Disruptions to your business are not a theoretical risk. Natural disasters, cyberattacks, and operational breakdowns continue to rise in frequency and cost, placing organizations under sustained pressure to strengthen resilience. Fortunately while disasters are inevitable, failure is optional when organizations plan ahead. The follow article outlines a clear, actionable framework for preparing for and recovering from business-interrupting events.
The Cost of Unpreparedness
A disaster is any unplanned interruption of normal business operations for an unacceptable period of time. Disaster data underscores how devastating these interruptions can be:
- Average recovery from a ransomware attack is 21 to 24 days.
- 93% of businesses that lose access to data for more than 10 days file for bankruptcy within a year.
- 51% of organizations suffering major data loss close within two years.
- FEMA reports that 40% of businesses never reopen after a disaster, and another 25% fail within one year of reopening.
- In 2024, the U.S. experienced 27 natural disasters exceeding $1 billion in damage each.
These numbers illustrate the urgency of building a structured recovery capability. The benefits of preparation—shorter downtime, faster recovery, lower incident costs, and sustained customer trust—far outweigh the effort required.
Form a Disaster Recovery Team
A resilient organization begins with the right people at the table. Disaster recovery cannot be siloed within IT or delegated solely to senior leadership. It must reflect the full operational ecosystem.
Here are some key considerations when forming the team:
- Cross-functional representation: Include leaders and operational staff from finance, IT, HR, facilities, operations, legal, communications, and customer service. Each department both contributes to and depends on continuity.
- Frontline involvement: Employees who work closest to daily operations often have the clearest understanding of practical vulnerabilities and workarounds.
- External stakeholders: Key customers, essential suppliers, insurance providers, and local emergency agencies offer insights unavailable internally.
- Clear roles and responsibilities: Assign a designated disaster recovery coordinator, functional leads, communication officers, and alternates. Clarity reduces confusion during a real event.
The goal is to build a cohesive team that understands the organization’s operations and can execute coordinated action under pressure.
Assess Your Operations
A thorough assessment ensures the organization understands what must be protected, restored, or rerouted after a disruption. This assessment focuses on three core tasks:
- Identify mission-critical functions: Determine which operations must continue within minutes, hours, or days. Examples may include financial transactions, customer support lines, data access, or manufacturing processes.
- Evaluate capabilities: Measure current preparedness using questions For example, are backups regular and accessible? Are systems redundant? Can teams work remotely? Are manual overrides available?
- Uncover weaknesses and bottlenecks: Identify single points of failure—systems, vendors, employees, or processes whose failure would halt operations. This includes aging infrastructure, over-reliance on individuals, and undocumented procedures.
This lays the groundwork for targeted planning rather than broad, generic response strategies.
Survey Risks
Understanding potential threats allows organizations to prioritize limited resources effectively. Risk identification should be broad and realistic, covering:
- Natural disasters: fires and earthquakes in California.
- Technological failures. system outages, ransomware, hardware failures, telecom disruptions
- Operational risks: staffing shortages, equipment breakdowns
- Human-caused events: fraud, sabotage, civil unrest, workplace violence
- External economic and political uncertainties
Once identified, rank risks using two key measures:
- Likelihood: How often might this occur?
- Impact: What would the financial, operational, and reputational damage be?
Mapping risks on a probability-impact matrix helps determine which threats require immediate planning and which can be monitored with minimal intervention.
Tailor Response Strategies
Responses must be strategic—not every risk warrants the same level of investment or attention.
- Prevent risks that are likely to occur and would have severe consequences (high probability, high impact). Invest proactively in safeguards such as redundancy, upgraded infrastructure, cybersecurity defenses, fire suppression, or employee safety systems. Prevention focuses on the risks most likely to cause severe disruption.
- Contain risks that are likely to occur but with minimal consequences (high probability, low impact. Some events are common but manageable—minor equipment failures, small service interruptions, or localized outages. Containment strategies include quick fixes, routine backups, and ready-to-use workarounds.
- Plan for risks that are unlikely to occur but would have serious consequences (low probability, high impact). Even rare events like earthquakes and wild fires, major data breaches, or extended power outages require a dedicated, documented plan to avoid severe losses.
- Accept risks that are unlikely to occur with minimal consequences (low probability, low impact). The key is documenting and communicating the rationale.
Tailoring strategies ensures resources align with actual risk exposure rather than generalized fear or speculation.
Establish Two Plans
There are two critical but often conflated plans. Both are necessary for a complete recovery strategy.
The Disaster Recovery Plan focuses on immediate response steps from the moment the incident is detected. A Disaster Recovery Plan includes:
- How the incident is identified and escalated
- Who is notified and in what order
- Steps to secure people, property, and data
- How to switch to backup systems
- When and how to initiate recovery procedures
- Documentation requirements during the event
A strong DRP reduces confusion, prevents delays, and ensures the organization executes a coordinated, safe response.
The Business Continuity Plan focuses on returning to normal operations. This includes:
- Prioritized restoration of systems and departments
- Arrangements for temporary facilities or remote operations
- Customer and supplier communication plans
- Manual procedures to bridge gaps
- Financial arrangements for recovery costs
If the Disaster Recovery Plan stabilizes the organization, the Business Continuity Plan enables its sustained functioning afterward.
Review and Test Your Plan
A plan that sits on a shelf is nearly as ineffective as having no plan at all. For these plans to be effective, they need continuous updating and validation. Key elements of this phase include:
- Regular review cycles. Plans should be updated after major organizational changes and at least once a year.
- Accessible communication. Plans must be distributed, understood, and readily accessible. Teams should know where to find them under stress.
- Training and drills. Have meetings where you walk through hypothetical scenarios. Have departmental walk-throughs of specific tasks. Have organization-wide simulations to test readiness under realistic conditions.
Testing exposes gaps in communication, capabilities, and decision-making—allowing improvement before a real disaster tests the plan.
What should I do?
Resilience requires discipline, consistency, and participation across the organization. Emphasize teamwork, risk awareness, strategic planning, and continuous improvement. With disruptions growing more common and more costly, organizations that invest in preparedness will gain a decisive advantage in resilience, financial stability, and long-term survival.
Credit where credit is due, this article was based on a presentation by Jennifer Elder at the AICPA Forensic & Valuation Services Conference on October 27, 2025.