The Need for a Business Continuity Plan in Automotive Retail

As the recent CDK incident highlighted, disruptions can halt an entire automotive operation. System failures and cyberattacks are unfortunate realities: therefore, having a comprehensive Business Continuity Plan (BCP) is essential for protecting dealerships from these risks across all areas of the business and ensuring that an operation can continue to operate during an interruption. 

“Business Continuity Planning is not just an IT function,” points out Scott Spatz, CEO of Cooperative System. It is a business risk mitigation exercise where you’re evaluating all different components of impact to the organization.” 

BCP 101

A BCP prepares businesses to handle disruptions such as natural disasters, system failures, or security breaches. The goal is to ensure that operations can continue with little interruption or data loss, maintaining both business revenue and customer trust. 

An effective BCP includes:

• Data recovery: ensuring that all critical information is backed up and can quickly be restored.
• System restoration: preparing for the efficient restoration of IT systems and applications. 
• Department coordination: ensuring all departments are aligned and know their role in case a disruption occurs.

While disaster recovery focuses on restoring the system after an incident, BCP allows for a broader, proactive approach to ensure continuous operations. It focuses on how disruptions affect the entire business, not only IT systems. 

“Disaster recovery is just one piece of the puzzle,” adds Spatz. “Business Continuity Planning is a much higher-level exercise. It’s about sustaining operations when critical service providers or systems are unavailable.”

Unique BCP Needs for Automotive Retailers 

Automotive retailers face industry-specific challenges that make BCP even more critical. For example, dealerships are heavily reliant on integrated systems for inventory management, customer service, and financial processing. These systems are the backbone of the business, enabling smooth operations across all departments.

“There are still some industries that can do business if their technology systems are down. Automotive retail is not one of them,” he notes. “If their systems are down, they can’t sell or service vehicles. Operations can grind to a virtual halt.”

The reliance on interconnected systems means that any disruption can have consequences. For instance, if a Dealer Management System (DMS) goes offline or experiences a security breach, the impact spreads across sales, service, and customer interactions. A failure of these core systems can bring operations to a standstill.  

Because of this, BCP in automotive retail is about much more than simply restoring IT infrastructure–it’s about preparing for the unexpected and ensuring that all technology-driven processes can continue during a disruption. 

A comprehensive BCP goes beyond disaster recovery. It requires a holistic, organization-wide effort to assess technological risks, create mitigation plans, and continuously test systems preparedness.  

Scenario Planning and Testing

BCP is not complete without regular tabletop testing. This involves simulating various scenarios to identify potential plan weaknesses. By doing this, dealerships can determine how well their BCP would perform in real-time and identify issues that need to be addressed. 

“Realistic scenario planning can answer a range of core questions about your system and potential disruptions,” Spatz asserts. “What do we have the capacity to do right now to work around this incident? Where are we not prepared? What do we have that’s unprotected? Identifying gaps helps us proactively mitigate as much risk as possible, with this plan.”

Regular tabletop testing ensures that employees are familiar with the plan, know their roles, and are prepared to act swiftly in the event of a real disruption. Without planning and testing, even the most well-designed BCP may fail when needed. 

“In general, a BCP takes into account the level of resiliency in your business based on its specific needs and what it can withstand,” says Spatz. 

Partnering with MSPs

Given the complexity of managing a robust BCP, many dealerships choose to partner with Managed Service Providers (MSPs). MSPs offer specialized expertise in business continuity, security, and compliance, helping dealerships ensure that their BCP is not only comprehensive but also up to date with the latest practices.

MSPs can provide proactive monitoring, system maintenance, and expert advice on how to improve business continuity efforts. Their role is to integrate all aspects of the dealership’s IT systems and ensure they are prepared. 

But it’s much more than that, Spatz says. 

“It’s not just an IT function,” he says. “Business Continuity Planning is a business leadership team function that needs to be derived and executed from the very top level 

down. It encompasses every area of the operation, from finances and operations to human resources. All of the core departments of an organization have a role to play.”

Key issues in organizational planning are communication and documentation. 

“Identifying communication mediums and vectors and levels of responsibility of who’s responsible for what components during an incident is critical,” he says. “Documenting what should happen in the event of a certain type of incident, clearly designating roles and responsibilities, and overall plan execution is a company-wide concern. In developing BCPs, we partner with organizational leadership to ensure a top-down, cross-organizational process.”

A comprehensive BCP is essential to minimize downtime, mitigate risk, and ensure the long-term success of an automotive retail business. Whether it’s a system outage, a security breach, or a natural disaster, having a well-prepared BCP is not a luxury in today’s interconnected world but a necessity.

Look for the next installment in our series, “Understanding Automotive Retail’s Regulatory Environment.” 

Regardless of the type of business you operate, contact us to learn how Cooperative Systems can help you develop a BCP that meets your specific operational and security needs.