During the process of developing a Business Continuity Plan or strategy it is easiest to focus on the larger picture; to understand the major impacts and potential roadblocks. But when putting that Plan on paper (figuratively or literally) it is time to think about more granular logistical needs and issues. One that is often overlooked is where – and how – the money will come from to pay for that recovery strategy. A good plan must document that process, or create one if it doesn’t already exist.
Even if one assumes that the organization will pay any price to recover its business operations in the most timely manner possible, questions remain:
- Who has the authority to approve expenditures?
- What are the limitations of that authority?
- What is the process needed to gain approval of expenditures?
- How will expenses be documented?
- How will vendors and suppliers be paid?
If the Business Continuity Plan calls for moving personnel to another office many miles away, how will their transportation costs (airline or train tickets, fuel reimbursement) and lodging be paid?
If the recovery of a Facility requires the hiring of contractors and tradesmen to begin repairs, do those efforts need to go out for bid? Who is responsible for selecting those suppliers? And how will incremental payments be made?
If IT requires replacement of equipment, must they still follow sourcing procedures – or are those suspended during the disruption? How will the transaction be consummated? Is there a manual Purchase Order workaround; a corporate purchase card – or must someone charge the expense to their personal credit card?
Can that same IT Recovery Team Leader buy anything she needs – or must she get approval for acquisitions over a certain amount? Is that amount per item or cumulative? In what form must that authorization be documented? Who keeps track of the expenditures incurred – and how?
These are all fairly straight-forward questions. But, surprisingly, they are questions that are often not addressed in Business Continuity Plans. When the organization is already in a state of chaotic turmoil is precisely the wrong time to find out those answers (or worse, to find out there are no answers!).
Have your organization’s Finance, Purchasing or Accounts Payable functions already documented answers to those questions in their Business Continuity Plans? If so, make sure they are neither contradictory nor kept a secret from the rest of the organization.
Recovery Teams who understand the limits of their purchasing authority will be able to act quickly and not risk overstepping their purchasing authority. Asking the right questions will enable you to provide the proper guidance to all BCM Teams.
