The Importance of Business Continuity Planning

A Story of a Thriving Software Development Firm

There once was a thriving software development firm with 150 employees and strong corporate clients. A new CTO joined in 2018, and due to her wealth of experience, identified an urgent need for a comprehensive business continuity plan. Recognizing the risk, she crafted a detailed proposal and brought it before the senior management team.

The CEO's response? "We're a software company. We're in the cloud. What could possibly happen that would shut us down?"

The VP of Operations agreed. "We've been fine for eight years. That budget could go toward another developer or marketing campaign, things that actually generate revenue."

The CTO pushed back with statistics that showed a lack of backups in multiple locations, documented recovery procedures, and alternative communication systems.

The CEO was unmoved. "You're being paranoid. We have backups. Our hosting provider has been with use for years and handles that. Besides, if something happened, we'd figure it out. We're smart people."

Then came the ransomware attack.

On a Tuesday morning in June 2019, employees arrived to find their systems locked. A ransom demand, for R 950,000 in cryptocurrency within 72 hours. The attack had quietly spread for three days, encrypting backup systems before deploying the visible demand. The cloud backups they relied on, encrypted too.

What followed was chaos. No incident response plan meant hours wasted debating next steps. No documented systems list meant IT staff scrambled to determine what could be recovered. No crisis communication plan meant clients learned about the attack through rumours instead of official channels.

Recovery took eleven weeks. Three major clients terminated contracts during the outage. Several more left afterward, citing security concerns. The company spent R 380,000 on emergency consultants, faced regulatory fines, and settled two client lawsuits.

Total cost: R 4.2 million in direct costs and lost revenue. The business continuity plan the COO had proposed eighteen months earlier would have cost less than R 175,000 to develop and implement.

Business Resistance

Why Companies Resist Planning

Several factors contribute to this dangerous mindset:

1. Optimism Bias: Leaders often believe they're less likely to experience disasters than others. Every failed business once believed they were special.

   
   

2. Recency Bias: Without recent examples, threats feel abstract and distant.

   
   

3. Opportunity Cost Thinking: Continuity planning is framed as money that could fuel growth instead. This ignores that disaster costs almost always dwarf preventive investment.

   
   

4. Overconfidence in Intelligence: Many leaders believe intelligence and adaptability are sufficient. They think they'll "figure it out" when disaster strikes. But chaos, stress, and time pressure make clear thinking nearly impossible. The time to plan is before the crisis, not during it.

   
   

The Reality of Business Disasters

Studies show that 40% of businesses experiencing a major disaster without adequate planning never reopen. Another 25% fail within a year. Recovery time is everything. Companies that resume operations quickly maintain customer confidence and minimize losses. Those that cannot often never recover, regardless of previous success.

What You Need for Effective Planning

An effective business continuity plan includes:

• Risk Assessment: Identify threats specific to your business.

• Recovery Strategies: Develop plans for different disaster scenarios.

• Clear Responsibilities: Assign specific roles to team members.

• Crisis Communication Protocols: Establish how to communicate during a crisis.

• Data Backups: Ensure backups are in multiple geographic locations with regular testing.

• Documentation: Keep records of critical processes and contacts.

• Conducting Tests: Conducting regular business continuity tests to confirming that the plan works

  
  

Plans must be tested regularly. Tabletop exercises reveal gaps before they become critical failures.

Don't Wait for a Crisis

If your organization lacks a business continuity plan, the most dangerous thing you can do is assume you don't need one.

Begin by identifying your most critical business functions. Assess what would happen if they became unavailable for a day, a week, or a month. Don't forget to include third-party vendors, suppliers, and service providers in your plan. Their failures can disrupt your operations just as severely as your own. Even basic measures like cloud backups in multiple locations, documented processes, alternative supplier contacts, and an emergency communication tree provide significantly more protection than nothing.

Business continuity planning isn't paranoia or wasteful overhead. It's a fundamental responsibility of leadership, as essential as financial planning or legal compliance. Don't let pride or optimism bias turn your success story into a cautionary tale. The question isn't whether you can afford to invest in business continuity planning. It's whether you can afford not to.

The companies and scenarios are provided as examples to support learning. The insights and statistics are grounded in real-world business continuity challenges faced by organizations across industries.

Remember, the phrase "business continuity planning" is not just a buzzword; it’s a necessity for sustainable growth and resilience.