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The Six Step COVID-19 Business Continuity Plan

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2108 VIEWS

Tuesday, April 07, 2020 / 03:25 PM / by NECA / Header Image Credit: NECA

This Tool is designed to support your enterprises during the COVID-19 crisis. Chiefly that means by designing a bespoke "Business Continuity Plan" (BCP) for your business. The tool will enable you to:

1. Assess the level of risk and vulnerability of your business; and

2. Develop an effective risk and contingency system for the business.

This tool aims to establish the risk profile of your enterprises and the level of vulnerability to COVID-19 in terms of its impact on your People, Processes, Profits and Partnerships (the "4Ps").

People: lives of workers and family members
Processes: enterprise operations
Profits: revenue generation
Partnerships: enabling environment to carry out business operations

The tool is mostly targeted at smaller enterprises with limited resources and structured in two parts.

1. The first part is a risk assessment that you can quickly do. It establishes the level of risk/vulnerability to your enterprises.

2. The second part of the tool is a six-step process - using an illustrative example of a fictitious SME - to assist you develop your own Business Continuity Plan.

Part 1: Establish your risk profile - Self-assessment

Indicate your answers to the yes/no questions below with an X. There are four sections composed of a total of 61 questions structured around the "4Ps" â€žPeople, Processes, Profits and Partnershipsâ€Ÿ. You can estimate your vulnerability level by adding up the number of times your answer was "yes" in each questionnaire.

Answer YES if you are not sure or don't know.

I People: Risk Matrix

II. Processes: Risk Matrix

III. Profits: Risk Matrix

Proshare Nigeria Pvt. Ltd.

IV. Partnerships: Risk Matrix

Proshare Nigeria Pvt. Ltd.

From this exercise, you will have identified which of the 4P's (people, processes, profits and partnerships) your enterprise is most vulnerable too (and which aspects or variables in particular). To calculate your total vulnerability, add up the times you answered "yes" in the four vulnerability self-assessments. Insert this sum in the cell below.

Risk score

Interpretation of your score: your risk profile

This score does not rate whether your enterprise is good or bad. It is simply a benchmark of your enterprise and its vulnerability to COVID-19 that helps in the identification of areas where your enterprisesâ€Ÿ overall resilience to the COVID-19 crisis could improve. Most importantly it will tell you where you are most at risk â€“ your workers, your supply chains, your reliance on third parties.

40-61

Your enterprise is highly vulnerable to the negative impacts of the COVID-19 crisis. Your enterprise is quite likely to be severely impacted, which may cause long-term disruption in the event of a deterioration of the situation. Your next plan of action should be to identify whether you are most vulnerable to internal or external threats and take measures to reduce risk and vulnerability to COVID-19.

20-40

Despite having taken some action to increase preparedness, your enterprise remains vulnerable. Understand whether your threats are internal or external and make sure to prioritize your elements of vulnerability when establishing your business continuity plan.

0-20	You are on the right path towards becoming more resilient, but there are still some areas where you could reduce your vulnerability. Make sure to establish your business continuity plan in a way to manage risk of your internal and external threats.

Part 2: Develop a six-step COVID-19 Business Continuity Plan

The following are the six steps needed to establish your business continuity plan (BCP):

Step 1: Identify your key products or services

What are your most important products or services? Consider the following criteria:

Share of income they generate;
Amount of clients demanding them; and
Cost of non-delivery: negative financial, productivity and reputational consequences.

Step 2: Establish the objective of your BCP

What do you want to achieve by establishing your BCP?

Step 3: Evaluate the potential impact of disruptions to your enterprise and workers

How long can interruptions last before becoming unacceptable? What are the resources required and the suppliers, partners and contractors needed to conduct key operations?

Step 4: List action to protect your business

Use the 4Ps framework to do this. Actions to minimize risk to your: People, Processes, Profits and Partnerships (the "4Ps").

People: lives of workers and family members
Processes: enterprise operations
Profits: revenue generation
Partnerships: enabling environment to carry out business operations

Step 5: Establish contact lists

More of your activity will be non-physical (WhatsApp calls, zoom meetings etc). Make sure you have accurate and update lists of all your key stakeholders.

Step 6: Maintain, review and continuously update your BCP

The following is an example of how a small business owner put together a BCP for her business

How a small business owner developed a BCP to mitigate the impact of COVID-19

Caro Corona is the owner of company producing canned sardines in Lagos, Nigeria. She sells her products directly throughout Nigeria and to larger firms who export. Caro relies on consistent orders from three companies for about 80 per cent of her business. These companies due to their connections to the export market send regular orders. As COVID-19 cases spread in Nigeria, Caro developed a BCP to protect her business. She has a total of 60 workers.1

Caro completed the COVID-19 Risk Assessment test and realized her risk profile was high. She dealt with multiple suppliers on a daily basis. Her workers worked in close proximity. She was reliant on the port staying open for much of her sales. The rest of her sales mostly went to other Nigerian cities and she needed reliable transport links. Caro realized she needed a BCP.

Step 1: Caro identified her key products

For Caro, her main products are different types of canned sardines. Sales of these products are the sole means of revenue generated. Her client base is relatively small. She has three main customers who constitute 80 per cent of sales. The cost of non-delivery to these customers would have very negative consequences on her business.

Step 2: Caro established the objective of her BCP

The goal was to develop simple internal processes for her business that would provide key protections for the "4Ps": people, processes, profits and partnerships. This meant:

Maximize the physical and emotional safety of herself and her workers;
Resume operations as quickly as possible following disruptions;
Make sure that her key products are resilient to disruptions associated with COVID-19;
Safeguard her supply chain; and
Ensure that her enterprise fulfils its contractual commitments with clients.

Step 3: She evaluated the potential impact of disruptions to her enterprise and workers

She assessed the impact of disruptions to her key operations. What operations are required to produce and deliver her products and what is her tolerated downtime: how long can key operations be out of action before it becomes highly damaging to the viability of the business. She identified what operations were required to produce and deliver her products and where the risks where located? This involved a short stakeholder mapping exercise. There are five main stakeholders that are critical to her business: Workers, customers, suppliers, support services and regulatory authorities.

Workers: Caro has sixty workers that are drawn from the local community (fortunately they mostly live locally and walk to work).
Customers: 80 per cent of her product is to three companies who export to foreign markets. The remaining 20 per cent is for the Nigerian market (15 per cent to wholesalers based in Abuja).
Suppliers: She is dependent on three suppliers. First a metal (tin) producer; second a printing company based in Abeokuta for the labels for her products; and third and most important local fishers who are grouped in cooperatives. All suppliers require regular communication, but physical contact is most regular with the fishers.
Support Services: These include a trucking company that she uses and a security company.
Public utility and regulatory authorities: These include the regulatory Food Standards body that issues licenses; the taxation authority and a local government departments that oversee health and safety standards.

This exercise showed Caro how dependent her businesses is on external actors remaining healthy and in the case of her suppliers, support services and customers, able to stay in business. She quickly realized that she could potentially go bankrupt within four to six weeks if she was badly disrupted. She assessed "what would be the impact of not conducting her key operations?" She looked at each of the stakeholders above and realized that any disruption to them would mean a disruption to her business.

She assessed her main potential disruptions as follows:

Workers falling sick (hers/suppliers/support services);
Government restrictions on freedom of movement could affect her (and her suppliers) ability to get to work;
Government restrictions on accessing the port could affect her customersâ€Ÿ ability to get her products to market;
Inability of government utilities to provide services (water and electricity were of chief concern); and
Drop in demand for her products.

She thought about the events that were outside her control and how they could impact her suppliers and what were within her control that she controls to some extent. On the negative side, she was highly dependent on others, chiefly her suppliers and she has no influence over government restrictions that may come. On the positive, the demand for tinned/canned products was rising.

Step 4: Caro took actions to protect her operations

People

She decided to limit the contacts points to a single one in her business and set up a sanitation point there so she and her workers were less exposed.
Apart from safety/sanitation measures she reviewed the standard ways of working and adapted social distance criteria. This would require new shift arrangements which she discussed with the workers.
She prepared for increased absenteeism.

Processes

While leading the overall initiative, she asked workers to volunteer for the following tasks: ensuring sanitation points were well stocked daily; establishing a temperature checking station at entrance for all workers/suppliers/customers/visitors; daily consultation with suppliers and customers to assess their situation and any changes that have occurred; and making sure everybody was familiar with ways to stay safe at home.
She discussed with all customers and suppliers what their safety systems where and that they were adhering to the new regulations.
She still paid some suppliers (fishers for example) in cash. She used this as an opportunity to move all payments (ongoing or incoming) into a digital format.
She backed up all of her data regularly or automatically and kept it additionally at home in case she had to self-isolate.

Profits

She noticed that demand for tinned/canned products was rising. There was an opportunity here for increased sales. She negotiated an agreement with a local five-star hotel, for cold storage space for key inventory and secondary secure space for final products. Her final products had a longer shelf life which was a real advantage.
She discussed with her main suppliers the fishers Cooperative who told her they had agreements with other cooperatives along the coast. If the Lagos region was badly disrupted, alternatives sources were available and agreements were in place to enable this.
She worked out her daily operational costs (payroll, rent, supplies, etc.) and made simulations based on the financial needs if key disruptions occurred.
She had regular conversations with the bank that had provided her with credit. The bank was aware of her "BCP plan" and was proving more flexible with loan requirements as a result, if these were needed.

Partnerships

She discussed with her three main (exporting) clients. She suggested that they ask the Nigeria Employersâ€Ÿ Consultative Association (NECA) and other business associations to have discussions with the government to get some clarity that the port facilities can stay open.
She struck an agreement with four other SME owners to share safety measures and practices for each of their businesses. They agreed to a common set of procedures to keep workers safe. They also agreed to share the cost of getting information on how to handle workplace issues like changes to working time, possible redundancies; and other HR issues.
She discussed with the taxation authorities the possibility of tax deferrals which she had heard about in the media. She leveraged on NECA to get more concession.

Step 5: Caro established contact lists

She listed key contact numbers of authorities and third parties (police, emergency services, firefighters, nearest hospitals, insurance company) that could provide help during emergencies.
She made a list of her workers, their positions and contact details (mobile phone and email address) as well as workerâ€Ÿs emergency contact details.
She made a list of her clients, suppliers, contractors and government agencies she worked with, including the contact person and details (mobile phone, email address and street address), all of which allows her to communicate.
She selected communication methods to connect with her workers during the COVID-19 crisis (Facebook, WhatsApp, Google forms) and established a staff emergency call tree.

Step 6: Caro maintained, reviewed and continuously updated her BCP

She reviewed and updated her plan every week to:

Update the objective of her BCP and to improve its effectiveness;
Update her risk assessment, strategies for business continuity and other procedures contained in the BCP; and
Ensure continual improvement of all the processes included in her BCP.

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