Business Continuity vs. Disaster Recovery: Key Differences

he upheaval of the past few years has illustrated how important it is for businesses to prepare for all types of unexpected events. Natural disasters, public health emergencies, and malware can all potentially interrupt your business operations. While you can’t always prevent these types of disruptions, you can minimize their impact by developing strategic plans to keep your core business functions going even under adverse circumstances.

Business continuity and disaster recovery are terms that people often use interchangeably when discussing preparedness. However—while there is an overlap between the two ideas—each one addresses different aspects of handling business disruptions. This guide outlines the similarities and differences in business continuity vs. disaster recovery so you can develop a plan for both.

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What is business continuity?

A business continuity plan outlines how you can keep your business running during a disaster or disruption. It’s not a plan to fix the underlying cause; instead, it’s focused on staying open so you can continue serving customers and generating revenue.

The pandemic disrupted business on a massive scale. Businesses that adjusted quickly were able to pivot and come out on the other side more resilient and profitable. Milwaukee Food and Tours temporarily changed its business model from offering in-person tours to delivering customized gift baskets, for example. Innovative Fitness made the shift from offering personal training in gyms to online sessions that focused on working out at home.

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What is disaster recovery?

A disaster recovery plan outlines how you can identify and fix the source of the emergency. In some cases, such as a pandemic or hurricane, you can’t address the underlying cause alone. In others, such as a bug in your codebase, your internal team can fix it. Either way, you should have a plan in place to deal with elements that are within your control.

Cyberattacks are the most likely type of disaster modern businesses will face. Although you can and should take steps to protect your IT systems and data, even large corporations with almost-unlimited resources such as Microsoft experience cyberattacks. A business disaster recovery plan will help you mitigate the damage from all types of disasters, regardless of what caused them.

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Key differences between business continuity and disaster recovery

It’s easy to mix up business continuity and disaster recovery plans because they’re both implemented in the event of a business catastrophe. However, understanding the differences between them will help you create more effective plans.

Priorities

A business continuity plan prioritizes staying open for business and minimizing the impact of the disaster on daily business operations. A disaster recovery plan prioritizes dealing with the disaster itself and getting your systems back to their baseline as soon as possible.

Timing

A business continuity plan goes into effect as soon as you realize your business is going to be affected by a critical event. Your continuity plan comes first. The disaster recovery plan will come later, usually after the emergency has passed.

Scope

Business continuity is broader in scope than disaster recovery. It includes all factors that contribute to running your business, from back-end components such as your supply chain to front-end considerations such as staffing. A disaster recovery plan is more narrowly focused on restoring the elements that were damaged, such as your data and IT systems.

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How a business continuity plan and disaster recovery plan overlap

Despite their differences, there are also many ways that continuity and disaster recovery plans overlap. Understanding how they overlap can help you save time when you’re creating them. A business continuity plan should include your disaster recovery plan since it’s a comprehensive plan for responding to all aspects of business disruption.

Both plans require proactive risk analysis to identify potential threats and how they'll impact your business operations. You’ll also need to detail roles, policies, and procedures for both. Once you’ve implemented your plans, they need to be regularly evaluated and tested.

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What to include in a business continuity plan

Your business continuity plan will be unique to the needs of your business. There’s no one-size-fits-all approach. However, there are some elements that should be included in every business continuity plan.

Administrative details

The first part of your plan should include the purpose and objective of your plan as well as a detailed breakdown of your timeline and budget.

Governance

The governance section includes the names, roles, and contact information for everyone on the business continuity team. Outline who is responsible for what and whom each team member is accountable to.

Risk analysis and impact

This section will require research into the types of disasters that may occur in your industry or geographic location. While you’ll want to flesh out more common crises such as a cyberattack or banking fraud, you should also think about how rare events, such as a pandemic, could affect your business. Consider how each one could interfere with business operations, including what areas will be impacted.

Preventive and responsive strategies and procedures

Building on your risk analysis, you’ll be able to determine what your preventive and responsive strategies should be. Simply being aware of the possibilities may help you implement strategies that can prevent some types of disasters. For example, nearly 73% of small businesses in the U.S. have experienced a cyberattack. Cybersecurity awareness training can help your staff avoid falling for the most common types of cyberattacks and head off a catastrophe.

However, there’s no way to prevent all disasters, so you need to include detailed procedures for responding to and recovering from crises when they do occur.

Training and testing

Include a section that covers how you’ll train your staff and test your plan. Training plans should be tailored to each role. Your response team will need more detailed training, but everyone should receive basic disaster preparedness training.

Your plan should also include testing scenarios, from tabletop exercises to full-scale drills. As part of your testing procedures, evaluate your response and incorporate your insights into your plan.

What to include in a disaster recovery plan

Your disaster recovery plan is part of the responsive procedures included in your business continuity plan. It should be focused on identifying what elements of your business—particularly IT resources—will need to be restored in the event of a crisis and the procedures for doing so. It should include the following elements:

• A comprehensive list of all your IT assets, including data backups
• Your top-priority resources that need to be restored first
• Procedures for restoring critical systems
• Backup plans and procedures
• Training and testing plans

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Summary

Planning for how your business will deal with unexpected emergencies can help you recover quickly and stay in business longer. Hopefully, you’ll never need to use your plans, but in today’s turbulent business landscape, it’s better to be prepared. One critical aspect of emergency planning is having backups for all of your critical data.

Using Novo’s cloud-based business banking solution means you’ll always have access to your important financial information no matter what happens. Sign up today to get started.

Novo is a fintech, and not a bank. Novo acts as a service provider to Middlesex Federal Savings, F.A., and the deposit and banking products obtained through the Novo platform are provided by Middlesex Federal Savings, F.A.

Novo Platform Inc. strives to provide accurate information but cannot guarantee that this content is correct, complete, or up-to-date. This page is for informational purposes only and is not financial or legal advice nor an endorsement of any third-party products or services. All products and services are presented without warranty. Novo Platform Inc. does not provide any financial or legal advice, and you should consult your own financial, legal, or tax advisors.

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