Business continuity planning

Y2KIssues

by Frank Parth
Capers Jones, Contributing Editor

BUSINESS CONTINUITY PLANNING is the process of ensuring that the organization's core business systems survive any Year 2000 disruptions caused by either internal failures or external failures. From a planning standpoint, we may approach the problem by looking at three areas: infrastructure problems, manufacturing and supply chain problems, and business processes.

Determine what the mission-critical systems are, perform a risk assessment, develop contingency plans, and determine what will trigger the start of each plan. For the most critical areas, backup systems should be put into place to ensure continued operations.

Many organizations are creating business continuity work groups. This group includes representatives from major business units, functional experts in areas such as manufacturing, disaster planning experts, and legal representatives. Their charter is to document the specific risk areas the company faces, perform an impact analysis, and determine the mitigation responses to those risks. The task should be managed as a subproject in the overall Y2K project.

Once you've figured out what could go wrong, figure out what you plan to do about it.

The Planning Process. There are so many unknowns in managing Y2K projects. We have developed long lists of things that could go wrong, but are unable to identify the specifics of what will go wrong. Because of this uncertainty, it becomes impossible to plan for all possible contingencies. The items that should receive resources fit into three categories: they are mission critical; they have a high probability of failure; their failure has a high impact on the business.

For each of those systems that fit into these categories, a contingency plan should be developed identifying specifically how any problems will be dealt with and who will deal with them. Backup processes should be instituted to ensure continued operations where failure would be too costly: for example, leasing power generators to keep critical systems running if the electrical power should fail.

Infrastructure Problems. The organization's infrastructure consists of all of those background systems that we take for granted on a daily basis—electrical power, telephones, computer systems, Internet service, and so on. This is a complex of highly interdependent and fragile systems.


Frank Parth is a project manager in Year 2000 projects at Keane Inc. He also maintains adjunct faculty positions at USC and at the University of California-Irvine, teaching systems engineering, project management, and new product development.

These are systems that the organization does not have control over and where it is almost completely dependent on the suppliers. There is little the company can do to ensure these systems are fully Y2K-compliant. Instead, the company must take steps to mitigate any impacts that failure might have on them

Manufacturing and Supply Chain Problems. The most likely problems in manufacturing lie in the area of embedded processors such as PLCs and SCADA systems. several chip manufacturers have identified problems with specific chips and are providing compliant versions. However, it is not simple to shut down a line, replace components, and test the line before bringing it back up.

Supply chain issues revolve around receiving raw materials and shipping finished products. If the company is operating a just-in-time inventory system, they should order sufficient raw materials to allow them to continue manufacturing if one of their suppliers or the distribution chain cannot deliver essential materials for a week or two. Similarly, they should ensure that the distribution chain for shipping finished goods will continue to function. Backup contracts should be negotiated with second-tier distributors in case the primary distributor is unable to provide uninterrupted service.

Business Operations. One Y2K task that has assumed increasing importance is that of drawing system interface diagrams and process interface diagrams. These diagrams show clearly where each business program or process gets its data and where the data is output, and they form a very clear picture of how the business operates. They can be used as the basis for developing contingency processes. Once it is understood what the process is, manual processes can be developed by the business continuity team to ensure that operations can continue even though in a degraded state.

MOST IMPORTANT to Y2K failures is to backup all essential business data, including historical records and, as close to the end of 1999 as is feasible, store them off-site. If backup systems are available to continue operations, ensure that the backup systems do not have Y2K problems themselves. images

March 1999 PM Network

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