Contingency planning - Crisis management and business continuity planning
Looking to the future can never be accurate. Things may be different to that which is expected. To reduce the risk of encountering a serious shock, firms carry out contingency planning. Contingency planning is a set of procedures applied in handling, containment, and resolution of an emergency in planned and coordinated steps. The organisation questions what might happen, identifies alternatives and examine what effects these may have in resolving the problem or minimising its effects. The purpose of contingency planning is to ensure that an organisation can continue with its activities, which is why contingency planning is often referred to a continuity planning.
Contingency planning prepares for:
predictable and quantifiable situations
situations for which there is advanced notice
unexpected and often unwanted events.
Contingency planning uses simulations and computer models asking 'what happens if' questions. Firms may ask some of the following questions:
What happens if:
sales are more or less than planned?
costs are higher or lower than planned?
salaries and wages are greater or lower than expected?
our computer or energy system fails?
there is a flood or a fire?
...and so on, the list may be endless!
The organisation has contingency plans for as many eventualities as it has examined. Surprises will still occur, but the chances of one occurring are reduced.
Firms need to constantly assess and reassess current methods and assumptions. They have to watch closely what is happening within the firm and outside in the market place and general external environment.
Contingency planning - Crisis management and business continuity planning
Looking to the future can never be accurate. Things may be different to that which is expected. To reduce the risk of encountering a serious shock, firms carry out contingency planning. Contingency planning is a set of procedures applied in handling, containment, and resolution of an emergency in planned and coordinated steps. The organisation questions what might happen, identifies alternatives and examine what effects these may have in resolving the problem or minimising its effects. The purpose of contingency planning is to ensure that an organisation can continue with its activities, which is why contingency planning is often referred to a continuity planning.
Contingency planning prepares for:
predictable and quantifiable situations
situations for which there is advanced notice
unexpected and often unwanted events.
Contingency planning uses simulations and computer models asking 'what happens if' questions. Firms may ask some of the following questions:
What happens if:
sales are more or less than planned?
costs are higher or lower than planned?
salaries and wages are greater or lower than expected?
our computer or energy system fails?
there is a flood or a fire?
...and so on, the list may be endless!
The organisation has contingency plans for as many eventualities as it has examined. Surprises will still occur, but the chances of one occurring are reduced.
Firms need to constantly assess and reassess current methods and assumptions. They have to watch closely what is happening within the firm and outside in the market place and general external environment.
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