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September 15, 2017

Disaster Recovery 101 (article)

CBIZ assists with disaster recovery and business continuity planning.Natural disasters, like hurricanes Harvey and Irma cause technical disruptions, facility outages, and staffing shortages that can paralyze a business. In the aftermath of these disruptive incidents, business leaders will be tasked with minimizing the impact on customers, employees, and business operations. Unfortunately, only about 30 percent of businesses have a written disaster recovery plan. Those without a formal plan may struggle to identify where to start rebuilding after a disaster occurs. Following these initial steps can help you return your business to normal operations.

Step 1: Communicate

Arguably, the most important first step to recovery will be to communicate current information and the best sources for updates with your employees and key stakeholders. Obtain a working phone line or a location that has internet access and begin the process of reconnecting core members of your management team. Management should establish what will serve as the best point of contact for inbound communications from employees, clients, and vendors. They should also set the direction for how important updates and next steps will be communicated back out to employees and stakeholders. Consider using multiple channels to send out information. Establishing a phone tree can be helpful in breaking up the responsibility of contacting employees directly, especially for organizations with large staff headcounts. Using social media channels like Facebook and Twitter can also be helpful at communicating quick, real-time alerts and updates.

Step 2: Assess the Damage

If you are recovering from a natural disaster, it is likely that your facility was physically damaged in some way during the incident. It will be important to assess your facility’s condition to determine the extent of damage and next steps that will be required. Partnering with your insurance provider will be the best way to file a complex claim and achieve a successful outcome. Contact your agent so that they can dispatch an adjuster to your location who will report an estimate of losses back to your insurance provider. If damages are covered by your policy, you may receive an immediate initial partial payment for any losses that have occurred. Be prepared to provide the adjuster with the most accurate information possible. Do not attempt to provide estimates or make assumptions.

Step 3: Identify Alternative Operating Methods

Depending on the extent of the losses your organization experiences, it is not uncommon for insurance claims to take nine to 12 months to reach a final settlement. This may mean experiencing a loss of facilities until you have the money to cover expenditures and repairs. Work with your management team to identify a strategy for continuing operations without disruption to your employees or customers. This might include allowing your employees to continue their work from home or identifying a temporary alternative location for your staff, such as another branch location, client facility or a community collaborative workspace. As progress is made in repairing and returning your facility back to normal operations, you can use the established communication channels to keep employees and stakeholders current on new information.

Step 4: Let Your Customers Know What to Expect

Chances are if your customers are located in the same geographic area, they are experiencing similar setbacks from the incident. While they will likely understand any temporary break in communication or service, customers will still be concerned with how disruptions to your operations will affect their own business. Depending on your industry, you may also be responsible for alerting regulators that you are still within compliance or that your activities are being conducted safely in the wake of a disaster. Once you have assessed the damage to your organization and identified alternative operating methods, it will be important to work with management to craft an external message that can be communicated to your customers and regulators. This message should include any known information that directly affects these individuals or governing bodies as well as the expected timeline to return your business to normal operations. Make sure that your communications are clear, concise and consist of only known facts. It can be tempting to make promises to pacify unsettled customers, but the best strategy is to be honest. You can always provide updates to customers as more information becomes available over time.

Step 5: Create an Actionable Plan for the Future

It is impossible to predict exactly how or when disaster will strike, but having a written business continuity and disaster recovery plan in place can help minimize disruption to your business in the future. Writing a plan that includes recovery steps for every possible scenario will most likely result in a complex document that isn’t practical when employees need to act quickly. The key to a strong plan is not to over-complicate the context. Your strategy should account for places, people, procedures and communications, and it should be flexible enough to work in multiple situations. Regardless of what causes the disruption, it’s important that management is aligned with the recovery strategies of the plan.

For More Information

For more information on how you can improve your disaster recovery plan, please contact us.

Related Reading

  • Prepare for Anything: How to Build an Actionable Incident Response and Recovery Strategy
  • Why Your Company Needs a Business Continuity Plan
  • Complex Insurance Claims- Understand and Work the Process

  • Copyright © 2017, CBIZ, Inc. All rights reserved. Contents of this publication may not be reproduced without the express written consent of CBIZ. This publication is distributed with the understanding that CBIZ is not rendering legal, accounting or other professional advice. The reader is advised to contact a tax professional prior to taking any action based upon this information. CBIZ assumes no liability whatsoever in connection with the use of this information and assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

    CBIZ MHM is the brand name for CBIZ MHM, LLC, a national professional services company providing tax, financial advisory and consulting services to individuals, tax-exempt organizations and a wide range of publicly-traded and privately-held companies. CBIZ MHM, LLC is a fully owned subsidiary of CBIZ, Inc. (NYSE: CBZ).

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