What would happen if you had a fire, explosion or flood, or if a failure in IT, utility or essential plant curtailed normal operations?

Most chief executives have asked themselves the same question, but pressure of running the business prevents them from preparing for such an eventuality.

In 1999 DTI figures showed that 69% of businesses that do not resume operations within two weeks of a disaster are out of business within two years. Clearly if you can’t supply the linen or workwear, someone else will quickly step in to do so. Recognising the major threat that this scenario represents to a business, many major insurers are requesting that their clients produce a plan for recovery in the event of a disaster.

Misguided plan

Many of the companies that fail, following a disaster, genuinely believed that they had a recovery plan. Managers would studiously keep it in their briefcases ready for use.

In the event it simply turned out to be a list of staff and suppliers. Little, if any, thought had been given to the actual logistics involved in restarting their operations.

I try to avoid the term disaster recovery because the real objective of the plan is to keep the business running after a disaster occurs, while helping it to resume normal operations as quickly and intelligently as possible.

The plan should not be an inventory of existing systems, nor a guidebook for duplicating them. It should be an action plan for providing key corporate functions with the capabilities they need, when they need them. Where there is only one main production facility, there may be a need to reach a reciprocal agreement with another laundry. Where capacity is stretched, the plan would cover ways of coping such as staff working at night in their plant.

Approaching a potential competitor is not easy, but having acted as middle man on a number of occasions, I have been pleased by the interest and co-operation achieved. Properly brokered, the benefits of mutual self help will frequently overcome initial concerns.

Gauging the impact

The starting point is to study every facet of the operation to determine the scope of the plan. It is crucial to identify the functions that need to achieve the quickest recovery. From this information you can define the objectives of your business resumption plan.

I find that analysing the relationships between the various operations and services is a good way to determine the scope of a client’s systems and capabilities.

This is followed by interviewing knowledgeable people from all the functional departments to determine the specific weaknesses of your business and establishing the recovery strategies.

When considering the type of disaster that can affect businesses some companies fall into the trap of thinking only about a major incident, such as a fire.

However, numerous other situations represent a serious threat to your operation. For example:

• an ironer or tunnel washer out of action for a week

• long-term disruption of energy supply

• subsidence in the building, or a flood or explosion

All these would cause major disruption. Other essential elements such as communications, IT, transport and even personnel are all open to various forms of disablement that would seriously inhibit your ability to maintain normal services.

Clearly disasters can have different degrees of impact. A fire might affect only part of the building, or a disaster might result in partial loss of accounts data, or the business could suffer from progressive plant failure.You should seek to prepare graduated recovery strategies to cater for these variables.

Prevention not cure

In preparing the plan you must remain alert for simple improvements that can be made to lessen the likelihood of a disaster happening in the first place.

For instance, if you are located in a flood risk area, could any planned rewiring be located above the likely water level? Would a couple of fire resistant doors hold back a fire until the emergency services arrive? Your local fire authority will almost certainly have a department offering advice on fire prevention and limiting spread.

To what extent do existing data back up systems really work? Ask the finance department to pretend that all their computers and disks stored on site have been burnt. How long they would need to get such functions as management accounts, invoicing, VAT returns, payroll, asset ledger and so on, up and running again? Could they ever fully recover vital comparative data? What protection do you have from from fraud, virus, hacking, unauthorised access, data/system corruption, hardware failure or break-in/theft? Have you identified the critical production spare parts that would stop your laundry operating? Do you have them. If not are they readily available? Would you have to wait for weeks? If machinery is very old is the supplier still trading?

Cost justification

An important aspect of the project is to arrive at a cost justification and you do this by calculating a daily loss for each category of functions (see charts). These are grouped according to their time dependence. Using a bar chart, you can graphically illustrate the sales and other daily losses incurred through the absence of that function. You should also produce a cumulative loss summary in which corporate losses contributed by each function are graphed against time since the disaster. This chart clearly illustrates the total losses over time and is often a sobering experience. Taken together, these two charts are used to make a reasoned decision on the number of functions to be protected and over what time period to implement the protections.

Implementing the plan

Once the needs have been established, the strategies developed and the funding allocated, it is time to set out the formal procedures. These are best divided into action plans and information sheets.

Action plans should clearly document specific actions to perform. Information sheets should provide the data necessary for performing them.

Obviously your staff will be disoriented by the disaster and will need rapid, straightforward instructions on how to proceed. Indeed some companies have lost key employees in the aftermath through poor management of the crisis.

Good procedures are easy to use, with charts illustrating the steps and easy to follow instructions. Information sheets provide the background data needed by the various disaster recovery personnel such as contacts, phone trees, and location of the business resumption centre. In the interests of simplicity, you will need to decide to what extent the plan should be modular. Should the members of the various sections each have the whole plan, or is it preferable to give the relevant section to a team leader.

Typically the managing, operations and technical directors will need the full overview of the whole plan. Albeit operations and technical will be concentrating on the production, transport and engineering elements. Sales and marketing will need to address customer contact, business retention and new business. Finance must rebuild sales and purchase ledgers, payroll and accounts.

Finding the answers to the questions I have posed, introducing preventative measures and putting a user-friendly business resumption plan in place could be one of the most valuable exercises you ever undertake.