hurricane Impact $50k

10% Fire Impact $250k


RANKING DISASTERS

Cyber attack P 50% X I$10k = $5k

HurricaneP 30% X I $50k = $15k

Fire P 10% X I $250k = $25k


EMERGENCY RESPONSE PLAN

what to do when disaster strikes or is about to strike

immediate responses to mitigate potential & actual impact

protection – P.D.A. People – Data - Assets


EMERGENCY RESPONSE PLAN

Where will you go? shelter

How will you get there? evacuation

What will you need?emergency supplies

How do you protect your assets?mitigate damage

How will you stay in touch?emergency records/contacts/communication


CONTINUITY PLANPLAN TO STAY IN BUSINESS

Where else can you work from?alternative physical locations

How will you get work done?alternative computer systemshardware/applications/data

Who needs to be back at work?essential personnel, how will they get

back to work What do you need to keep working?

equipment- rent/replace/repairCopyright Jennifer Elder, CPA October 27, 2008

CONTINUITY PLAN

Who will you provide your materials?alternate suppliers

How will you pay your bills?cash flow

How will you keep track of transactions?recordkeeping

How will you pay your staff?payroll

How will you handle the insurance claim?agent or private adjuster


CONTINUITY PLAN

Once you have a plan: test your plan update every 6 months:

responsible employees, contact names & numbers, copies of critical documents

rehearse the plan keep copy of plan off-site & readily

accessible to all


REVIEW

Why plan?Rate of disasters increasingCan take as little as 48 hrs to damage

your business35% businesses fail after disaster75 % fail after fireEvery $1 spent on planning saves $7 in

lossNEW BILLABLE SERVICE!!!!


FINAL ADVICE

Best way to prepare for disasters is to AVOID them in the first place!

Failure to plan is planning to fail!


DISASTER RECOVERY RESOURCES

ready.gov floridadisaster.org fema.gov ibhs.org (Institute for Business & Home Safety)

sba.gov disastersafety.org redcross.org mema.state.md.us (Maryland Emergency Management

Agency)

mdinsurance.state.md.us (Maryland Insurance Administration)

choosemaryland.org (Maryland Dept of Business & Economic Development)









Documents

How To Develop A Company Disaster Plan