Contingency Plan Development

Understanding IT Contingency Planning Information Technology (IT) contingency planning is vital in ensuring organizational resilience. It is a key component of a broader continuity strategy that integrates business operations, risk management, communication protocols, financial planning, and security measures. While each aspect functions independently, they form a cohesive framework to safeguard organizational stability. Contingency planning for IT systems involves creating backup solutions and recovery procedures to address potential risks—whether natural, technological, or human-induced. The National Institute of Standards and Technology (NIST) outlines a comprehensive seven-step approach in Special Publication 800-34 to guide organizations in developing effective contingency plans. From initial policy development and impact analysis to preventive measures, recovery strategies, and plan testing, each phase ensures robust preparedness. A critical part of this process is embedding recovery capabilities into system designs during their development lifecycle, ensuring readiness throughout implementation, operation, and eventual disposal phases. Key Elements of Effective IT Contingency Planning 1. Policy Creation: Establishing objectives, roles, responsibilities, and maintenance schedules. 2. Business Impact Analysis (BIA): This process involves identifying critical resources and setting recovery time objectives (RTOs). 3. Preventive Controls: To minimize risks, implement measures like uninterruptible power supplies (UPS) and frequent data backups. 4. Recovery Strategies: Designing plans to restore operations efficiently while considering budgetary constraints and system dependencies. 5. Plan Development: Document detailed procedures for recovery, aligned with organizational roles and system priorities. 6. Training and Testing: Preparing teams through exercises to ensure readiness and system reliability during disruptions. 7. Plan Maintenance: Regularly updating and validating the plan to reflect changing personnel, systems, and priorities. A well-crafted IT contingency plan is not just a response mechanism but a proactive strategy to maintain organizational resilience. By aligning technical recovery strategies with business continuity objectives, organizations can navigate disruptions effectively, protecting both operations and data integrity. How does your organization approach IT contingency planning? Let’s share insights and best practices! Be the Solution 🔒 | Secure Once, Comply Many ✅ #ITContingencyPlanning #BusinessContinuity #CyberResilience #RiskManagement #ITSecurity #DataRecovery #NISTGuidelines

We’ve built an entire federal agency to swoop in and protect depositors when they lose access to their funds due to a bank’s failure to manage its financial risks. But who swoops in to protect depositors when they lose access to their funds due to a bank’s failure to manage its operational risks? Nobody. That’s the clear lesson of the Synapse bankruptcy. If you think it’s a lesson that’s somehow contained to the banking-as-a-service ecosystem, think again. Operational failures that impair customer access to funds can and do occur at depositories of all shapes and sizes. Earlier this year, a credit union in my area suffered systems issues that temporarily prevented many of its depositors from accessing their funds. In my own experience, I’ve twice had megabanks cut off access to my “demand” deposits for several days due to their own operational errors. I know I’m not alone. If you’re concerned about your depositors’ exposure to operational risks - or your ability to address examiner questions about those exposures in the post-Synapse environment - here are some simple steps you can take: ◼️ Use risk assessment to understand your key operational vulnerabilities ◼️ Use contingency planning to mitigate those vulnerabilities and pinpoint needs for additional mitigation measures ◼️ Conduct periodic tabletop exercises to ensure both that your contingency plans work, and that key team members thoroughly understand their responsibilities

I was recently commissioned to support various organizations with contingency planning, which reminded me of lessons I've learned in this field over the years. Here is a summary (and of course Synaps is no exception): - Power dynamics. Organizations more often seek to hide weakness than discuss it. They are especially averse to discussing real insecurities and vulnerabilities with funding partners. Conversations about risks and liabilities tend to take reassuring forms: Risks are simplified and preparedness is played up. - Prior experience. Paradoxically, organizations are often fully prepared for the wrong crisis. They imagine threats based on situations they already know. Experienced staff may be particularly complacent: Those who performed well in the past may come to believe that they’ve seen it all. Relying excessively on lessons learned leaves them unprepared for an evolving context. - Wishful thinking. Looming crises are anxiety-inducing by nature. Many people default to reassuring themselves and their colleagues, more than assessing and preparing for the threat. This is counterproductive, but difficult to recognize and control. - Spinning in place. Another psychological pattern entails overthinking and under-implementing. An organization may fully acknowledge the risks and think through how to mitigate them, but stop short of making decisions, setting up processes, and allocating resources. - Poor analysis. Most organization’s lack the capacity for sound analysis, which is especially elusive on emotionally-charged topics. Even within organizations with designated analytic capacity, analysis isn’t always voiced and discussed in earnest. When safety is at stake, people often become defensive or evasive. This can result in groupthink, whereby a wrongheaded but commonly held understanding of a problem precludes real solutions. - Self-satisfaction. The most conscientious organizations sometimes fare worst in a crisis. They have sound policies, good ethics, and a strong reputation. Their staff are driven and proud. But a crisis is, precisely, about losing self-confidence, questioning what we believe, and adapting what to do. High functioning organizations can cave in when their comfort is shattered. - Scrambling. When dangers start looming on the horizon, agitation is likely to kick in, instead of preventive action. Managing uncertainty requires structure, which uncertainty tends to undermine. In a developing crisis, time accelerates, communication breaks down, and behaviors are more unpredictable. All this feeds into a loop, keeping an organization in a state of constant frenzy, at the expense of momentum. - Absent leadership. Contingency planning demands hard decisions. A director may have to allocate resources to stave off a threat that hasn’t materialized yet, and which other colleagues don’t take seriously. But when a director shuns such responsibilities, contingency planning devolves into endless debates and random actions.

Overbudget? Over Time? Over It. This Is Often Why You Blew the Deal. Real operators plan for chaos. Amateurs “tighten the budget". Many Real Estate Investors treat contingencies like rounding errors. That’s a mistake. A costly one. Contingencies aren’t just “extra.” They’re essential. They’re the insurance policy against the one thing you can count on in construction: something will go wrong. But not all contingencies are created equal. If you lump them together, you’re doing it wrong. Here are the different types of contingency. 1. Scope Contingency Think of this as the finish level lever. You planned to retile the pool? Great. Are you using basic tile or luxury imported stone? You’re still doing the work, but the cost range varies wildly. A scope contingency gives you optionality to downgrade or upgrade based on budget realities. 2. Line Item Contingency Built into specific items where uncertainty lives. Example: renovating the pool deck. You budget $50K, but you round up to $60K because you know—you know—you’ll find cracked pipes or hidden surprises once you tear it up. This isn’t fluff. It’s operator IQ. 3. General (Property-Wide) Contingency The catch-all. Usually 5–10% of your total construction budget. New construction? Maybe more. You're often working from schematics and allowances, not hard bids. That’s risk. Risk demands a bigger cushion. Smart builders negotiate shared savings with their GCs—so if you don’t burn it, you split the win. 4. Scheduling Contingency Time is money—literally. If your GC says 6 months and it takes 12, those “general conditions” (supervision, rentals, overhead) will eat your pro forma alive. Schedules don’t fail from construction—they fail from fantasy. If you didn’t plan for delays, you planned to fail. Track time like you track change orders—because every lost day costs. Don’t build a schedule so tight it snaps at the first rain, late shipment, no-show vendor, or slow inspector. You’re not building a Swiss watch. You’re running a job site. Pad your timeline. Expect delays. That buffer is the difference between chaos and control. And remember—delays compound. Push plumbing, and you push drywall. Miss inspections, and now you’re missing leasing season. That’s not a schedule slip. That’s a return killer. And don’t forget sequence errors: Do your landscaping before your exterior repairs? Congratulations, you just paid to do it twice. I’ve done hundreds of renovations and new builds. Want to know one of the fastest way to screw up your deal? Shrink your contingencies to make the numbers work. It feels smart in Excel. But when you’re 60 days into demo and discover your subfloor is shot—good luck explaining that to investors. Always round up. Always assume things will go sideways. If you don’t need the cash, send it back. Nobody ever complains about extra money. Need more money midstream? That’s when confidence vanishes and blame starts flying.

When a medical device relies on cloud services, FDA reviewers carefully evaluate the manufacturer's plan for handling potential cloud outages. ☁️ These disruptions can significantly impact device availability and functionality, potentially putting patients at risk. A common FDA objection in this area is: "it appears that your device is provided through a Cloud Service Provider (CSP). that is part of this environment. You did not provide your system environment, including cloud services. We were not able to locate information on the impacts to your device availability when a certain Cloud Service Provider (CSP) functionality or service may not be available or is impacted by an outage." This highlights the need to clearly describe your cloud infrastructure, identify potential points of failure, and explain how you'll mitigate the impact of cloud outages on device functionality and patient safety. 🏥 The guidance, "Cybersecurity in Medical Devices: Quality System Considerations and Content of Premarket Submissions," doesn't specifically address cloud outages, but it emphasizes the importance of designing for resilience (page 39). When documenting your cloud dependency and outage mitigation strategy, consider: - Cloud infrastructure description: Provide a detailed description of your cloud infrastructure, including the specific services used and their dependencies. 🗺️ - Outage impact assessment: Analyze the potential consequences of cloud outages on device functionality, data availability, and patient safety. ⚠️ - Contingency plans: Outline steps to be taken in case of a cloud outage, including alternative modes of operation, data backup and recovery procedures, and communication plans for users. 🛟 - Testing and validation: Demonstrate that you've tested your device's resilience to cloud outages and that your contingency plans are effective. 🧪 - Multiple Cloud Provider Strategy: Implement and validate preferably 3 cloud providers for your device environment, mitigate the risks such as how to get informed of changes in your device environment (you may establish business agreements). By providing this level of detail, you can assure FDA that you've taken a comprehensive approach to managing cloud dependencies and are prepared to handle potential outages effectively, minimizing the impact on device functionality and patient safety. 🛡️

𝑴𝒐𝒅𝒆𝒍 𝒕𝒐 𝑫𝒆𝒗𝒆𝒍𝒐𝒑 & 𝑼𝒔𝒆 𝑹𝒊𝒔𝒌 𝑪𝒐𝒏𝒕𝒊𝒏𝒈𝒆𝒏𝒄𝒚 𝑹𝒆𝒔𝒆𝒓𝒗𝒆 (𝑪𝒂𝒔𝒆 𝑺𝒕𝒖𝒅𝒚) Using a 𝐑𝐢𝐬𝐤 𝐑𝐞𝐠𝐢𝐬𝐭𝐞𝐫 & 𝐄𝐱𝐩𝐞𝐜𝐭𝐞𝐝 𝐌𝐨𝐧𝐞𝐭𝐚𝐫𝐲 𝐕𝐚𝐥𝐮𝐞 (𝐄𝐌𝐕) approach, project managers can easily develop a contingency reserve for their project & begin realizing the benefits of this powerful tool. The contingency reserve, which is 𝐓𝐢𝐦𝐞 &/or 𝐌𝐨𝐧𝐞𝐲 allocated to address identified risks, is a critical part of project risk management. With a contingency reserve, project managers can address risks that occur on the project, communicate the level of risk exposure to stakeholders, & increase the predictability of project outcomes. 𝐂𝐨𝐧𝐭𝐢𝐧𝐠𝐞𝐧𝐜𝐲 𝐫𝐞𝐬𝐞𝐫𝐯𝐞 is a critical component of 𝐐𝐮𝐚𝐧𝐭𝐢𝐭𝐚𝐭𝐢𝐯𝐞 𝐑𝐢𝐬𝐤 𝐀𝐧𝐚𝐥𝐲𝐬𝐢𝐬. Developing a risk contingency reserve, including it in 𝐂𝐨𝐬𝐭 & 𝐒𝐜𝐡𝐞𝐝𝐮𝐥𝐞 𝐁𝐚𝐬𝐞𝐥𝐢𝐧𝐞𝐬, & tracking its use as the project progresses will help increase the predictability of project outcomes. In addition, it becomes a powerful tool in demonstrating the value of risk management to project sponsors & other stakeholders. Used properly, risk contingency reserve can act as a shield against the damage that a project can sustain through the occurrence of risks. •𝐃𝐞𝐯𝐞𝐥𝐨𝐩𝐢𝐧𝐠 𝐭𝐡𝐞 𝐂𝐨𝐧𝐭𝐢𝐧𝐠𝐞𝐧𝐜𝐲 𝐑𝐞𝐬𝐞𝐫𝐯𝐞 The main inputs in developing the contingency reserve are the risk register and a quantitative analysis technique used to calculate the cost of each risk. Using 𝐄𝐌𝐕 to calculate contingency reserve is a simple way to harness the benefits of this powerful tool. 𝐄𝐌𝐕 = 𝐩𝐫𝐨𝐛𝐚𝐛𝐢𝐥𝐢𝐭𝐲 𝐱 𝐢𝐦𝐩𝐚𝐜𝐭 The Monte Carlo method is another powerful analytical tool that can be used to determine expected costs associated with risks in simulations of project schedules (PMI, 2013). 𝐋𝐢𝐦𝐢𝐭𝐚𝐭𝐢𝐨𝐧𝐬 𝐨𝐟 𝐑𝐢𝐬𝐤 𝐂𝐨𝐧𝐭𝐢𝐧𝐠𝐞𝐧𝐜𝐲 𝐑𝐞𝐬𝐞𝐫𝐯𝐞 𝐌𝐨𝐝𝐞𝐥 The risk contingency reserve model works well if many risks are identified & there's a diverse range of probabilities & expected risk impact. To be successful, an insurance company needs a large risk profile where there are not too many risks that are high probability. First, the model is not as useful when only a few risks have been identified. Second, the model is not as useful when all risks that have been identified have a high probability. Both of these situations can cause erroneous results because the total contingency reserve is based on the sum of EMV products for each risk, not the actual impact. If all the risks occurred, then the contingency reserve would be overrun, causing problems. If too few risks are defined, and the risks that are defined have high probability of occurrence, then this model may not produce correct results Full article & case study https://lnkd.in/dQbrFNUE #Sawy_Says

How military-style "war games" saved a business from losing out on $5 billion. A pharmaceutical giant was planning on launching a potential blockbuster drug. Then the FDA didn't approve it. Instead of panicking, the pharma biotech was prepared with a playbook. They had role-played this exact rejection scenario less than a year before, using a war game. After executing the playbook, they got the drug approved. War gaming's roots in business go back 40-50 years. They transform how many companies prepare for the unexpected. War games work because teams better know what to anticipate after a dress rehearsal. Arjan Singh has helped 100s of companies. Here are 3 lessons from him: 1. The best companies practice for failure Many companies typically avoid planning for negative scenarios. The pharmaceutical company simulated an FDA rejection even though people resisted it. They documented exactly how they would respond if it happened. When the drug got rejected, they didn't waste time figuring out how to respond. This preparation set them up for faster success. --- 2. Step into your competitors' shoes We typically plan from our own perspective. War gaming forces you to actively think like your competitors. Singh points out that you're not just competing with your direct competitors, but with other options your customers have. Airlines no longer just compete with other airlines — they compete with Zoom and Teams too. The best opportunities surface from seeing the competitive landscape through different eyes. --- 3. Turn insights into action Most planning sessions create ideas that never get implemented. War gaming creates contingency plans for a variety of situations. Everyone aligns on what steps to take if certain scenarios happen. This transforms theoretical planning into a competitive advantage. Actionable playbooks built from war gaming create alignment and speed. --- Strategic companies don't just predict the future. They do a dress rehearsal.

Banking Agencies Update Liquidity Guidance: "Depository institutions should maintain actionable contingency funding plans that consider a range of possible stress scenarios. The events of the first half of 2023 have further underscored the importance of liquidity risk management and contingency funding planning. As seen in these events, the level and speed of deposit outflows at a few firms was unprecedented and contributed to acute liquidity and funding strain at those institutions. These events are a reminder to depository institutions that depositor behavior and broader market conditions may evolve over time, and sometimes without warning. Depository institutions should assess the stability of their funding and maintain a broad range of funding sources that can be accessed in adverse circumstances. In addition, depository institutions should be aware of the operational steps required to obtain funding from contingency funding sources, including potential counterparties, contact details, and availability of collateral. As part of operational readiness, depository institutions should regularly test any contingency borrowing lines to ensure the institution’s staff are well versed in how to access them and that they function as envisioned. In particular, depository institutions should engage in planning that recognizes the operational challenges involved in moving and posting collateral to access critical funding in a timely fashion. Such planning may require initial or renewed contact with entities such as the Federal Reserve System and the Federal Home Loan Bank System. Depository institutions’ contingency funding plans should recognize that during times of stress, contingency lines may become unavailable. For example, repo lines may become unavailable to a bank or credit union borrower either due to concerns of the repo lender about the creditworthiness of the bank or credit union or due to the repo lender needing to conserve liquidity more generally. Depository institution contingency funding plans should take this dynamic into account and include a range of contingency funding sources. Depository institutions should review and revise contingency funding plans periodically and more frequently as market conditions and strategic initiatives change in order to address evolving liquidity risks. For example, an institution that increases the share of its liabilities comprised of less stable funding should consider whether it needs to increase its capacity to borrow from contingency funding sources. The agencies view having access to a range of reliable contingency funding sources as a key component of safety and soundness." The release goes on to discuss Contingency Funding via he Federal Reserve Discount Window and the CLF NCUA's entire press release can be found here: https://lnkd.in/eDtbrppG