Business continuity and disaster recovery plans are risk management strategies that businesses rely on to prepare for unexpected incidents. While the terms are closely related, there are some key differences worth considering when choosing which is right for you:

• Business continuity plan (BCP): A BCP is a detailed plan that outlines the steps an organization will take to return to normal business functions in the event of a disaster. Where other types of plans might focus on one specific aspect of recovery and interruption prevention (such as a natural disaster or cyberattack), BCPs take a broad approach and aim to ensure an organization can face as broad a range of threats as possible.
• Disaster recovery plan (DRP): More detailed in nature than BCPs, disaster recovery plans consist of contingency plans for how enterprises will specifically protect their IT systems and critical data during an interruption. Alongside BCPs, DR plans help businesses protect data and IT systems from many different disaster scenarios, such as massive outages, natural disasters, ransomware and malware attacks, and many others.
• Business continuity and disaster recovery (BCDR): Business continuity and disaster recovery (BCDR) can be approached together or separately depending on business needs. Recently, more and more businesses are moving towards practicing the two disciplines together, asking executives to collaborate on BC and DR practices rather than work in isolation. This has led to combining the two terms into one, BCDR, but the essential meaning of the two practices remains unchanged.

Regardless of how you choose to approach the development of BCDR at your organization, it’s worth noting how quickly the field is growing worldwide. As the results of bad BCDR like data loss and downtime become more and more expensive, many enterprises are adding to their existing investments. Last year, companies worldwide were poised to spend USD 219 billion on cybersecurity and solutions, a 12% increase from the year before according to a recent report by the International Data Corporation (IDC) (link resides outside ibm.com).

Why are business continuity and disaster recovery plans important?

Business continuity plans (BCPs) and disaster recovery plans (DRPs) help organizations prepare for a broad range of unplanned incidents. When deployed effectively, a good DR plan can help stakeholders better understand the risks to regular business functions that a particular threat may pose. Enterprises that don’t invest in business continuity disaster recovery (BCDR) are more likely to experience data loss, downtime, financial penalties and reputational damage due to unplanned incidents.

Here are some of the benefits that businesses who invest in business continuity and disaster recovery plans can expect:

• Shortened downtime: When a disaster shuts down normal business operations, it can cost enterprises hundreds of millions of dollars to get back up and running again. High-profile cyberattacks are particularly damaging, frequently attracting unwanted attention and causing investors and customers to flee to competitors who advertise shorter downtimes. Implementing a strong BCDR plan can shorten your recovery timeframe regardless of the kind of disaster you face.
• Lower financial risk: According to IBM’s recent Cost of Data Breach Report, the average cost of a data breach was USD 4.45 million in 2023—a 15% increase since 2020. Enterprises with strong business continuity plans have shown they can reduce those costs significantly by shortening downtimes and increasing customer and investor confidence.
• Reduced penalties: Data breaches can result in large penalties when private customer information is leaked. Businesses that operate in the healthcare and personal finance space are at a higher risk because of the sensitivity of the data they handle. Having a strong business continuity strategy in place is imperative for businesses that operate in these sectors, helping keep the risk of heavy financial penalties relatively low.

How to build a business continuity disaster recovery plan

Business continuity disaster recovery (BCDR) planning is most effective when businesses take a separate but coordinated approach. While business continuity plans (BCPs) and disaster recovery plans (DRPs) are similar, there are important differences that make developing them separately advantageous:

• Strong BCPs focus on tactics for keeping normal operations running before, during and immediately following a disaster. 
• DRPs tend to be more reactive, outlining ways to respond an incident and get everything back up and running smoothly.

Before we dive into how you can build effective BCPs and DRPs, let’s look at a couple of terms that are relevant to both:

• Recovery time objective (RTO): RTO refers to the amount of time it takes to restore business processes after an unplanned incident. Establishing a reasonable RTO is one of the first things businesses need to do when they’re creating either a BCP or DRP. 
• Recovery point objective (RPO): Your business’ recovery point objective (RPO) is the amount of data it can afford to lose in a disaster and still recover. Since data protection is a core capability of many modern enterprises, some constantly copy data to a remote data center to ensure continuity in case of a massive breach. Others set a tolerable RPO of a few minutes (or even hours) for business data to be recovered from a backup system and know they will be able to recover from whatever was lost during that time.

How to build a business continuity plan (BCP) 

While each business will have slightly different requirements when it comes to planning for business continuity, there are four widely used steps that yield strong results regardless of size or industry.

1. Run a business impact analysis 

Business impact analysis (BIA) helps organizations better understand the various threats they face. Strong BIA includes creating robust descriptions of all potential threats and any vulnerabilities they might expose. Also, the BIA estimates the likelihood of each event so the organization can prioritize them accordingly.

2. Create potential responses

For each threat you identify in your BIA, you’ll need to develop a response for your business. Different threats require different strategies, so for each disaster you might face it’s good to create a detailed plan for how you could potentially recover.

3. Assign roles and responsibilities

The next step is to figure out what’s required of everyone on your disaster recovery team in the event of a disaster. This step must document expectations and consider how individuals will communicate during an unplanned incident. Remember, many threats shut down key communication capabilities like cellular and Wi-Fi networks, so it’s wise to have communication fallback procedures you can rely on.

4. Rehearse and revise your plan

For each threat you’ve prepared for, you’ll need to constantly practice and refine BCDR plans until they are operating smoothly. Rehearse as realistic a scenario as you can without putting anyone at actual risk so team members can build confidence and discover how they are likely to perform in the event of an interruption to business continuity.

How to build a disaster recovery plan (DRP)

Like BCPs, DRPs identify key roles and responsibilities and must be constantly tested and refined to be effective. Here is a widely used four-step process for creating DRPs.

1. Run a business impact analysis

Like your BCP, your DRP begins with a careful assessment of each threat your company could face and what its implications could be. Consider the damage each potential threat could cause and the likelihood of it interrupting your daily business operations. Additional considerations could include loss of revenue, downtime, cost of reputational repair (public relations) and loss of customers and investors due to bad press.

2. Inventory your assets

Effective DRPs require you to know exactly what your enterprise owns. Regularly perform these inventories so you can easily identify hardware, software, IT infrastructure and anything else your organization relies on for critical business functions. You can use the following labels to categorize each asset and prioritize its protection—critical, important and unimportant.

• Critical: Label assets critical if you depend on them for your normal business operations.
• Important: Give this label to anything you use at least once a day and, if disrupted, would impact your critical operations (but not shut them down entirely).
• Unimportant: These are the assets your business owns but uses infrequently enough to make them unessential for normal operations.

3. Assign roles and responsibilities

Like in your BCP, you’ll need to describe responsibilities and ensure your team members have what they need to perform them. Here are some widely used roles and responsibilities to consider:

• Incident reporter: Someone who maintains contact information for relevant parties and communicates with business leaders and stakeholders when disruptive events occur.
• DRP supervisor: Someone who ensures team members perform the tasks they’ve been assigned during an incident. 
• Asset manager: Someone whose job it is to secure and protect critical assets when a disaster strikes. 

4. Rehearse your plan

Just like with your BCP, you’ll need to constantly practice and update your DRP for it to be effective. Practice regularly and update your documents according to any meaningful changes that need to be made. For example, if your company acquires a new asset after your DRP has been formed, you’ll need to incorporate it into your plan going forward or it won’t be protected when disaster strikes.

Examples of strong business continuity and disaster recovery plans

Whether you need a business continuity plan (BCP), a disaster recovery plan (DRP), or both working together or separately, it can help to look at how other businesses have put plans in place to boost their preparedness. Here are a few examples of plans that have helped businesses with both BC and DR preparation.

• Crisis management plan: A good crisis management plan could be part of either business continuity or disaster recovery planning. Crisis management plans are detailed documents that outline how you’ll manage a specific threat. They provide detailed instructions on how an organization will respond to a specific kind of crisis, such as a power outage, cybercrime or natural disaster; specifically, how they’ll deal with the hour-by-hour and minute-by-minute pressures while the event is unfolding. Many of the steps, roles and responsibilities required in business continuity and disaster recovery planning are relevant to good crisis management plans.
• Communications plan: Communications plans (or comms plans) equally apply to business continuity and disaster recovery efforts. They outline how your organization will specifically address PR concerns during an unplanned incident. To build a good comms plan, business leaders typically coordinate with communications specialists to formulate their communications plans. Some have specific plans in place for disasters that are deemed both likely and severe, so they know exactly how they’ll respond.
• Network recovery plan: Network recovery plans help organizations recover interruptions of network services, including internet access, cellular data, local area networks (LANs) and wide area networks (WANs). Network recovery plans are typically broad in scope since they focus on a basic and essential need—communication—and should be considered more on the side of business continuity than disaster recovery. Given the importance of many networked services to business operations, network recovery plans focus on the steps needed to restore services quickly and effectively after an interruption.
• Data center recovery plan: A data center recovery plan is more likely to be included in a BCP than a DRP because of its focus on data security and threats to IT infrastructure. Some common threats to data backup include overstretched personnel, cyberattacks, power outages and difficulty following compliance requirements. 
• Virtualized recovery plan: Like a data center plan, a virtualized recovery plan is more likely to be part of a BCP than a DRP because of a BCP’s focus on IT and data resources. Virtualized recovery plans rely on virtual machine (VM) instances that can swing into operation within a couple of minutes of an interruption. Virtual machines are representations/emulations of physical computers that provide critical application recovery through high availability (HA), or the ability of a system to operate continuously without failing.

Business continuity and disaster recovery solutions 

Even a minor interruption can put your business at risk. IBM has a wide range of contingency plans and disaster recovery solutions to help prepare your business to face a variety of threats including cloud backup and disaster recovery capabilities and security and resiliency services.