Contingency Planning: Preparing for the Unexpected

Having a contingency plan can make a difference in how fast your business recovers from an emergency situation. Ryan Whittaker outlines step-by-step, the process of developing a solid contingency plan to minimize downtime and financial risk.

Disasters can occur in many forms, from the weather to an act of terror; any one of these events can take your business offline. How you recover from these events is a direct result of your planning. A disaster does not need to be disastrous.

In my position, I have seen many different situations where planning ahead can go a long way to recovering from an emergency situation. From hurricanes and major winter storms to a minor mechanical breakdown, I have seen some companies struggle for weeks and other companies recover in hours. The biggest difference has been planning. No one can predict a disastrous event. Just like having car insurance, if that unfortunate situation does occur, your contingency plan will get your business back online fast with minimal financial impact.

A contingency plan for your business is the process of identifying where you have risks and how to mitigate these risks. With a contingency plan, you can cut your recovery time from a disaster down from weeks to hours. Your organization should have many types of contingency plans in place, and they should cover all probable situations, from a minor power outage to a building system shutdown. By covering all potential causes, you will be ready to face an unexpected situation.

An important aspect of a contingency plan is establishing a relationship with a supplier of rental equipment and other services, especially if you have never developed a contingency plan before. These providers work as consultants to help find areas that you may not have thought of. Finding a partner who has expertise and is invested in your business can take some time. Don't wait until the disaster strikes to establish this relationship.

Developing your plan

Step 1 – Financial risk analysis
The contingency process begins with a review of the different functional areas of your facility, their dependence on power, HVAC, and the impact a loss could potentially have. You need to understand the importance of these items to your operations and quantify their financial impact.

Step 2 – Risk assessment
Identify all potential causes for an interruption and rank them based on cost impact, probability of occurrence and system downtime.

Step 3 – Equipment identification
Document all equipment in your HVAC and power systems, including their operating conditions. This process may uncover system weaknesses that need to be addressed prior to implementation of the plan.

Step 4 – Prioritization
Evaluate your most critical facility loads and process needs for essential operations, including those with the highest financial implications for your business. At this point, you may want to consider load prioritization and/or load shedding to reduce the amount of capacity required. For a short period of time, you may be able to operate with higher air temperatures in certain areas and completely shut down others.

Also, determine what your critical areas are. These are the essential components that your business cannot function without. Power, HVAC, process cooling, and even basic plumbing can have an effect on your recovery. Your contingency plan should address these areas. From a manufacturing plant to an office facility, each building has different and specific requirements. Identify and document what is most critical to your business operation.

Step 5 – System connection
How and where connections are made helps reduce time and money. Choose a location that is easily accessible and that requires the least amount of temporary installation material to keep additional costs to a minimum.

Step 6 – Power availability
The need to document the available voltage(s) and amperage is vital, because a transformer or generator may be required. Even if your power has not been affected, some temporary units may require more power than your existing units.

Step 7 – Electrical connection
Determine whether existing electrical service is adequate or new electrical service will be installed. Establish the location of the temporary electrical connection(s) and how they will be made.

Step 8 – Temporary equipment location
Establishing the location of the temporary equipment is important for determining how much electrical cable, chilled water hose and/or flex duct will be required. Little things like misjudging the distance from the equipment to the electrical panel or water connection can cause unneeded stress in an already stressful time. Also, take into consideration the safety of the public and personnel, security, ease of placement, equipment clearances, structural loads, ground firmness and level, noise, emissions (generator), public visibility, auto and pedestrian traffic, permits, and other things to minimize the impact on normal operations.

Step 9 – Plan creation
Develop and document your plan. Included in the plan are the recommended temporary equipment solutions, the total investment required (both capital and expense), budgetary figures for the temporary solutions (including first and recurring costs), and detailed roles and responsibilities for internal and external resources.

Step 10 – Implement and review
To help expedite the ordering and delivery of a temporary system in an emergency situation, it is important to make sure that all documents such as purchase orders and rental agreements are completed, and all recommended building modifications are made. Review and update your plan annually to ensure that it reflects current communication, responsibilities and resource information detailing how the organization will respond to an emergency. Some companies do a dry run in the off-peak season. These dry runs take you through every step in the process and help eliminate the unknown. You can turn this into a part of a human resources event like a safety and security fair or an emergency preparedness seminar.

When a disaster strikes, the first things that need to be established are the safety of your employees and an assessment of the damage. Is the building safe to enter? Once this has been determined, the triage begins. If you have a plan in place, this can be as simple as going through a checklist. Contact your rental provider and/or mechanical/general contractor for backup equipment and/or repairs, get it set up and get back to business. If you have not gone through a planning process, you can spend much of your time wondering "What do I do next?" With a reliable partner in place, you can take the guesswork out of recovery. Planning can put you ahead of the curve when a disaster happens.

By budgeting for your disaster recovery, you know that when a situation occurs, the funds are available and ready for distribution. Recovering from disasters costs money, but by planning for the situation, the budget is in place. By working with your partners, you can have purchase orders in place and equipment lists ready to go. Your partner knows where to set up and what they are responsible for. This eliminates confusion and speeds up the recovery process; each step has been planned in advance. Some rental partners offer standby equipment options that allow your business to have dedicated equipment ready to go in an emergency. This solution offers peace of mind to businesses that have large financial risks associated with downtime.

Planning for recovery allows building owners the peace of mind that comes from knowing what to expect in an emergency. By planning ahead and knowing what is going to be needed, you can eliminate many of the "what if's" that come when disaster strikes. By working with trusted partners, creating the plan, and testing it ahead of time, you can take the guesswork out of the recovery process. When you hope for the best but plan for the worst, you will be better prepared for an emergency situation.

About the Author

Ryan Whittaker is a Marketing Engineer with Trane Rental Services. He graduated from the University of Utah. Ryan conducts training on contingency plans and other aspects of emergency equipment preparedness. He can be reached at 800-755-5115 or visit www.trane.com/rentalservices.