Business Continuity Planning in E-Commerce: Main Steps for Risk Assessment and Planning
There is always a looming threat of your business going under. This may happen due to many internal and external factors. As a business owner, it is your responsibility to have a plan that will soften the blow and ensure prompt resumption of business once the storm has passed. That plan is referred to as a business continuity plan.
You may be wondering what the primary goal of business continuity planning is. The plan is supposed to act as a safety net and an instruction guide to help dig the business out of the conundrum.
What Is Business Continuity Planning?
The process of figuring out threats and the prevention of said threats and recovery from them is business continuity planning. A well-thought-out plan ensures that personnel and other assets are not lost during an ongoing threat. The functioning of the business should be as close to normal as possible. It also lays out a plan to recover quickly from the threat.
The plan is typically formed by senior board members and stakeholders of a business much before the threat hits. The time taken to get back to where you were in the business before the threat defines continuity.
Potential Threats To A Business
A business continuity plan’s responsibility is to define all potential risks to a business. These range from internal risks like a loss in revenue to externals ones like fire and floods. Here are some possible risks that can affect an e-commerce business.
Disruption in product supply
The product is what propels an e-commerce business. There is no way to guarantee a constant supply of those products. A natural disaster may hit the place you source from, there may be a sudden loss in available workers. This will greatly affect your supply chain and you must be prepared to supplement the lapses.
Shipping service interruption Shipping your products out is what keeps the business going. Shipping services are reliable until a calamity hits. Don’t leave your business vulnerable to this threat. It is always a good idea to have a diversified shipping system.
Natural disasters are one of the worst types of threats as the effect is multifold. Say there is a flood in the city your warehouse is based in. All your products would have gotten ruined. There may even be damage to the warehouse. Your employees’ availability are also brought to a halt because they would have undergone the same calamity. Natural disasters also take the longest to recover from.
As an e-commerce business, your website holds a lot of personal information. You will probably have the contact information of all your customers. You may even be holding banking information. A cybersecurity breach could be disastrous to the reputation of your business. Having a secure server may not be enough if someone is trying to breach those servers.
Unavailability of vendor-provided services
Many businesses rely on SaaS-based products to keep their business running. For example, an order processing system. Though SaaS products are usually reliable, the downfall is that there is no proper or quick alternative to the service. So if your business depends on a SaaS, having a backup is key.
Loss of key personnel
Termination, illness, or resignation causes a devastating blow to businesses. It is hard to have a backup for this kind of resource. And hiring personnel on short notice is also a difficult task.
Incidents like power outages and server crashes contribute to infrastructure lapse. If the fix is a long-duration process, then there is a chance for your business to be badly affected.
Steps To Making A Business Continuity Plan
The following are the most comprehensive business continuity planning stepsfor an e-commerce business to take.
1. Determine The Objectives Of The Plan
Your business continuity plan should expand beyond the main business. It should include other wings of the business too, like public relations and customer service. A well-thought-out plan will minimize the impact of a major disruption and ensure regular functioning.
For an e-commerce business, this will broadly mean ensuring the usual supply and ability to ship them out as per usual. Write out goals that are achievable, don’t try reaching for the stars here.
2. Risk Assessment
The risk assessment process is where you identify possible threats to your business. Mentioned previously are some of the most common risks for an e-commerce business. There are a lot more potential threats as well. Think of every obscure possibility and record it. Even if it may never happen, it’s better to be prepared.
When you’re doing a risk assessment, always prepare for the worst-case scenario. Write down how that risk will impact your business. Bounce ideas off on your team to figure out how best to overcome that challenge and maintain continuity.
3. Identify Ecommerce Business Functions
The BCP’s task is to ensure various wings of the business are maintained. You need to identify what the essential branches of your business are before you can proceed. Here are some essential departments for an e-commerce business.
- Supply and Inventory: What will you do if the product is cut off at the source? How will you manage to upkeep the inventory? Think about these questions when drawing the plan.
- Packing and Shipping: This department is mainly a man-power-led one. So what will you do if there is a personnel shortage? How will you ensure shipping can happen if your provider is unable to do it?
- Website Maintenance: Your website or app will be the main propeller of your business. What if the server crashes? How will you ensure your customers can keep ordering from you?
4. Planning For Essential Services
The departments mentioned previously ensure that an e-commerce business runs. This makes each as important as the other. The best business solution is to form a plan for all the departments. Since the different departments are interlinked, you can generalize that an emergency with one will imply an emergency with the others. So plan how you will stop the domino effect.
It is a good idea to always communicate with your customers about what is going on. So in your business plan, remember to include a PR plan as well.
5. Establish A Response Team
Telling people where to go doesn’t work when the building is already crashing around you. Right when you form the BCP, also establish a team that will help you with the crash. Assign responsibilities and ensure they are clearly understood.
Have a team of people you trust and can hold their own when you are stressed out of your mind. This is probably what will happen.
6. Test Your Plan
Don’t wait till the threat is upon you to check if your BCP works. Put various aspects of your plan into action to check if it really works. You can also test if the response team you’ve established is living up to their responsibilities, or if they need to be subbed.
The business owner’s response when a calamity is upon them definitely determines the success of the business. Having a well-thought-out BCP is mandatory. The steps mentioned above will help you draft a plan most efficiently.