Analyzing Critical Business Functions

February 16, 2011

For Audio: (1) Listen through PC speakers, OR (2) Dial 314-627-1519 and use access code 311-187-349
Prepare to Survive.

Today’s Speakers: 

Bob Boyd – President, CEO

Agility Recovery

Duane Lohn – Exec. Vice President

Risk Solutions International LLC

For Audio: (1) Listen through PC speakers,

OR (2) Dial 314-627-1519 and use access code 311-187-349
 Agenda
• Risk Management & Critical Applications
Prepare to Survive. • What are Critical Applications?
• First Level Analysis
• Second Level Analysis
• Establish Weighting Factors
• Minimum Staff and Equipment
• Manual Work-Arounds
• Keeping the List Updated
• Summary
• The Agility Approach
• Questions/Comments
Prepare to Survive.

Analyzing Critical Business Functions

Duane Lohn – Exec. Vice President

Risk Solutions International LLC
 What activities or tasks are most
important to your business? 
Prepare to Survive.

Can you effectively identify them?

Your critical functions are those activities that are vital to your
organization’s survival; and while these functions are essential
to your business, they often seem to be the most challenging
to define.  Clearly identified critical business functions play a
pivotal role in a smooth recovery.
Risk Management & Critical Applications

The Role of Recovery in Risk Management

Things that cannot be controlled:
• The Weather
• Effects on Suppliers and Service Providers
• Health and Welfare of Key Employees
• The Spontaneous Actions of Customers
• Demands of regulators, auditors and analysts
Things that can be controlled:
• Familiarity with a response to disruptions
• The extent to which operation is affected
• The duration of the reduced performance
• Customer and public perception

Identifying Critical Applications is key to an orderly and cost effective response

• With unlimited resources, “business as usual” is possible
• With realistic limits (budget, personnel, time), prioritization is necessary
What Are Critical Applications?

• Business Continuity Planning is ongoing

– Coordinated program of strategies, plans and procedures that provide for the
ability to manage and ensure the ready availability of critical resources in the
event of a physical disruption to any part of the business operations.
• Business Continuity Planning is for survival
– Resumption of critical functions following a disruptive event
– Is not a guarantee of “business-as-usual”
– The type, timing and severity of any business disruption is unpredictable.
– Business Continuity Plans are usually based on worst-case scenario
• Critical Applications are the business functions that are essential to meeting
each department’s primary objectives. For example:
– Production: scheduling, fabrication/formulation, assembly, testing, packaging
– Finance: billing, collections, general accounting, purchasing, payroll, payables
– Sales: order entry, pricing, delivery, commitment
– Shipping & Distribution: warehouse operations, route logistics,
– Customer Service: account management, pre-sales, satisfaction, return/rework
• Don’t forget: What is it that makes YOU who you are in the industry?
Why a Formal Business Impact Analysis?

1. Document the impacts on the business that result from

interruptions to the regular operation.
• Using standard techniques, quantify and qualify such
impacts.

2. Inventory time-critical functions, their recovery priorities, and

inter-dependencies.
• Establish and communicate recovery time objectives

3. Prepare manual processes that can be used temporarily to

provide the most essential functions until functionality is
restored
• While maintaining appropriate information integrity and
privacy
First Level Analysis – Planning the process

Obtain a Sponsor
Must command the attention of people who are already very busy
Role of the sponsor is to assure cooperation and to represent CEO or BoD

Divide the Organization into Functional Entities

Start with a Typical Business Organization Chart
Combine or Break-Out Departments as Necessary

Identify Most Effective Data Collection Method

1. Questionnaire – most effective for geographic distances, needs significant
design work to be properly understood and utilized
2. Interviews – highly effective for very independent operations, can be time
consuming
3. Workshops – facilitates idea-sharing and collaboration, presents a scheduling
challenge
What is your Cost of Downtime?

Revenue

Productivity

Damaged Reputation Financial Performance

Know your downtime

costs per hour, day, two
days...
Other Expenses
Business Impact Analysis and Viability

Competition Lost sales

Productivity
Customer service
Canceled orders
Legal/contractual obligations Penalties
Regulatory requirements Insurance issues
Cash flow
Cost to business Interest expense
160
140 Shareholder
120
confidence
100
80
60
40
20 Company
0 viability
Day 1 Day 4 Week 1 Week 2

Lost Sales Order Cancel Penalties Interest

Second Level Analysis – Executing the Plan

For each business unit, identify the Application Function and its major attributes
• Can be a manual function or a computer application

• Identify each function and process by name and where they are conducted
Second Level Analysis – Executing the Plan

Identify the staff that

MUST be available and
actively working for the
function to be
operational.

Specify what standard

equipment must be
available to the active
staff.
Second Level Analysis – Executing the Plan

Estimate the maximum

amount of time your
business can go without
this function.

Determine subjectively
the impact (quantitative
and qualitative) that the
loss of this function has
on the organization.
Second Level Analysis – Executing the Plan

If a computer system is
used, identify it and
estimate the Recovery
Time and Recovery
Point Objectives.

List the records that are

critical in completing
this function. Both
manual and electronic
records should be
listed.
Establish Weighting Factors

Established with Project Sponsor

for all business units
Provide for Executive Control
Minimum Equipment Configuration

For each RTO category

Determine the host computer requirements:

• Operating environment
• Memory
• Processing Speed
• Disk Space
Minimum Staffing Requirements

This is how much space you need to find to house the

essential staff during the interruption. Based on an estimate
of how long the interruption will last.
Manual Work-Arounds

What to do if the computer application is unavailable – BE SPECIFIC

Don’t forget to
have an
accountability
checklist!
Summary

Resources Should be Mapped to the Critical Processes

Resources
Resources

Technology and
Technology and
People Process
Process Process Physical
Physical Plant Process Relationships
Relationships
Processing
Processing

Employees
Employees Electronic data
Electronic data Equipment General public

Contingent work
Contingent workforce
force Electronic applications
Electronic applications Facility External suppliers

Nonphysical infrastructure:
Nonphysical infrastructure:
Functions
Functions Op.systems,
Op. systems, firmware,
firmware, mgt.
mgt. Raw materials Internal suppliers
tools,services,
tools, services, and
andutilities
utilities

Cash and currency (n/a) Investors

Address all dependencies and the skills Inventory Insurers

required to maintain operations, Work in progress

Public and external infrastructure:
mail, transportation, utilities,
telecom, safety, health,

whether a public entity, higher

Vital records Regulators
education provider, manufacturer,
Peripherals and supplies Industry consortiums
service company, or other type of
organization Other tangible assets including
utilities, telecom, health and
safety, transportation
Auditors

Outsourced/third--party
Outsourced/third-party
service providers
service providers
Update Business Impact Analysis Data Frequently

MAJOR
MAJOR
STEPS
STEPS
BUSINESS IMPACT ANALYSIS Data collection worksheets

• Develop BIA questionnaire with senior

management’s recovery objectives
• Interview individuals from all functional
operations areas
• Discuss current operational contingency
plans in detail
ACTIONS
ACTIONS
• Identify interdependencies between
processes, components and demand
locations
• Identify representative products to model
• Investigate alternative suppliers and
processes

DELIVERABLES
DELIVERABLES

1. Detailed map of supply chain(s)

2. BIA questionnaire
3. BIA kickoff presentation
4. Summary of representative products
5. Report describing current operational
status, highlighting area of potential risks
not covered in current operations
contingency plans

Identify areas that represent the most substantial revenue loss

Best Practice: An “IMPACT-based” Approach

Assume the resource is either unavailable for >30 days and/or, worst case, destroyed.
 
Resources Impacted
Prepare to Survive.

The Agility Approach

Bob Boyd – President, CEO

Agility Recovery
DISASTER RECOVERY
Is this what comes to mind?
What is your risk?

There’s no such thing as a minor disruption.

Any event that prevents work from happening
can be catastrophic for a business.

In the past two years Agility responded to

over 560 disaster events. Including:

• Bank’34 – Arson
• CountyWide Insurance – Ice Storm
• Central Bank– Flood
• Montgomery Barnett – Hurricane
• Barnes Dennig CPA – Burst Pipe
• Cowan Insurance – Server Failure
• Mayfield Kentucky – Power outage

Planning gives you the ability to understand

and mitigate your risk, and quickly recovery
from the impact of a crisis.
Regional Events

• Hurricanes
• Floods
• Forest Fires
• Tornados
• Earthquakes
• Ice Storm
Regional Events/Risk

• Proactively reached over 3,500

Members in 2010 during events
• Demonstrated impact of Roadmap
to Recovery discussions
• Reviewed risks, communication
plans, risk assessments, contact
processes and any action items
identified during roadmap.
• Offered advice, guidance and
assurance that Agility is there if
the event should materialize and
impact their operations.
The Reality

Agility responds to non-mega events every day.

Flood
Phone Failed
Outage Server

Mold Ice

Agility Office
Sprinkler
Relo

Fire Protest

Power
Theft Outage
Agility Expertise

With Agility, you don’t need to be all things

to all people.

In the midst of a disaster, it’s nearly impossible to

try to run your business and recover it at the
same time.

The responsibilities are too numerous, the must-

do list too long and the emotional demands too
taxing for one person to handle.

That’s the reason companies turn to Agility. We

take care of everything you need to get your
business back in business, freeing you to focus on
what matters most – your people, your customers
and your community.
Agility People

We work with you as insiders, not outsiders. “There were times Agility
With Agility, you build relationships with a core team committed to
understanding and prioritizing the unique needs of your business. was working while the rest of us slept.
From client services to field operations, they’ll partner with you
That was incredible.”
throughout the entire process, from set-up to recovery.
Christine Forbes, The Daniel and Henry Company
ReadySuite Membership

In exchange for a small monthly fee,

you can have access to all of our
knowledge, expertise and resources.
We’ll help you develop a customized
plan and get prepared for any crisis.

Our Promise: If you have a disaster

we will rescue your business. We
will deliver any or all of our four key
recovery elements:

• Power
• Technology
• Space
• Connectivity
Agility Membership

Membership Lifecycle
Agility provides robust,
easy-to-implement recovery
solutions for an affordable monthly
membership fee.

Membership Features
• Immediate protection
• myAgility Planning Portal
• Alert Notification
• 24-hour access
• Ongoing education programs
• Testing
ReadySuite Recovery Solution

Whatever you need,

whenever you need it.

When disaster hits, Agility will

be there on the scene,
providing you with any, or all,
of the critical elements you
need to keep your business in
business.

ReadySuite: $295/Month
• Immediate protection
• 48-seat office space
• 5 Intel servers
• Power generation
• Phone and Internet connectivity
• Testing Option
• MyAgility Planning Portal
Agility Recovery Process
Agility bridges the gap between disaster and survival.
Too often businesses hit with a crisis close for good because they’re unable to respond quickly and effectively.
That’s not the case for Agility members. The moment the worst happens, we’re on the job assessing, strategizing
and mobilizing our resources to get your operation up and running without delay. Fact is, we’ve dedicated more
than twenty years to helping businesses recover – and we’ve been successful 100% of the time.
Prepare to Survive.
Questions? Comments?
Observations?

Please note: A link to the recorded

version of this webinar will be emailed
to all registrants within 24 hours.

Further Questions? Email us at

info@agilityrecovery.com
 Presenting Experts:

Risk Solutions International LLC Agility Recovery

www.rsi-llc.com www.agilityrecovery.com
646.434.0906 866.364.9696

Prepare to survive.