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( votes)Everything runs through your company’s enterprise resource planning solution (ERP). It is both the backbone for operations, and where all your business data lives. So if there is a disaster that impacts your ERP system, this is a big problem. For that reason, every business should have ERP disaster recovery and business continuity planning.
Why ERP Disaster Recovery and Business Continuity Planning is So Important
The damage from a disaster that impacts your ERP system starts with downtime. Any disruption to your ERP system will cause significant downtime and likely halt or hinder operations significantly. This leads to lost revenue.
Equally significant is data loss that might result from an ERP-related disaster. One of the key value propositions of ERP is centralizing data. In good times, this advantage is huge. But when there is a disaster that impacts your ERP solution, it can put customer data, financial records, shipping and order information, and product specification data at risk, among other data.
Data issues from an ERP disaster also can lead to your business falling afoul of regulatory requirements around customer data and compliance. For heavily regulated businesses such as pharmaceuticals or medical device manufacturing, the regulatory challenges from an ERP disaster can trump even short-term financial losses.
Then there’s reputation damage. If your business doesn’t have ERP disaster recovery and business continuity planning in place, an issue involving a data breach or work stoppage can quickly spiral into a brand-damaging event. Some companies never fully recover from a significant data loss.
Disaster Planning in Seven Steps
While there will be some damage with any ERP-related disaster, the key to minimizing its impact is robust ERP disaster recovery and business continuity planning.
When preparing for ERP disaster recovery and business continuity planning, there typically are seven key areas to focus on.
1. Risk Assessment
ERP disaster recovery and business continuity planning starts with risk assessment.
The process of risk assessment involves identifying vulnerabilities and potential threats that could lead to a malfunction in your ERP system. This risk assessment should include not only external threats such as cyberattacks and natural disasters, but also internal risks such as hardware failure or human error.
2. Business Impact Analysis
The next step in ERP disaster recovery and business continuity planning is evaluating the impact of ERP downtime on your business.
When assessing business impact, consider the impact on each part of your company’s operations, on the financial considerations, and any reputational damage that would come from ERP downtime.
By performing business impact analysis, you can better prioritize recovery efforts during a disaster. This prioritization can help reduce the operational and financial impact of a disaster.
3. Recovery Goals
Clear recovery goals help you flesh out an effective disaster recovery plan. Specifically, make sure you define time objectives and recovery point objectives in your ERP disaster recovery and business continuity planning.
Recovery time objectives define the maximum downtime that can be tolerated by your business before a disaster starts impacting revenue and customers. This defines how quickly your ERP solution must fully come back online.
Recovery point objectives is the maximum data loss that your business can tolerate without larger implications.
4. Data Backup and Storage
Because data preservation is key for minimizing the impact of an ERP disaster, good ERP disaster recovery and business continuity planning will include the procedures and systems for backing up your ERP data on an ongoing basis and ensuring that it can be easily recovered in case of a disaster.
Cloud ERP can significantly help with data backup and safe storage, and ERP solutions such as GROW with SAP can both automatically back up data and restore it relatively easily after a disaster.
5. Redundancy and Fallover
Your ERP disaster recovery and business continuity planning should include fallover options and procedures for if a disaster renders all or some of your ERP system temporarily inoperable.
Redundancy and fallover planning should outline how your business will continue to operate when key systems are down, and the mechanisms for automatically switching over to these backup systems during a disaster. This can help with minimizing disruption and maintaining operations during a disaster.
6. Communication Plan
In the event of a disaster, whether a cyberattack or an ERP system malfunction, there should be a plan for communicating with key stakeholders and delivering status updates as a disaster unfolds.
This plan should outline the communication strategy with employees, customers, stakeholders and the general public so confusion is minimized and disaster recovery responsibilities are clearly understood and can be quickly acted upon.
7. Disaster Simulation and Training
As part of ERP disaster recovery and business continuity planning, your business also should prepare for known risks through periodic disaster simulation testing and training.
These disaster simulations, much like a fire drill, should simulate the most common potential disasters your business will face in order to assess preparedness. It might include recovery drills, or even tabletop exercises.
Disaster training and roleplaying scenarios ensure that employees are familiar with their roles and responsibilities in a disaster, and regular practice increases employee confidence in the time of a crisis.
Get Help with ERP Disaster Preparedness
If your business needs help with ERP disaster recovery and business continuity planning, or you’re currently experiencing an ERP-related disaster, our experienced ERP consultants are here to help. Contact us at: www.nbs-us.com | info@nbs-us.com | (801) 642-0123
The post Navigating the Storm: ERP Disaster Recovery and Business Continuity Planning appeared first on ERP Cloud Blog.
