Difference between Business Continuity and Contingency Plan

Any kind of disruption must be avoided at all costs if a business is to continue to thrive. Most events with the potential to disrupt business operations cannot be foreseen. Terrorist activities, cyberattacks, and natural disasters like floods, earthquakes, and fires all fall within this category. These things have a negative effect on organizations financially, as well as in terms of consumer loyalty and market share.

Because no one can predict what will happen or how fast businesses will be able to resume regular operations, it is the duty of businesses to ensure that their operations can continue normally in the event that something goes wrong. This kind of precautionary measure includes things like backup plans and strategies for keeping business operations running smoothly.

What is Business Continuity?

The term "business continuity" is used to describe a company's ability to keep running normally in the presence of disruptive factors. A pandemic, a commercial crisis, a natural disaster, or workplace violence are all examples of such events. Companies should anticipate and make provisions for any occurrences that may have an adverse effect on the company's activities and services, as well as major interruptions that would have an overall impact on business operations.

The following are examples of what may be in a business continuity plan, however, this is by no means a complete list −

  • The team that will handle crises as they arise

  • Clients are assured of having easy access to services and to other clients through the arrangements put in place.

  • Workers are given some help through a series of measures.

  • Restatement of an organization's essential functions by the application of various technological means

  • Where to relocate workers and company if essential facilities are unavailable

  • It's important to plan ahead so that there are enough people on hand in case of an emergency.

A business continuity strategy will safeguard a corporation from a range of possible threats, including the following −

  • Fires, technological failures, earthquakes, and floods are some examples of the natural and local tragedies that could occur.

  • Disruptions to networks: This is vital information for firms that must have dependable connectivity to run.

  • Cybersecurity - Because of the growth in the number of cyberattacks, firms should ensure that all of their data is backed up.

  • Outages can be caused by irresponsible acts and a lack of awareness on the part of humans; these problems should be avoided wherever feasible.

What is Contingency Plan?

Any event or circumstance that occurs outside the normal course of business is considered a contingency. In light of this, we can say that a contingency plan is a definite and actionable strategy that will be implemented in the event that a certain risk to the company or an adverse event occurs. Risk management is the process of developing backup plans to deal with both anticipated and unforeseen problems. This may be refined to better take advantage of future strategic chances.

Having a backup plan is essential for every business, but especially so for smaller and medium-sized enterprises (SMEs), which are just as vulnerable to disruption from unforeseen events as their larger counterparts. Moreover, they may be modified to meet the needs of individual divisions. To protect, restore, and utilize data in a business, for instance, the information services department may need to draft a backup strategy.

The significance of making plans for unforeseen events -

  • After an unexpected occurrence has taken place, businesses should be able to quickly restart normal business activities.

  • Minimizes consumer hassles

  • In the framework of the recovery, the identification of workforce requirements

The following are components that a solid backup plan needs to have -

  • Catastrophic events caused by nature, including earthquakes, fires, and storms

  • Crisis involving accidents and injuries that occurred in the job place

  • incidents involving personnel, such as strikes and fatalities of workers

  • Data loss

  • Problems with the product, such as relocating the plans

  • Mismanagement, including loss due to theft and unintentional destruction

The first step in creating a backup plan is to assess the potential impact of unforeseen circumstances on critical business processes and areas. The next thing to do is to map out the steps that will be taken to put the plan into action in the case of an emergency. What has to be done, and what resources will be needed, to get things back up and running smoothly must be identified and recorded. To be successful, a contingency plan must take into consideration the whole range of a company's operations.

Differences: Business Continuity and Contingency Plan

Both include requiring measures that businesses must take to keep running following calamities. The following table highlights how Business Continuity is different from Contingency Plan -

Characteristics Business Continuity Contingency Plan
Definition Business continuity refers to an organization's ability to carry on with its normal operations and activities notwithstanding the occurrence of unforeseen events. A "contingency plan" is an actionable and clearly stated strategy to be implemented in the case of a specified threat to the business or a negative event.
Concept At its core, the concept of "business continuity" is the idea of a corporation existing despite the occurrence of unimaginable tragedies. The goal of contingency planning is to have a strategy in place for handling any and all disruptions that may occur, as well as the processes that must be followed in such a case.


Business continuity refers to an organization's ability to carry on with its normal operations and activities notwithstanding the occurrence of unforeseen events. The concept is based on the premise that business may go on as usual following catastrophic events.

A contingency plan, on the other hand, is a specific and well-described set of actions to be taken in the event that a certain risk to the firm materializes or an undesirable event takes place. It is based on the concept of being ready for any and all interruptions, and on the actions that are to be taken should they occur.

Updated on: 13-Dec-2022


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