Are you ready for the next disruption?
No one could’ve predicted the impact of the COVID-19 pandemic. Its global outbreak in 2020 showed business leaders the importance of being prepared for any scenario.
But health crises aren’t the only things to watch out for, as the business landscape is changing fast. With many people working remotely, financial experts see the risk of a global recession looming as artificial intelligence (AI) is set to antiquate thousands of jobs in the coming years.
So, what can you do?
Now is the ideal time to build robust strategies that will ensure the longevity of your business. In creating strong plans, you might encounter the words “business continuity” and “business resilience.”
Professionals in the industry often use these terms interchangeably; however, they carry different meanings, albeit with some overlap.
Knowing the difference between business continuity vs business resilience can incredibly benefit your business. This knowledge can help you set your business up to withstand and flourish amidst upcoming disruptions.
What is Business Resilience?
Business resilience is the ability of a company to overcome disruptions, adapt to new environments, and maintain resources and high-quality output in the process. It’s a trait that must be embedded in the company’s culture and how the business itself is structured. It isn’t only about seeing solutions but opportunities, too.
According to the Boston Consulting Group, resilient businesses gain a competitive advantage during crises because they cushion the impact of the major event, as well as recover and adapt quickly.
The clearest example of business resilience is what occurred during the global health crisis brought about by the COVID-19 virus. The World Bank reported that companies’ sales plummeted 45% from April to September 2020.
According to Yelp’s Economic Impact Report in September 2020, almost 100,000 businesses shut down for good, but many were able to continue their operations—with some businesses even thriving.
In a McKinsey survey, three in four respondents mentioned that business-model innovation gave them the most leverage. Their new business resilience plan focused on delivering new products, making new partnerships, and launching sales-model changes where they needed to adapt to flexible work arrangements.
Most of the innovations they shifted to were primarily customer-facing, which may be considered as part of their customer retention strategies.
The survey results indicate that businesses prioritising flexibility and resilience are better equipped to manage disruptions.
Key components
- Risk management and planning: Building a resilient business means understanding the risks it can face and how to overcome them.
- Adaptability and flexibility: Resilient businesses don’t have very rigid structures, allowing them to pivot to new strategies and frameworks should a need arise.
- Good governance and management: Resilient business leaders can’t be close-minded or uncooperative. Good governance cultivates a proactive environment that prepares and trusts employees for changes.
- Long-term vision: Resilient businesses understand there’s always more than one way to achieve their objectives. It’s why they encourage innovation, new partnerships, and strategies.
Another way to understand business resilience is to know what it isn’t or how it differs from business continuity.
What is Business Continuity?
Business continuity is an organisation’s plans and procedures to keep operations going in case of disruptions. It involves developing a business continuity plan that considers the possibility of sudden disruptions within the company, the industry, or the physical location.
For example, if a business’s office is located in an area with frequent typhoons and power outages, they need their computers running because it contains sensitive and important customer data. Part of their business continuity plan could include installing generators and regularly backing up their files to an external drive during fair weather days.
Leaders must develop a comprehensive business continuity plan because the consequences can be monumental. According to an Information Technology Intelligence Consulting (ITIC) survey, any interruption in service that lasts an hour can result in a business incurring losses ranging from one to five million dollars.
Data breaches are another threat that leaders must consider when developing their business continuity plan. Almost 88% of boards of directors believe cybersecurity is a business risk and not something only the information technology (IT) department needs to handle.
With this, you must ensure you have the infrastructure to protect your customer’s data. Especially within the business process outsourcing industry, it’s essential to focus on call centre data security to safeguard both company and customer data. Doing so guarantees the security of any data received and processed in the call centre.
Key components
Risk assessment and mitigation: A business continuity plan involves assessing potential risks and finding ways to protect businesses. A business impact analysis is commonly used to determine the effects of these risks.
Backup and recovery systems: Developing redundant systems of fail-safes allows a business to continue operations even during total disruption, such as a power outage.
Continuity plans: A business continuity plan is one of an organisation’s best defences against crises since it guides managers and employees on the procedures to take during unforeseen events.
Testing and monitoring: Businesses can’t set and forget their continuity plans. They should regularly train staff and evaluate processes to assess progress in their strategies.
Business Resilience vs. Business Continuity: 5 Factors to Consider
It can get confusing when discussing the differences between business continuity vs. business resilience. Check out the information below to help you untangle their definitions and clarify what makes each distinct.
- Scope
Business continuity involves the organisation’s procedures to stay protected during a crisis. It’s about preparing by making plans so leaders can respond calmly to unexpected events.
On the other hand, business resilience has a deeper and broader scope. It reaches the culture of a business, how resistant it is to disruption, and opportunities in the market to seize. - Approach
A business continuity approach is more process-driven when disaster strikes, ensuring everything operates well. Business resilience is more strategic, enabling organisations to pivot rapidly and effectively when necessary.
Business continuity involves laying out plans to ensure existing operations are still in motion in one way or another, to minimise the impact of the disruption. A common business continuity plan approach is the Plan, Do, Check, Act (PDCA) model, which, in simple terms, could look like this:- Plan: Managers should conduct a business impact analysis to assess the severity of the disruption. In the case of a storm causing power outages, the Plan step would include determining which areas would be operational and which wouldn’t be.
- Do: Employees will then need to perform the protocols of their company’s continuity plan. For instance, if there’s no electricity in the building, employees would need to retrieve data from backup devices.
- Check: Managers must regularly check the employee’s knowledge of the continuity plans to ensure they know it well. Running drills and exercises are common ways to review employees’ performances.
- Act: Finally, employees must proactively protect the business from disruptions, typically updating plans and drafting after-action reports (AAR) to see what they can improve.
On the other hand, besides having contingency plans, a resilient business may educate its staff on the latest trends to ensure they’re ahead of competitors should new technologies emerge. Resilient organisations may also be more open to adopting new business models, as many start-ups have done during the pandemic.
- Plan: Managers should conduct a business impact analysis to assess the severity of the disruption. In the case of a storm causing power outages, the Plan step would include determining which areas would be operational and which wouldn’t be.
- Timetable
A business continuity plan is typically a short-term solution to ensure that disruptive events haven’t stopped the business in its tracks, while a business resilience plan is longer-term. The Harvard Business Review debunks a myth about business resilience showing that it can have beneficial effects long after the event. - Benefits
A business continuity plan ensures an organisation can resume operations even during crises. It allows them to sustain their revenue, protect themselves from further losses, safeguard employees, and maintain the core functions of the business.
Since business resilience has a much broader scope, it helps the business become even more competitive. It also encourages employees to innovate solutions and stimulate long-term growth. - Impact
Since a business continuity plan is usually for the shorter term, its impact may only go as far as minimising the effects of the disruption. It means businesses will likely return to the way things were before if the upward operational momentum isn’t sustained. While that may not always be disadvantageous, it could also make the business vulnerable to further disruption.
It’s why some resilient businesses tend to grow from the disruption, becoming antifragile. Some changed their business model to survive and thrive, allowing new customer experiences and working methods.
Why Companies Need Business Resilience and Business Continuity
Despite the ongoing debate on business resilience vs business continuity, an organisation needs both to succeed. Take a look at the benefits a company can enjoy if it has a keen understanding of what is business continuity and what is business resilience.
Prepares the business for unforeseen disruptions
Both involve dealing with unforeseen situations that are likely to disrupt the flow of operations.
If businesses intend to stay for the long haul, leaders must consider all possibilities of what might happen. Here, it helps to understand Murphy’s Law, or the adage “anything that can happen will happen.” Just because an event is improbable doesn’t mean it’s entirely impossible, which is why business still needs extra precautions.
Maintains essential functions and services
Business continuity and resilience are about survival, which entails keeping a company’s essential functions and services operational. The best example is how restaurants adapted to lockdown restrictions.
Since no one could go out to eat, there was a sudden spike in demand for food delivery services. Restaurants had to act fast, with takeout and delivery services now becoming essential for customers. Without making the pivot to provide for growing demands, it’s likely for a business to sink rather than swim.
Increases customer trust and loyalty
According to a Protecht survey, 56% of the respondents rated operational resilience a very high priority for a good reason: customers are more willing to trust your business if they know you can deliver the same high-quality service, even during times of crisis.
Protects businesses from loss of resources and assets
There’s little time to think during times of crisis. Creating a business continuity plan beforehand allows you to think through the best possible allocation of resources during a potential problem.
Knowing what to do way beforehand will help you stay calm during crises and protect your company’s resources and assets.
Ensure long-term business growth
A key to business growth is longevity to reach profitability. It inherently involves being resilient and adapting to change, especially in the rapidly evolving world of technology. According to Zippia, seven in ten companies (70%) are already working on their digital transformation strategies to keep up.
Keep Moving Forward
If continuity is about surviving, resilience is about thriving—it’s about a business’s plan and personality. While there’s a nuanced difference between business resilience vs. business continuity, any organisation needs both to succeed in the long run.
No one can deny that the economy is turbulent, and the business landscape keeps shifting. Re-strategise and strengthen now to withstand future disruptions and thrive.
Managing your business through a crisis is stressful. If you’ve relied on your internal workforce for services like customer service, consider outsourcing the task to help cushion the impact of sudden internal changes.
Select VoiceCom is Australia’s premier call centre in the Philippines, providing professional inbound and outbound call centre services to help your business succeed. Contact us today to learn how our outsourcing services help your business during industry disruptions.