rto business plan template

How to Start a RTO: Steps, Costs, Timeline, and Alternatives

• Gianpiero Rusconi
• Last Updated: 7 March, 2024

Interested in establishing your own Registered Training Organisation (RTO)? It’s a rewarding venture that lets you shape Australia’s future workforce. This guide will take you through the precise steps, costs, marketing requirements and necessary considerations for creating your RTO.

What is an RTO

An RTO is a recognised provider of Vocational Education and Training (VET). As an RTO, you will play a pivotal role in teaching practical skills and granting nationally recognised qualifications to your customers.

Starting an RTO: Things to Consider

Starting an RTO is no small undertaking. As with any well-delivered project, consideration needs to be given to planning out the business and opportunity that you see in front of you and working out if it is viable. A great (and fun) place to start is just by reading up about the history of VET in Australia. This will give you a great background and understanding of the industry. More importantly, here are some of the must-have considerations when starting your RTO.

1. Researching Your Market

Kick-start your journey by understanding your potential market. Look for skills gaps in your local industries and decide what qualifications you can offer to fill these. Your market research should cover the demand for these qualifications, potential learners, and competition.

2. Developing Your Business Plan

Your business plan is the backbone of your RTO. This should outline your strategic direction, market positioning, growth plans, financial projections, risk management, and staffing strategy. The Australian government offers a free Business Plan template to get you started.

3. Designing Training and Assessment Strategies

Each RTO must deliver training and assessments compliant with the Standards for Registered Training Organisations (RTOs) 2015. Select the training packages you’ll provide and draft your strategy for training and assessment. Make sure it meets the needs of your learners and employers. If you need some tips on improving your training and assessment strategy , we have the perfect guide for you.

4. Gathering Infrastructure and Resources

Your infrastructure should align with the type of training you’re providing. This includes acquiring suitable training facilities, learning materials, and technology. For instance, a cloud-based platform like Cloud Assess can streamline your operations and make RTO compliance easier.

5. Staffing Your RTO

Staffing your RTO involves recruiting qualified trainers and assessors who also have the necessary vocational competencies. Keep in mind that your staffing should align with the scale of your RTO and the scope of your registration.

6. Common Problems RTO Managers Face

To avoid surprises, you should do adequate research about common problems that RTO managers face . This includes managing copious amounts of paper (if you don’t choose an online solution), managing visibility, ensuring efficiency and growth, meeting compliance requirements, and guaranteeing the best possible student experience.

RTO Registration Process: A Step-by-Step Guide

1. initial registration application.

Starting your RTO involves a detailed initial registration process managed by ASQA (Australian Skills Quality Authority). You should also check out ASQAs detailed guide on initial registration to understand the process in more detail. Here are the crucial elements you need to prepare and submit:

• Business Plan: Your business plan should include details on your strategic and operational plans, market research, financial projections, and marketing strategies. The Australian government provides a free business plan template here .
• Understand the Regulatory Requirements: Familiarise yourself with the VET Quality Framework and the Standards for RTOs 2015. They provide a national set of standards to ensure consistent, high-quality training and assessment services in the vocational education and training (VET) system.
• Self-assessment against the Standards: As part of the initial registration process, you should conduct a self-assessment of how your organisation meets the requirements of the Standards for RTOs 2015. This is a useful tool to ensure that you are meeting all the necessary requirements. This self-assessment allows you to critically examine your resources, practices, and capabilities in alignment with the required standards.
• Fit and Proper Person Requirements Declaration: This form ensures that you, and other key personnel, meet the character requirements set by ASQA. Each person with managerial control must fill out this form. It can be found here .
• Financial Viability Risk Assessment (FVRA) Report: This demonstrates your capability to sustain operations financially. You’ll need to provide a range of financial documents, including forecasted revenue and expenses, and a business viability report. ASQA provides a useful tool here .
• Training and Assessment Strategies: For each qualification, course, or unit of competency you intend to offer, prepare a strategy outlining how you plan to deliver training and conduct assessments. ASQA provides guidelines here .
• Curriculum Vitae for all Trainers/Assessors: You will need to provide evidence of the qualifications and vocational competency of all your trainers and assessors.
• Policies and Procedures: Submit your planned policies and procedures that detail how your RTO will operate and ensure compliance with the Standards for RTOs 2015.
• Pay the Application Fee: The application fee is AUD $600 and is non-refundable.
• Submission of Evidence: After paying the application fee, you’ll have 90 days to submit your evidence of compliance to ASQA via ASQAnet. Make sure to check out some common RTO compliance concerns before submitting your evidence – this can save you a lot of time (and money).
• Await Initial Assessment: ASQA will review your application for completeness, which can take up to 30 days. If anything is missing or needs clarification, they will contact you.
• Risk Assessment and Audit: If your application passes the initial assessment, it moves to the risk assessment and RTO audit stages. These stages generally take 3-5 months but can take longer depending on the complexity of your application and scope of registration. This is explained more in detail in the next part of this post. At this point, you will be invoiced for the assessment at a cost of $8000 AUD.

Before you apply for registration, you should have everything ready because ASQA expects that you’re ready to start operating at the time of application. It’s critical to understand that applying to become an RTO means you’re committing to continuous compliance with the VET Quality Framework , which includes the Standards for RTOs 2015, and other relevant legislation.

Once your application is submitted through ASQAnet , ASQA will conduct an initial assessment, which might be followed by an audit. It’s essential to be prepared and familiar with this process so you can successfully register your RTO.

2. The Audit Process (ASQA Assessment)

The audit process includes both a risk assessment and a more in-depth audit:

• Risk Assessment: Once your application passes the initial assessment phase, ASQA conducts a risk assessment. During this process, ASQA considers various factors such as the proposed scope of your registration, the level of experience your staff members have, and your past compliance history if applicable.
• Notification of Audit: If your application progresses past the risk assessment, ASQA will notify you of the audit. The notice will provide the details of the audit, including the audit’s scope, the standards to be audited against, the proposed audit team members, the proposed dates, and a request for any additional information if required.
• Audit Plan: You will receive an audit plan that will detail the specific processes and practices that will be reviewed during the audit.
• Conducting the Audit: The audit itself may be conducted at your premises or remotely, depending on the circumstances. During the audit, ASQA auditors review your documentation, observe your practices, and interview your staff and students if applicable. They aim to assess your compliance with the VET Quality Framework.
• Audit Report: After the audit, the audit team will prepare a report outlining their findings. If non-compliances are identified, you will be provided with an opportunity to address these.
• Addressing Non-Compliances: If non-compliances are found, you have 20 working days to provide evidence that you’ve rectified these issues. If you need more time, you can request an extension from ASQA.
• Final Decision: After all non-compliances have been addressed, ASQA will make a final decision regarding your RTO registration. If approved, you will receive your RTO registration certificate.

Remember, the audit is an ongoing process, not a one-time event. ASQA conducts regular audits to ensure that RTOs maintain compliance with the VET Quality Framework. Always aim to prepare for and cooperate with these audits to maintain your RTO status.

How Long Does it Take to Start an RTO? Registration Timeline

Overall, the initial registration process generally takes approximately 4 to 6 months. This is split up according to the following steps:

• Submitting your application: The timeline starts with you submitting necessary documentation via ASQAnet.
• Initial assessment stage: Review of your application for completeness, possibly requesting additional information (up to 30 days).
• Risk assessment and audit stages: Duration can vary, typically taking an additional 3-5 months.

Please note that the durations provided are approximate and can vary based on the complexity of the application and other factors.

Be aware that ASQA maintains close monitoring for the first two years of operation to uphold standards. Stricter scrutiny was also implemented since July 1, 2018, with the additional evidence-based requirements that we discussed.

To make sure your registration proceeds as quickly as possible, prepare your application thoroughly and respond promptly to ASQA’s requests. Consider consulting an experienced professional or organization specialising in RTO registration for guidance.

Cost of Starting an RTO

1. initial registration application fee or lodgement fee.

The initial investment for starting an RTO is $600 AUD as of 2023 and it is non-refundable.

2. Assessment Fee

This fee covers the cost of ASQA’s assessment of your application, including the audit. As of the most recent information, the assessment fee is a fixed amount of $8,000. This fee must be paid within 90 days after you submit the application, and it’s refundable in part if your application does not proceed to audit.

3. Annual Registration Fee

Once your RTO is established, you’ll also need to pay an annual registration fee. This fee is tiered based on the number of qualifications you deliver:

• 0–4 qualifications: AUD $1,130
• 5–10 qualifications: AUD $3,220
• 11–60 qualifications: AUD $6,975
• 61 or more qualifications: AUD $10,730

4. Ongoing Costs

Complying with the VET Quality Framework involves regular audits, maintaining and upgrading training resources, staff professional development, and administrative costs. These can be substantial and should be factored into your budgeting.

One of the biggest costs that RTOs face is with regards to ensuring compliant training. While this can be done using traditional methods, one of the most cost effective ways to do this is using an RTO software for training and assessment. Cloud Assess is a software that can ensure ease of training and compliant assessment for all your students.

Tip: Before investing in this solution, make sure you know how to make the most out of our RTO software.

Potential Revenue Streams

Your main source of income will be student fees. Depending on your courses, you may also qualify for government funding programs. Remember, your pricing should be fair and competitive.

• Government Funding: Many RTOs benefit from government funding schemes. These schemes can be complex and often vary between different states and territories in Australia. Understanding these schemes and how they might apply to your RTO can be a significant source of revenue.
• Corporate Partnerships: RTOs can establish partnerships with businesses to offer specific training programs tailored to their needs. This could be a significant source of revenue and could also increase your RTO’s reputation in the industry.
• Consulting Services: RTOs with expertise in a particular industry or vocational area could offer consulting services to businesses. These services might include designing custom training programs, offering advice on skills development strategies, or assessing existing training programs for quality and effectiveness.
• Online Courses and International Students: With the right infrastructure, RTOs can offer online courses to students all over the world. This could dramatically expand the market reach of your RTO and offer a significant revenue stream. Just make sure that you are complying with CRICOS requirements .
• Short Courses and Workshops: In addition to standard qualifications, RTOs can offer short courses or workshops that provide specific skills training. These can be offered to both individuals and businesses and can provide additional revenue.
• Sale of Training Materials or Resources: If your RTO develops its own training materials or resources, these could potentially be sold to other organisations or learners.

Remember, your primary goal as an RTO is to provide quality training and assessment that meets the needs of your learners and the industry. While exploring these revenue streams, it’s crucial to maintain this focus to ensure your RTO’s long-term success.

Alternatives to Starting an RTO

While starting an RTO may be an attractive option for some, it’s important to consider alternative pathways that can still provide opportunities in the Vocational Education and Training (VET) space.

It’s important to thoroughly research and understand the requirements and implications of these alternatives. Each option comes with its own considerations, such as contractual agreements, legal obligations, and alignment with the VET regulatory framework. Consulting with industry professionals or relevant organisations can provide valuable insights and guidance on the best alternative pathway for your specific goals and circumstances.

Here are a few alternatives to starting your own RTO:

1. Partnerships with Existing RTOs

Instead of starting from scratch, you can explore collaborations or partnerships with established RTOs. This allows you to leverage their resources, expertise, and infrastructure while delivering your specialised training programs under their registration.

2. Subcontracting

Subcontracting arrangements involve partnering with an existing RTO to deliver specific training programs on their behalf. This allows you to focus on delivering training without the full administrative and compliance responsibilities of being an independent RTO.

3. Course Accreditation

If you have expertise in a specific field, you can consider seeking course accreditation instead of establishing an RTO. Course accreditation allows you to develop and deliver a single accredited course without the need for full RTO registration.

4. Consultancy and Training Services

Another option is to provide consultancy and training services within your area of expertise. You can offer customised training solutions, workforce development programs, or consultancy services to businesses and organisations without the need for RTO registration.

5. Employment in Existing RTOs

If you are passionate about vocational education and training but not keen on the administrative responsibilities of running an RTO, you can explore employment opportunities within existing RTOs. This allows you to contribute to the sector while working in a supportive and established organisation.

Final Thoughts

Starting an RTO involves numerous steps, investment, and continuous commitment to quality and compliance. But the opportunity to create a real impact makes it all worth it. With this guide, you’re now equipped to embark on your RTO journey.

Starting an RTO is an exciting opportunity to shape Australia’s future workforce. With the proper research and planning, you will be able to embark on this rewarding journey in no time. Get ready to make a positive impact and empower learners in the vocational training landscape.

Deliver Your Skills Training Without Compromise

How Cloud Assess Supports RTOs in Addressing ASQA’s Risk Priorities

What is assessment validation and why do you need it, asqa performance assessment: understanding the rto audit process.

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RTO Business Plan

What does this your business plan include.

Six sections

• Executive Summary (4) pages
• Operations (5 pages)
• Market Research and analysis (up to 8 pages)
• Human Resources (4 pages)
• Assumptions
• Sales / Revenue Forecast, 1 year
• Profit & Loss Statement by month, 1 year
• Balance Sheet by month, 1 year
• Break Even, Cash Flow Forecast by month, 1 year
• Marketing Strategy and Top Line Budget (5 pages)
• Appendices (9 pages)

Also includes: (up to another 8 pages depending on number of products and services)

• Profit & Loss Statement by month, 3 years
• Balance Sheet by month, 3 years
• Break Even, Cash Flow Forecast by month, 3 years
• Alternative “What if” Scenario Modelling
• A 45-60 minute chat after you get your first of the two versions we will provide included in our fee

We are often asked to research, write, format and produce Business Plans for RTOs (Registered Training Organisations).

Whether your business is going to deliver Vocational Education and Training (VET), a language college, or you just want to help people learn, you will need in many cases registrations, and a compliant business to seek and achieve Australian Skills Quality Authority (ASQA) and meet the components of the VET Quality Framework. All of these and more are in our Business Plans for Registered Training Organisations.

How do I start my own RTO business?

This sector is intensely competitive and can be very lucrative. Our expertise here is in making sure that your RTO Business Plan is up to the standard of the ASQA, and ticks all of their boxes. In the event it does not, we will revisit and help you until you can get compliant.

The key things to think about which your business plan will help you with our: financial viability, assessing your organisation systems and processes, making sure that your ownership of the business is clear and you can provide evidence of your fitness to run such a business, ensure before you apply that you have all registrations, licences, certifications, insurance is…. For all locations where the business will be.

How to Start a Registered Training Organisation (RTO) Business

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What is the total number of pages in this plan, do you have a business plan example or a plan sample.

We do – because we’ve written dozens of them. Click here or see our Additional resources for sample Plan and more help for you.

What is the cost of a RTO Business Plan?

Why is your business plan lower priced and has more pages in it than others.

We specialise in Business Plans in the RTO sector, so our team can work quickly because it has all the expected costs and expenses, ATO benchmarks, customer demand data and other info ready to analyse and put into your Plan. We subscribe to market research, so it’s provided to us in the right format for your local areas/market conditions for your Plan.

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RTO Business Plan

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One of the key components for initial application to become an RTO is a comprehensive RTO business plan. It allows the governing body to really get a feel for your proposed business. It will also aid in gaining finance should your require. It should outline the Who, What, Where, When, How and Why of your proposed business.

Some people may suggest they can have their business plan complete in a few days, in all honesty it can weeks, even months to get it right. Heres a few things to following:

• Do your research  – You will need to make quite a few decisions about your business including structure, marketing strategies and finances before you can complete your plan. By having the right information on hand you can also be more accurate in your forecasts and analysis.
• Determine who the plan is for  – Does it have more than one purpose? Will it be used internally or will third parties be involved? Deciding the purpose of the plan can help you target your answers. Remember you are developing an RTO Business Plan, not only for yourself and your bank, but also as a key component for initial application. Your Business Plan will be risk assessed by the governing body, so make sure it is quite comprehensive.
• Do not attempt to complete your business plan from start to finish  – First decide which sections are relevant for your business and set aside the sections that don’t apply. You can always go back to the other sections later.
• Get some help  – If you are not confident in completing the plan yourself, you can enlist the help of your support group; friends, family, accountant and business advisors such as ourselves. However, in essence you are the one that knows your business best.
• Actual vs. expected figures  – Existing businesses can include actual figures in the plan, but if your business is just starting out and you are using expected figures for turnover and finances you will need to clearly show that these are expected figures or estimates.
• Write your summary last  – Use as few words as possible. You want to get to the point but not overlook important facts. This is also your opportunity to sell yourself. But don’t overdo it.
• Review. Review. Review  – Your business plan is there to make a good impression. Errors will only detract from your professional image so ask a number of impartial people to proofread your final plan.

What to include in a business plan? A business plan provides direction, keeping you on track and is usually a requirement when you seek finance. Depending on your business type, your plan could include the following sections:

• Title page  – This describes what the plan is for and includes general information on your business.
• Business Summary  – A one-page overview written after your business plan is finalised.
• About your business  – This is typically called the management plan or operations plan. It covers details about your business including structure, registrations, location and premises, staff, and products/services.
• About your market  – This is the marketing plan. It should outline your marketing analysis of the industry you are entering, your customers and your competitors. This section should also cover your key marketing targets and your strategies for delivering on these targets. Dont forget a SWOT! Stengths, weaknesses, Opportunities & Threats. A SWOT shows you have really considered your market and you have done your research.
• About your future  – This section covers your plans for the future and can include a vision statement, business goals and key business milestones.
• Supporting documentation  – List all of your attachments under this heading in your plan for referral. For example:financial tables.

When you have finished your business plan

• Review it regularly . Business planning is an ongoing business activity. As your business changes many of the strategies in your plan will need to evolve to ensure you business is still heading in the right direction. Having your plan up to date can keep you focused on where you are heading and ensure you are ready when you need it again.  Remember a Business Plan is a live document so it really does require to be reviewed at a minimum every 12 months.
• Distribute your plan . A business plan is a blueprint for how your business will run and reveals what future direction your business will take. Understandably you will want to be careful who you show your plan to and avoid your competition seeing it.

Contact us to email you out a Business Plan template in word format to start the process.

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RTO and RPO: Making It Simple

RTO and RPO are two of the most important concepts in business continuity and IT disaster recovery. Today’s post will explain what they are, why they matter, and how to use them, illustrating their use with straightforward examples.

Related on MHA Consulting :  All About RTOs: What They Are and Why You Have To Get Them Right

Two Critical Concepts

The concepts of recovery time objective (RTO) and recovery point objective (RPO) are critical in developing a solid business continuity management (BCM) and IT disaster recovery (IT/DR) program. Let’s define them:

Recovery time objective (RTO)

Relates to business processes and their supporting applications. The maximum length of time that a business process and its associated applications can be unavailable following a disruption in order to prevent an unacceptable amount of impact.

Example: If a company’s RTO for its online customer sales process is four hours, it means that the organization must recover and resume its online storefront within four hours of a disruption.

Recovery point objective (RPO)

Relates to technical processes. The RPO for a given process is the amount of data from it, as measured in time, that can be recreated manually following its restoration after an outage.

Example: If a company has an RPO of one hour for its customer database, it means that after a disruption, the organization can only afford to lose up to one hour’s worth of data, and the recovery process must restore the data to a state that is no more than one hour old from the time of the disruption.

Both RTO and RPO are essential components of an organization’s business continuity and disaster recovery planning. They help determine the necessary strategies, resources, and technologies required to ensure the continuity of critical business functions and minimize the impact of disruptions.

The organization determines the RTOs of its key business processes and their supporting applications through an analysis of its needs. It determines the RPOs of its key technical processes through an analysis of its capabilities. (See below for a more in-depth discussion of how RTOs and RPOs are determined.)

Any gaps between the RTO and RPOs relating to an essential business process must be addressed by business continuity plans and strategies.

The Long and Short of It

A process can have a short RTO and a long RPO or vice versa. Alternately both the RTO and RPO can be short or long.

The following examples illustrate these possibilities:

Accounting: Long RTO, short RPO. In most organizations, general ledger (GL) accounting is a business process with a fairly long RTO, typically several days. This is because, if the accounting process is disrupted, it is usually a matter of quite a few days before the outage has a serious impact. However, the RPO of the technical and data side of the accounting function is very short.It might be four hours, but it could be as short as zero. This is because it’s virtually impossible to recreate accounting data after the fact.

Public-facing website: Short RTO, long RPO. This is your typical Company.com website providing basic information to the public. These typically have a short RTO because if the site goes dark it can immediately attract negative attention and undermine the company’s reputation. However, the RPO for the site is generally fairly long—e.g., 24 hours or more—because the information on such sites tends to be relatively static and any updates that are lost can recreated fairly easily.

Storefront website: Short RTO, short RPO. The company site that takes orders, tracks stock, and so on. This function has a short RTO because when such a site goes down, a meaningful impact on the company’s revenues and reputation can begin almost immediately. The function has a short RPO because the information in the system changes quickly and there’s no way to recreate it if lost.

Policy and standards oversight: Long RTO, long RPO. This process is important over the long-term, but an outage of a few days is unlikely to have a serious impact on the organization. Hence the long RTO. And while policies and standards do change from time to time, the rate of updating is generally slow and losses of data of up 24 hours could most likely be recreated with little difficulty. This means the technical and data processes pertaining to this area will have a long RPO.

RTOs and RPOs in Practice

The RTO for a given business process and its supporting applications is arrived at through an analysis of the company’s overall operations and prioritization by staff. The question to ask in determining an RTO is, how long can the process be down before the impact on the company becomes unacceptable?

The RPO for a given application is determined by identifying how much data from the application the staff could manually recreate. As mentioned previously, this is measured in terms of time (e.g., up to two hours’ worth, up to eight hours’ worth, and so on).

Manually recovering the data means recreating it by various methods such as reproducing it from memory, locating it in other applications or in hard copy, or contacting customers and asking them to resubmit their orders.

Knowing the RTOs and RPOs for the processes and technologies used across your organization helps you understand how you need to protect both processing and technology needs. Knowing these metrics helps ensure that your strategies, implementation, and plans are neither overly aggressive (wasting resources) or inadequate (providing insufficient protection).

Devising Your Categories

Every organization must devise its own scale of RTO and RPO categories. It is best to limit the number of categories to around five or six. More can be a maintenance nightmare.

The following is a scale of RTOs that we have seen work well for many organizations:

And here is a scale of RPOs that many organizations have used successfully:

Once a company devises its categories, each of the its key business processes are analyzed and placed into an RTO category and an RPO category. These designations guide the subsequent development of the company’s recovery plans and strategies.

Determining RTOs and RPOs

How does a company go about determining the RTO and RPO categories for its processes and applications?

The BCM office should develop proposed categories for RTOs and RPOs based on the organization’s known risks and needs. In doing this, the IT team can be a good place to start. The BCM team should make note of the times IT uses for its current protection and recovery strategies. Using those values, the BCM office can make adjustments based on discussions with management to understand the general times departments would need to be recovered.

After the categories are defined, the organization should perform a Business Impact Analysis . Making the best choices depends on factoring in information and insights commonly held across many different levels within the organization.

The final decisions regarding RTOs and RPOs should emerge after the BIA. Once defined, those proposals should be submitted to upper management for review.

Throughout this process, the BCM office has the job of educating others, facilitating the discussion, seeking consensus, and obtaining the necessary approvals.

Every organization should review its RTOs and RPOs on a regular basis. This is because organizations and the environment change. A company that has outgrown its recovery plan has no recovery plan. It is critical that RTOs and RPOs be kept up to date.

Program Cornerstones

RTOs indicate how soon after a disruption a given business process and its supporting applications must be restored to prevent an unacceptable impact to the organization. RPOs are a metric of how much data from a given technical process, as measured in time, can be manually recovered in the event of an outage.

RTOs and RPOs for key processes and technologies are typically determined through a collaborative process led by the BCM team and calling on the judgment and expertise of people from across the organization. Once determined, the two types of objectives become cornerstones of the organization’s business continuity and IT/DR program.

Further Reading

For more information on RTOs and RPOs and other hot topics in BC and IT/disaster recovery, check out these recent posts from MHA Consulting and BCMMETRICS:

• About Time: Deciding When to Start Your RTO Countdown
• After the BIA: Save Time and Money by Fine-Tuning Your Application RTOs
• All About RTOs: What They Are and Why You Have To Get Them Right
• Navigating Resilience: How to Create a BCM Roadmap
• All About BIAs: A Guide to MHA Consulting’s Best BIA Resources

Richard Long

Richard Long is one of MHA’s practice team leaders for Technology and Disaster Recovery related engagements. He has been responsible for the successful execution of MHA business continuity and disaster recovery engagements in industries such as Energy & Utilities, Government Services, Healthcare, Insurance, Risk Management, Travel & Entertainment, Consumer Products, and Education. Prior to joining MHA, Richard held Senior IT Director positions at PetSmart (NASDAQ: PETM) and Avnet, Inc. (NYSE: AVT) and has been a senior leader across all disciplines of IT. He has successfully led international and domestic disaster recovery, technology assessment, crisis management and risk mitigation engagements.

Getting the Most Out of Your BCM Consultant: Do’s and Don’ts

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What is Recovery Time Objective (RTO)?

Grasping the Technique: The Often Misconstrued 'RTO' Unravelled in the Sphere of Business Resiliency

At the heart of organisational durability and a tactical roadmap directing towards reestablishing regular operations post-disruptions, lies the often misrepresented 'Recovery Time Objective' (RTO). This guide aims to deconstruct and demystify the RTO. Let's dive into the nuances of RTO and comprehend its significance.

Fundamentally, RTO operates as a benchmark, indicating the admissible duration of a business halt post a major disturbance before it starts to severely impact the corporation. In the present landscape, RTO serves as a time-centric protective measure, meticulously designed to resume business operations after an occurrence that might prevent operational continuity.

This Python scheme elucidates the strategic rationale behind the calculation of RTO in practical instances. The function calculate_RTO determines the RTO by deducting the period of disturbance from the revival span.

To optimise our comprehension of RTO, we can refer to a sample table:

This chart indicates potential business operations and their corresponding RTOs. For example, if the fortitude of email correspondence is compromised, the organisation deems an interruption of a maximum of 4 hours as bearable, beyond which the damages may intensify.

Understanding RTO is crucial for companies as it helps in creating recovery strategies post-interruptions wisely. This knowledge allows them to plan their preventive actions tactfully, centred on the prominence of various business operations.

Salient points regarding RTO include:

• RTO symbolises the maximum stretch acceptable for a business operation to recommence after a catastrophe.
• It guides companies in structuring and skillfully directing their resurgence initiatives post disruptions.
• RTO varies across different operations, its metrics being directly linked with the importance of the respective operation.

In closing, Recovery Time Objective (RTO) plays a prominent part in ensuring business resilience and forming recuperation plans following a detrimental event. It paves the path for recovery, thus validating the blueprint for corporate actions and helping in cushioning potentially harmful impacts of a mishap. A profound apprehension and vigorous RTO approach can mark the unseen difference between an insignificant snag and a significant organisational disruption.

Unwrapping RTO: A Quintessential Component of Disaster Counteraction

In the context of managing crises and sustaining commercial equilibrium, it's imperative to highlight the notion of Recovery Time Objective (RTO). At first, it may seem overwhelming, but an intricate exploration reveals it as a simple, yet crucial cog in a strong disaster counteraction scheme.

The Recovery Time Objective (RTO) essentially refers to the estimated period taken by a standard business function to recommence after an unforeseen disruption, thereby evading any potential negative implications associated with operational hiatus. It signifies the time needed to restore regularity, or something parallel to it, subsequent to the occurrence of an unforeseen incident.

Breaking down the definition:

Estimated Period : This term pertains to the utmost time duration you're comfortable with for your application to be offline, typically mirroring your capacity for dormant periods.

Standard Business Function : This pertains to any routine operation executed by your enterprise, spanning from conducting transactions to report generation.

Recommence : This refers to the process needing not merely to be operational but more so ready to carry out its assigned tasks.

Unforeseen Disruption : This covers any event, natural or human-induced, responsible for interfering with your business operations.

Potential Negative Implications : This indicates the possible harmful effect the disruption can inflict on your business, ranging from profit demise to reputation damage.

Interpreting the RTO is indispensable for businesses as it elucidates the utmost acceptable downtime for a system before it inflicts substantial damage to the business. Moreover, it aids in formulating a disaster recovery scheme that's realizable and effective.

Take into account this example:

In this Python code sample, a business activity faces an impediment. The compute_RTO function compares the impediment duration with the acceptable inactive period (RTO). If the inactive period exceeds the RTO, a disaster counteraction outline turns obligatory.

The essence of RTO varies between businesses and their operational aspects. For instance, an online retail platform might have a short RTO for its payment gateway as any disruption has immediate ramifications on sales and customer satisfaction. On the contrary, the same platform might opt for a longer RTO for its data gathering function, as it bears no direct impact on customer interactions.

In encapsulation, the Recovery Time Objective (RTO) plays a pivotal part in disaster counteraction planning. It endows businesses with the capacity to specify the maximum acceptable inactive period for any operation and devise an apt recovery strategy. The correct understanding and incorporation of RTO could mark the difference between a minor operational interruption and a substantial business disruption.

Synopsis: Grasping the Complexities of Recovery Time Objective (RTO) - Comprehensively Elucidated

Amid the domain of operational dependability and catastrophe mitigation, the Recovery Time Objective (RTO) serves as an indispensable measure. It acts akin to the rhythmic throbbing of your contingency plan, a driving force that fuels your enterprise even when circumstances are unfavorable. Yet, what constitutes RTO? What's its process, and why is its relevance so crucial? Now is the time to untangle this persisting enigma.

RTO, when defined in basic terms, is the anticipated span within which a company's processes should be reinstated post an upheaval or encumbrance for sidestepping repercussions jeopardizing continual business functionality. It represents the chronometric device that begins instance tracking from the minute a mishap transpires, aiming for the juncture when your infrastructure needs to be functional once more.

The Python sample code above sketches a straightforward IncidentBounceBack class. The revival_period method computes the deadline for completing recovery, relying on the disruption moment and the RTO.

RTO isn't a universal solution but differs based on corporate specifics, and even amidst different processes in a single enterprise. As an example, an online merchant could place high priority on their website with a minimal RTO, but allocate more time to their email framework.

The table above exemplifies diverse RTOs across distinct company procedures. The web-based marketplace, being the chief income source, has the minimal RTO. The electronic mail system, though significant, can withstand extended downtime. The personnel management system, less critical, holds the maximum RTO.

RTO is derived based on the duration of tolerable data loss, denoted as the Recovery Point Objective (RPO) . Should your RPO be 4 hours, your RTO must ideally fall short of that.

RTO calculation requires consideration of several variables:

• The prominence of the commercial procedure
• The tolerable outage
• Expense linked to outages
• Resources needed for revival

To conclude, appreciating RTO is essential for any enterprise. It serves as a critical lifeline, keeping your business buoyant in a crisis scenario. RTO acts as the constant reminder of how much time you have to restore your systems to functionality. Comprehending RTO isn't limited to its definition, but extends to recognizing its significance and determining how to calculate it specifically for your business model.

Understanding Recovery Time Bound (RTB): Vital Signs of Business Resilience

Picture the vast realm of institutional resilience and crisis control as an incessant chronometer. One essential figure that emerges in this context is the Recovery Time Bound (RTB) - a meter akin to the heartbeat of your business breath, setting the pace of recovery. It outlines the interval between an unplanned disruption to your business and the required revival of operations to mitigate harmful impacts. Simply put, it signifies the maximum dormancy span an establishment can tolerate.

To fully apprehend the concept of RTB is akin to being aware of your organization's pulse rate. It mirrors the health status of your establishment during a crisis scenario. A lower RTB implies a brisker pace of recovery for your business. But, how is this essential metric determined? Let's delve into it.

Pinpointing Principal Business Functions

The initial stride towards establishing your RTB is pinpointing the primary functions of your business. These encompass the tasks, which if disturbed, could cause considerable harm to your organization's effectiveness. For instance, if you operate a digital retail business, your central functions could include website operations, revenue generation, and product delivery mechanisms.

Evaluating the Consequences of Inactivity

Once you've identified the core operations, the ensuing stride is to determine the possible outcomes of inactivity affecting these tasks. This entails calculating the financial impact your organization might face if these functions cease to operate. This projected loss could encompass lost sales opportunities, penalties from contract violation, and a drop in repeat clientele.

Assigning the RTB

With the calculated risk of inactivity, it's time to designate your RTB. This indicates the longest duration you can allow your key operations to remain inactive. Hereunto, striking a balance between the disruption cost and recovery cost is pivotal. A shorter RTB demands considerable resources towards a robust recovery plan.

The Python code snippet above is a basic method to determine RTB. It helps weigh the financial effects of dormancy against recovery expense and recommends the lesser value.

Consider how the RTB can vary for two imagined companies:

Company Alpha can endure 2 hours of website downtime, while Company Beta can only allow a 1-hour delay in its dispatch process.

In conclusion, time never stops ticking in business resilience context. Gaining a thorough understanding of your RTB is imperative in ensuring your business promptly regains equilibrium after disruption. Reduced RTB means a faster recovery expectation which might call for substantial recovery plan investment. Hence, regulating this sensitive balance is necessary.

Disentangling the Principles of Industry Perpetuity: The Masonry Role of RTO

The labyrinth of industry perpetuity manifests a plethora of salient components, among those the Recovery Time Objective (RTO) assumes a keystone role, predominantly within the realm of catastrophe countermeasure planning. This exploration intends to delve deeper into the nuanced applications and relevance of RTO, shedding light on its vital role in maintaining unbroken business trajectories.

Before proceeding, a revisit to the RTO definition is expedient. At its nucleus, RTO denotes the forecasted timeframe needed to revert company operations after any unforeseen interruptions or disasters, without impacting the fluent progression of business. This time span, commonly expressed in hours, minutes, or even seconds, reflects the tolerable downtime permitted for an enterprise's IT landscape.

In the Python snippet above, a hypothetical entity, Firm A, assigns itself a RTO threshold of 240 minutes. This signifies, after the dust of any disaster has settled, Firm A strategizes to bring back its crucial operations within the 240-minute timeline to elude extensive losses.

Moving forward, a comprehensive understanding of RTO's eminent standing within the context of industry perpetuity follows:

Manifests Quantifiable Goals : RTO provides a lucid, measureable recovery goal for technical rescue teams to strive towards.

Shapes the Blueprint of Disaster Countermeasures : A key player in sketching and executing an effective disaster recovery plan, RTO assists to pinpoint the necessary resources, manpower, and procedures needed to meet the desired recovery schedule.

Assists in Hazard Evaluation : By identifying an RTO, corporations can estimate potential monetary ramifications of downtime, and make educated decisions regarding investments into efficient disaster countermeasures.

Automates Recovery Hierarchy : Not all systems carry the same degree of impact. Some are more critical to the business flow than others. Hence, RTO aids in arranging recovery efforts based on the importance of various systems.

Reinforces Regulatory Adherence : For institutions functioning within regulated industry brackets, meeting the outlined RTOs can often be a critical aspect of regulatory fulfillment.

In a nutshell, the Recovery Time Objective (RTO) emerges as an agile parameter in the construct of industry perpetuity. It outlines the recovery timeframe, navigates the planning for disaster countermeasures, assists in hazard evaluation, orchestrates recovery focus, and facilitates regulatory conformance. Comprehension and adept manipulation of RTO can significantly improve a corporation's resilience against interruptions and disasters.

Operational Flow: Decoding the Effect of RTO

Delving into the sectors of business sustainability and catastrophe recovery, a key player that often comes into the spotlight is the Recovery Time Objective (RTO). This salient measure lends a helping hand to corporations in preserving efficient workflows, even in the wake of unanticipated setbacks. So, what embodies RTO, and how does it abet the unhindered performance of an enterprise? Let's explore this notion further.

The Recovery Time Objective (RTO) stands tall as a vital gauge that captures the maximum permissible time lapse that a business operation or app can afford post a calamity or disturbance. In layman's terms, it marks the time bracket within which a business needs to revive its functionalities to ward off the unwelcome outcomes ensuing from a rupture in business consistency.

To shed light on the function of RTO, envision a scenario. Imagine you are at the helm of an e-commerce venture. A sudden glitch results in your website going offline due to a server meltdown. Here, RTO translates to the maximum downtime your website can tolerate before it begins to heavily dent your business - say, a couple of hours. If your RTO is a couple of hours, your contingency recovery plans should aspire to reactivate your website within this window.

RTO doesn't come in a universal size that fits all. It gravitates from one enterprise to another, or even amidst diverse processes within a single entity. For instance, the RTO assigned to a high-priority process like real-time transaction handling could be much more stringent than that allotted to a less critical task like email marketing.

Grappling with the role of RTO in business continuity entails perceiving its bearings on two principal sectors: expense and peril.

Expense: The more stringent the RTO, the less the downtime an enterprise endures, culminating in minimized potential revenue leakage. However, striving for a condensed RTO often calls for sturdier (and pricier) catastrophe recovery mechanisms. Hence, enterprises need to weigh the cost incurred during downtime and the expense of revival.

Peril: An elongated RTO could signify an escalated risk of forfeiting business to rivals, tarnishing the brand's image, or even grappling with legal implications in certain instances. Thus, carving out the RTO involves gauging the quantum of risk an enterprise is prepared to shoulder.

To cap it off, the Recovery Time Objective (RTO) serves as a quintessential yardstick in chalking out business continuity strategies. It aids businesses in ascertaining their capacity for withstanding downtime, empowering them to map their catastrophe recovery protocols proficiently. By grasping the implications of RTO, businesses can vouch for unimpeded workflows, curtailing the ramifications of setbacks on their profits and stature.

Coordinating The Bounce-Back: Expounding The Significance of RTO

In the realm of corporate resilience and response to unforeseen incidents, Time to Recover (RTO) forms a cornerstone. This component that shapes a certain period during which an interrupted business function must regain normalcy to fend off unacceptable aftermaths. So, what gives RTO such considerable gravity? Let's delve into the core of this crucial component.

• Mitigating Repercussions on Functional Streams

RTO's primary goal is to curtail the impact a disturbance can place on business functions. The longer a functional stream stays inactive, the more sizeable the prospective damages. By tactically setting a feasible RTO, enterprises can equip themselves to resume action swiftly, mitigating both operative and financial fallouts.

In the Python code above, the tentative loss is computed based on the downtime and per-hour earnings. If the downtime exceeds the RTO, the projected loss could be substantial.

• Guiding Recovery Method Choices

RTO is more than just a numeral indicator; it is a strategic guide. It helps companies in choosing their recovery path. For instance, a company with a low RTO might need to set aside finances for rapid recovery methods, like high-availability options. In contrast, a company with a high RTO could cope with slower, yet more budget-friendly recovery solutions.

• Distribution of Resources Based On Priority

All business functions are not created equal, with some bearing more significance than others. By delineating RTOs for different functions, organizations can competently manage resource distribution during the recovery phase. Functions with the lowest RTOs are viewed as most crucial and hence, take precedence during recovery initiatives.

The Python code above visualizes the concept of ranking business functions according to their respective RTOs. The tasks with the shortest RTOs take priority.

• Complying With Regulatory Standards

In certain sectors, specific regulatory bodies necessitate that businesses abide by certain RTO guidelines for particular functions. By developing and sticking to these RTOs, companies can ensure they are in regulatory compliance.

• Building Trust Among Stakeholders

Finally, well-defined RTOs can aid in fostering confidence among stakeholders, including customers, employees, and investors. It is a reassurance that the business is prepared for disruptions and has a quick recovery plan in place, thereby mitigating potential adversarial impacts on stakeholders.

In summary, the Time to Recover (RTO) is a vital element of any corporate resilience and disaster recovery plan. It serves to lessen operational consequences, direct recovery methods, aid in the distribution of resources, assure regulatory compliance, and enhance stakeholder trust. Hence, it is essential for businesses to understand the importance of RTO and proficiently integrate it into their recovery plans.

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What Are Recovery Time Objectives (RTO) Best Practices?  

• October 19, 2023

Daniel Naftchi

Co-founder & CTO

Maximizing Business Resilience With RTO and RPO: A Guide to Best Practices

The recovery time objective and recovery point objective are crucial elements for cybersecurity.

With similar-sounding acronyms, both are significantly different.

The Recovery Time Objective concerns the downtime your business can tolerate after an incident or a disaster. Recovery Point Objective, however, talks about how much data your business can afford to lose before any harm occurs.  

According to the latest research by ITIC, the hourly cost of downtime has exceeded $300,000 for about 91% of SMEs and large enterprises. All in all, about 44% of respondents reported that even one hour of downtime could cost them more than $1 million .

If you are still wondering what RTO and its importance are, keep reading.

What is the Recovery Time Objective, and Why is it important?

The Recovery Time Objective (RTO) is focused on the time frame within which an organization can resume its normal operations after a disaster.

Per the definition by the Computer Security Resource Center , The overall length of time an information system’s components can be in the recovery phase before negatively impacting the organization’s mission or mission/business processes.

One of the significant goals of RTO is to determine the time duration required for a recovery process to come into action after a major incident and for businesses to resume their normal operations.

So now that you know what RTO is and its goals, let’s delve into its importance.  

T he Recovery Time Objective is critical for various reasons, including:

• Reducing downtime
• Financial losses mitigation
•  Customer trust maintenance
• Meeting the regulatory requirements
• Safeguarding reputation and managing risk

Operational continuity, resource allocation, effective planning, and training and improvement are some of the critical features of RTO.

The recovery time objective is important as it offers a measurable and practical framework for your organization to both plan for and respond to disruptions effectively. RTO contributes to your business’ resiliency and continuity.

Why is RTO Important in Business Continuity?

Recovery Time Objective (RTO) is a critical concept in a business continuity plan.

RTO is the maximum time your business can afford to survive without certain functions or systems after a disruptive event like a cyberattack, hardware failure, or a natural disaster. The recovery point objective is a significant metric used to determine how quickly your business can bounce back and resume its operations to avoid any negative consequences.

Let’s understand the relationship between recovery time objective and business continuity.

Defining Recovery Goals:

RTO is your guide that helps in establishing recovery goals within your business continuity plan.

RTO will help your business set specific targets. These targets will help you decide how quickly you will need to restore your critical functions and systems to minimize disruptions.

Influencing Resource Allocation:

During the planning phase, the recovery time objective influences resource allocation and helps your organization in prioritizing the systems/processes, which have to recover first and accordingly allocate the resources. The shorter the recovery time objectives, the higher the priority and more resource allocation.

Risk Assessment:

The recovery time objective is based on the potential risks and impacts your business faces.

It typically considers financial losses, customer dissatisfaction, regulatory compliance, and reputation damage as some of the critical factors. By assessing these risks, organizations can tailor their business continuity strategies more effectively.

Technology and Infrastructure Planning:

The recovery time objective considerations affect technology and infrastructure decisions. Businesses may invest in redundant systems, backup data centers, or cloud services to meet their recovery time objective requirements. These investments aim to ensure that critical operations can be quickly restored in the event of a disruption.

Testing and Training:

Recovery Time Objective plays a crucial role in the testing and training phases of a business continuity plan. Organizations can meet their RTO targets with regular testing. Staff must be trained to execute recovery procedures effectively within the specified time frames.

Continuous Improvement:

Business Continuity Plans have to be reviewed and updated periodically to reflect technology, operations, and risk changes. Recovery Time Objective may be adjusted as part of this process to align with evolving business needs and objectives.

Compliance and Reporting:

For some industries, the regulatory requirements mandate certain recovery time objectives for specific critical data or functions.

It is essential to meet those compliance or else there could be legal implications.

Recovery time objective is a crucial component of a business continuity plan as it helps your business to determine how quickly you need to recover after a disruption happens. A well-defined recovery time objective is essential for minimizing downtime, mitigating financial losses, and maintaining customer trust during and after a crisis.

Understanding the Roles of RTO and RPO in Disaster Recovery

The two critical metrics in disaster recovery planning are RTO and RPO. 

These metrics help your organization to define and measure the preparedness and ability of your business to recover from different disaster types like natural disasters, hardware failures and cyberattacks, or any other disruptive events.

Let’s Understand What Role RTO Plays in Disaster Recovery.

• It prioritizes recovery efforts. 
• It sets clear expectations. 
• It allocates resources per their requirements. 

Role of RPO in Disaster Recovery:

• It protects data during a disaster.
• It helps in risk management. 
• Application recovery and synchronization is another critical role of RPO.

RTO and RPO are fundamental concepts in disaster recovery planning.

While RTO focuses on downtime, RPO focuses on data loss.

RTO and RPO are interconnected and must align with your organization’s overall business continuity strategy. They are critical for creating a disaster recovery plan that meets business needs while managing the associated risks and costs effectively.

Key Differences Between RTO and RPO

Rto best practices for your business.

Recovery Time Objective’s best practices ensure that you optimize risk tolerance – a critical aspect of risk management and ensure that your operations run smoothly despite a disaster.

Risk Tolerance Assessment with Stakeholders:

• Engage your organization’s key stakeholders like executives, department heads, and IT personnel.  
• Identify and evaluate the risk tolerance levels your business can accept. The step involves understanding how much downtime and data loss your business will be able to tolerate before negative consequences take over.

Realistic Service-Level Agreements (SLAs):

• SLAs are agreements defining the level of expectations in services and performances across the different departments of your organization or your organization and your service providers.
• SLAs should be clear while specifying recovery time objectives (RTO) and recovery point objectives (RPO). While RTO is the maximum allowable downtime, RPO is the maximum data loss allowed.

Rank Your Applications into Tiers Per Their Importance 

• Categorize your applications and data into tiers as per their importance and criticality.
• Tier 1 can include mission-critical applications that need the shortest RTO and RPO.
• Tier 2 can encompass important but not mission-critical applications.
• Tier 3 can include less critical systems.

Existing Backup and DR Technology Effectiveness Assessment:

• Regularly evaluate your current backup and disaster recovery (DR) solutions to understand how well they are meeting your business needs.
• Assess your existing technology for performance, reliability, and scalability.         

Modern Backup and Recovery Technologies:  

• Keep yourself updated on the current advancements in backup and recovery technologies.
• Explore the capabilities of these technologies to improve RTO and RPO and improve data protection while reducing operational risks.

Exercising Due Diligence:

• Conduct thorough due diligence before you implement new backup and recovery technologies or when you outsource these services.
• You must evaluate all the potential vendors or service providers for their track records, security measures, and compliance with industry standards.
• You must ensure the solution you choose aligns with your risk tolerance and SLAs. 

These are some of the best practices that can help you optimize your recovery time objective strategies, minimize downtime, and safeguard your business against data loss and operational disruptions.

Final Words

Understanding and optimizing your Recovery Time Objectives (RTO) and Recovery Point Objectives (RPO) are pivotal for business continuity.

However, in our increasingly digital landscape, the resilience of your Identity and Access Management (IAM) systems is just as vital. Given that IAM is often the backbone of modern enterprises, its failure can be catastrophic, affecting both operational efficiency and cybersecurity. Particularly in cloud-based IAM systems like Okta, the shared responsibility model puts the onus on organizations to safeguard their data and configurations.

Here’s where Acsense can make a difference.

As your trusted partner for enterprise IAM resilience, we offer targeted, automated backup and recovery solutions that align with your RTO and RPO goals. With features like one-click recovery and continuous data verification, acsense enables you to tackle vulnerabilities, be they human errors or cyber threats like ransomware and insider risks.

Don’t leave your IAM resilience to chance.

Book a call with the Acsense team to schedule a demo and learn how RTO and RPO are equally important for your IAM systems and infrastructure to keep its operations up and running during an emergency.

• What is a reasonable recovery time objective? The reasonable recovery time objective is the maximum acceptable time that an application, computer, network, or system can be down after an unexpected disaster, failure, or comparable event takes place.
• What is the best recovery point objective? The best Recovery Point Objective is when it is set to frequently update the files, implying the recovery point is no longer than a few minutes. In short, zero is the ideal recovery point objective.
• What are RTO and RPO requirements? RTO and RPO requirements are the specific values or targets established by an organization to define the maximum acceptable downtime and data loss in the event of a disaster, system failure, or disruption. These requirements are crucial components of disaster recovery and business continuity planning and are tailored to the needs and priorities of the organization.
• What is the RPO industry standard? RPO has no single industry standard that applies universally to all organizations. RPO requirements vary broadly based on factors like business nature, regulatory requirements, data sensitivity, and the technology infrastructure in place. What is an acceptable RPO for your organization may not be adequate for others.

—–

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Strategic, Business and Action plans in your RTO strategy

“Plans are of little importance, but planning is essential” – Sir Winston Churchill

Business and strategic planning for our RTO are important tools.

In the world of RTOs we are asked to create a plan to show our intended direction. The word “Plan” generally construes a mental image of a map: start here…finish here. Simple, right? But it’s not, is it? We’d all be in a very different place right now, if it were.

How do we start RTO strategy plans

Planning is never set in stone, it is a guide. An RTO strategy plan for the business is just the same. An example is when I have a plan to audit an RTO, I turn up with my note book, Standards and iPad at the ready. I have planned for success by providing information up front before I attend. However it soon becomes apparent that an internal audit is not actually what the RTO needs. Instead it could be a validation session, or a mentoring session, or a simple action plan, a guidance tool. So planning really needs to be fluid.

A business plan serves its purpose in the big picture, but an action plan is important for the soldiers who are needing guidance on what they need to do. Each has value to often different people.

Sometimes what RTOs actual need is a written action plan or a continuous improvement register that serves that same purpose. By putting a plan in writing, it allows any people to collaborate, resolve any underlying cross currents and prepare for a solidified front to face the future.

Assume the plan is a work in progress.

Whatever you work with, a business plan, strategic plan or an action plan they are not a set-and-forget instrument. They are to be included in your continuous improvement. Treat them as a living and breathing document that guides decision making and helps with creation of resources. Visit the plan regularly to review and update the document due to changed conditions and consolidation on completed tasked that were scheduled as part of the execution process. Make your agenda item “progress against the plan”.

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Business Continuity Plan (BCP)

Your disaster recovery plan should be a subset of your organization’s business continuity plan (BCP), it should not be a standalone document. There is no point in maintaining aggressive disaster recovery targets for restoring a workload if that workload’s business objectives cannot be achieved because of the disaster’s impact on elements of your business other than your workload. For example an earthquake might prevent you from transporting products purchased on your eCommerce application – even if effective DR keeps your workload functioning, your BCP needs to accommodate transportation needs. Your DR strategy should be based on business requirements, priorities, and context.

Business impact analysis and risk assessment

A business impact analysis should quantify the business impact of a disruption to your workloads. It should identify the impact on internal and external customers of not being able to use your workloads and the effect that has on your business. The analysis should help to determine how quickly the workload needs to be made available and how much data loss can be tolerated. However, it is important to note that recovery objectives should not be made in isolation; the probability of disruption and cost of recovery are key factors that help to inform the business value of providing disaster recovery for a workload.

Business impact may be time dependent. You may want to consider factoring this in to your disaster recovery planning. For example, disruption to your payroll system is likely to have a very high impact to the business just before everyone gets paid, but it may have a low impact just after everyone has already been paid.

A risk assessment of the type of disaster and geographical impact along with an overview of the technical implementation of your workload will determine the probability of disruption occurring for each type of disaster.

For highly critical workloads, you might consider deploying infrastructure across multiple Regions with data replication and continuous backups in place to minimize business impact. For less critical workloads, a valid strategy may be not to have any disaster recovery in place at all. And for some disaster scenarios, it is also valid not to have any disaster recovery strategy in place as an informed decision based on a low probability of the disaster occurring. Remember that Availability Zones within an AWS Region are already designed with meaningful distance between them, and careful planning of location, such that most common disasters should only impact one zone and not the others. Therefore, a multi-AZ architecture within an AWS Region may already meet much of your risk mitigation needs.

The cost of the disaster recovery options should be evaluated to ensure that the disaster recovery strategy provides the correct level of business value considering the business impact and risk.

With all of this information, you can document the threat, risk, impact and cost of different disaster scenarios and the associated recovery options. This information should be used to determine your recovery objectives for each of your workloads.

Recovery objectives (RTO and RPO)

When creating a Disaster Recovery (DR) strategy, organizations most commonly plan for the Recovery Time Objective (RTO) and Recovery Point Objective (RPO).

Figure 3 - Recovery objectives

Recovery Time Objective (RTO) is the maximum acceptable delay between the interruption of service and restoration of service. This objective determines what is considered an acceptable time window when service is unavailable and is defined by the organization.

There are broadly four DR strategies discussed in this paper: backup and restore, pilot light, warm standby, and multi-site active/active (see Disaster Recovery Options in the Cloud ). In the following diagram, the business has determined their maximum permissible RTO as well as the limit of what they can spend on their service restoration strategy. Given the business’ objectives, the DR strategies Pilot Light or Warm Standby will satisfy both the RTO and the cost criteria.

Figure 4 - Recovery time objective

Recovery Point Objective (RPO) is the maximum acceptable amount of time since the last data recovery point. This objective determines what is considered an acceptable loss of data between the last recovery point and the interruption of service and is defined by the organization.

In the following diagram, the business has determined their maximum permissible RPO as well as the limit of what they can spend on their data recovery strategy. Of the four DR strategies, either Pilot Light or Warm Standby DR strategy meet both criteria for RPO and cost.

Figure 5 - Recovery point objective

If the cost of the recovery strategy is higher than the cost of the failure or loss, the recovery option should not be put in place unless there is a secondary driver such as regulatory requirements. Consider recovery strategies of varying cost when making this assessment.

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Return to Work Plan For 2023 [TEMPLATE INCLUDED]

Returning to the office in 2023? Ensure a smooth return with these guidelines and best practices.

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A return to work (RTO) plan is a document employers create to ensure the safe and smooth return of employees, both physically and emotionally. This includes outlining processes, requirements, restrictions, and necessary communication. 

ResumeBuilder.com surveyed employers on their RTO plans and found that 90% will require employees to return to the office in 2023. In this blog, we’ll share what to consider before creating your return to work plan and how to successfully make the transition. 

Should you make employees return?

The first question you might be asking is if you should mandate a return to the office in the first place. There are pros and cons to bringing employees back to the office, and it’s important to be aware of them so you can determine if the decision is right for your business. Perhaps the biggest benefit of employees returning to the office is the opportunity for in-person collaboration. In many ways, being together in an office is more conducive to productive teamwork and bonding than hopping on a Zoom call. 

Eric Mochancz , Director of Operations at Red Clover , explains the positive impact of returning to the office: 

“We have always felt that some of the best learning does occur when we’re together and can engage in impromptu conversations that happen throughout the day.” 

But you should remember that a return to work plan might not be well-received by your employees. Many employees may have become used to the perks of working from home and will be reluctant to give it up. In fact, Buffer’s 2022 State of Remote Work report found that 97% of employees would like to work remotely, at least some of the time, for the rest of their careers. What’s more, 86% want either fully remote or remote-first work environments. 

Forcing employees to return to the workplace could lead to feelings of resentment and disengagement, and you may see rates of absenteeism and turnover increase as a result. Many businesses have chosen to implement a hybrid policy that allows employees to work remotely a few days per week to prevent dissatisfaction. 

Shirley Borg, Head of Human Resources at Energy Casino , shares the approach her business took to RTO: 

“We recognized that many employees had grown accustomed to working from home during the pandemic and desired the flexibility that remote work provides. To balance this desire with our need to maintain a collaborative and productive work environment, we created a hybrid model that allows employees to work from home a certain number of days each week, while also requiring them to be in the office for certain meetings and collaborative projects.”

What happens if an employee tests positive for COVID?

Your return to work plan should include guidelines for what an employee should do if they test positive for COVID-19. This will ease employees’ concerns about returning to the office and highlight your commitment to employee health and safety. 

According to the latest CDC guidelines, individuals who test positive should stay home for at least five days and isolate from others. This is when they are most infectious and likely to spread the virus. Below are the current recommendations for ending isolation: 

• Individuals may end isolation after five days if they had no symptoms or if they are fever-free for 24 hours without the use of fever-reducing medication. 
• If symptoms are not improving after five days, individuals should continue to isolate until they are fever-free for 24 hours without the use of fever-reducing medication and their symptoms are improving. 
• Individuals who had symptoms and moderate illness (they experienced shortness of breath or had difficulty breathing) should isolate through day 10. 
• Individuals who had severe illness (they were hospitalized) or have a weakened immune system should isolate through day 10 and consult their doctor before ending isolation. 
• Regardless of when they end isolation, individuals should avoid close contact with people who are at increased risk to get very sick from COVID-19 and wear a high-quality mask until at least day 11. 
• If COVID-19 symptoms recur or worsen after individuals have ended isolation, they should restart their isolation at day 0. 

Allowing remote work

Choosing whether or not to allow remote work will be one of the most important, if not the most important, decisions you make regarding your return to work plan. Carefully consider the advantages and disadvantages before you determine your approach. 

Benefits of remote work

Like it or not, remote work is quickly becoming the norm. A 2022 Gallup survey found that only two in 10 remote-capable employees were working fully on-site with about the same number expecting to be completely on-site in the future — down from 60% in 2019. Here are four reasons why more businesses are embracing it: 

1. Improved productivity 

Opponents of remote work often claim that employees are less productive at home — but some studies show the opposite. For many employees, a remote environment is more conducive to deep work and allows them to concentrate on their projects without the distractions of the office. 

Owl Lab’s 2022 State of Remote Work report found that 62% of employees feel more productive when working remotely, while only 11% feel less productive. Employees felt remote work was most productive for working independently (69%), thinking creatively (58%), and focusing (54%).

2. Greater employee satisfaction 

Employee satisfaction rates tend to improve when employees have more flexibility to work remotely at least some of the time. The extra cost and time of commuting, increased childcare burden, and lack of flexible scheduling are among the reasons why employee satisfaction might suffer under a strict RTO plan. Slack’s Future Forum Pulse survey investigated how inflexible return to work plans were impacting employee experience scores. It discovered that full-time office workers reported the steepest declines across the eight employee sentiment measures it surveyed:

• 2x as steep a drop in work-life balance compared to flexible (hybrid and remote) employees
• 1.6x as steep a drop in overall satisfaction with their working environment compared to flexible workers 
• 1.5x worsening work-related stress and anxiety compared to remote employees

3. Cost savings for employees

Allowing remote work means that your employees can save more money on the expenses associated with in-office work. Hybrid workers save $19.11 each day they work from home instead of the office, according to Owl Labs. In-office workers spend twice as much as remote workers ($862/month vs. $431/month) with the biggest expenses being their commute ($15 a day on average) and lunch ($13 a day on average). 

4. Reduced employee turnover

Forcing employees to return to the office full-time could spark a wave of resignations. ADP Research Institute found that 64% of the workforce would consider searching for a new job if they were required to return to the office full-time. More than half (52%) would even take a pay cut of up to 11% to guarantee more flexibility. 

Disadvantages of remote work

Of course, there are also downsides to forgoing time in the office. Here are a few potential roadblocks you may run into if you’re considering creating a remote work policy:

1. A lack of in-person collaboration 

As great as working remotely might be for deep work and independent projects, many agree that the office is better for collaboration and teamwork. Owl Labs found that 44% of employees say the office is more productive for collaborating and 43% find it more productive for getting consensus. A good approach might be to provide employees flexibility on when they come into the office so they can structure their week around both deep work and collaborative projects. 

2. Inequities created by proximity bias

For employers that have both in-office and remote employees, there is growing concern around proximity bias, or the idea that leadership may show favoritism toward employees who work alongside them in a physical office. According to Owl Labs, 41% of executives cite the potential for inequities to develop between remote and in-office employees as their number one concern about flexible work.

3. Early-career disadvantages

Employees who are early in their careers might find that remote work doesn’t provide them the same opportunities as in-office work to network and advance in their careers. Glassdoor research of benefits reviews by seniority level revealed that entry-level workers have the lowest work from rating (4.3 out of 5) compared to mid-senior (4.6), director level (4.6), and executive (4.7) roles. 

4. Feelings of social isolation

Company culture is a huge determinant of employee happiness and productivity, but it can be hard to build a strong culture while working remotely. Studies have shown that 67% of workers aged 18-34 have found it harder to make friends and maintain relationships with colleagues. Almost three-quarters (71%) felt their colleagues were more distant, and 54% said that long-term remote work has caused them to drift apart from their colleagues.

Companies with remote employees may need to put more thought into how they can creatively nurture strong relationships despite being physically distributed. For example, companies like Automox and Muck Rack provide stipends that employees can use to grab a virtual coffee or a meal with coworkers so they can create social connections. 

Measuring the impact of your return to work plan

A return to work plan is incomplete without a clear sense of how your company will measure its effectiveness. Tracking certain metrics can help you gauge the success of your plan and assess whether you need to make any changes. 

1. Turnover

One of the most important metrics to keep an eye on is employee turnover. If you notice that turnover increases after employees return to the office, it’s a good indicator that employees are not happy with the change. Of course, other factors could contribute to an increase in turnover. To gain a better understanding of the impact of your RTO plan on turnover, you should examine trends in turnover data over time along with differences in turnover between remote and in-person employees if you have both segments. Exit interviews are also a great source of insight into the reasons for turnover. 

2. Performance and productivity

Measuring performance and productivity can help you understand how a return to the office impacts business continuity. There are several metrics you can use, including performance review scores, self-assessment data, and output. For employees with client-facing roles, you can also track various client success metrics. 

Eric Mochancz says Red Clover measures established engagement metrics to assess productivity toward client work: 

“As a consulting firm that tracks our time, we are able to measure where and how each of us is spending our time. In doing so, we’re able to measure productivity toward client work based on our established engagement metrics. Based on our utilization and realization rates and scheduled client hours, are we meeting those internal metrics? And are they influenced by remote work? We look at the productivity of our members through remote and in-office work and reconfigure and manage expectations if we see any trends in their tracked time.”

3. Employee engagement

Engaged employees are more productive and loyal to your organization. When engagement declines, you’ll likely see other areas such as turnover and performance suffer as well. The best way to isolate whether engagement issues are due to your return to work plan is to conduct an employee engagement survey before returning to the office and again once the transition is complete. When analyzing the results, ask the following questions:

• Are employees more engaged after returning to the office?
• Are employees returning to the office more or less engaged than employees who remain remote? 
• Are there any trends in engagement based on team or business unit?

Chad Brinkle , Owner and Founder of High Country Offroad , regularly surveyed employees as part of his company’s RTO plan:

“To measure the success of our return-to-work plan, we regularly surveyed our team to get feedback on their experiences and identify areas for improvement. We also monitored productivity levels and team collaboration to ensure that our new policies were not negatively impacting our business outcomes.”

4. Absenteeism 

Employees who are not satisfied with your company’s return to the office might be more likely to take unplanned absences from the workplace. Without proper intervention, this could quickly lead to turnover and a massive loss of productivity. Pay attention to absenteeism trends following your return to work plan. 

Example of return to work policy with a free template

A comprehensive return to work policy will help ensure employees understand what's expected of them as your business transitions back to the office. Every company’s reopening plan will look different but below are several areas to consider for a successful return. 

1. Workplace safety measures

Employee safety should be a top priority. Outline the health and safety measures your organization is taking to protect employees, including requirements around personal protective equipment, social distancing practices, and vaccination status. Keep in mind that some local laws may prohibit mandatory vaccination policies. Include the steps employees are expected to take if they tested positive for COVID-19. 

2. Remote work guidelines

Giving employees as much clarity as possible about your remote work policy will help prevent confusion and dissatisfaction. Include guidelines around the number of days a week employees may work from home and expectations around in-office work, along with any details about flexible work schedules or assigned seating. You may also want to consider a phased approach to ease your workforce back. This is where you might want to share the “why” behind your policy and discuss the advantages of reopening offices. 

3. Employee benefits 

Returning to the office means your workforce will have new needs surrounding commuting, childcare, pet care, and more. Providing flexible benefits that help employees cover these expenses is one way to encourage employees to come into the office and support their mental health. ResumeBuilder.com revealed that 88% of employers are creating incentives to get employees to return to the office, including catered meals, commuter accounts, and higher pay. 

A lifestyle spending account is the best option if you want to give employees the most flexibility possible. With this type of post-tax account, you can design a customized program around a set of eligible spending categories. This allows employees to purchase anything within those categories that simplifies their return to the office. 

If you’re considering offering new benefits as part of your RTO plan, it’s smart to benchmark your offerings against companies of your size and industry. Download the Benepass Benefits Benchmarking Guide to explore current trends in employee perks and stipends .

4. Communication methods

Show employees that you care about their feedback by sharing where they can go if they have questions or want to raise concerns as they return to the office. 

Jessica Bane , Director of Business at GoPromotional , explains why it’s important to communicate openly with employees: 

“Open communication would be essential to foster a culture where employees feel comfortable expressing their concerns and opinions. Regular team meetings, town halls, or anonymous feedback mechanisms could help to achieve this.”

To help you get started, we put together the following free template that you can copy and modify.  

Return to work policy:

This document contains terms and conditions for [Company Name]’s return to work policy. Please sign the form and return it to the head of your department to acknowledge you read through the document and understood its contents. 

Employee health and safety 

We will take every precaution to ensure safety as employees return to the office. This includes maintaining a thorough cleaning schedule and ensuring that protocol is followed if an employee reports a positive COVID-19 test. 

If an employee tests positive for COVID-19, they should report it to their manager immediately and begin a period of isolation before returning to work. In accordance with current CDC guidelines:

• Employees should return to the office after five days if they had no symptoms or if they are fever-free for 24 hours without the use of fever-reducing medication.
• Employees who had symptoms and moderate illness (shortness of breath or difficulty breathing) should return after isolating for 10 days. 
• Employees who had severe illness (they were hospitalized) or have a weakened immune system should isolate through day 10 and consult their doctor before ending isolation and returning to the office.

We will not currently require employees to wear masks in the office but ask that employees respect their colleagues’ choices regarding mask use. We reserve the right to revisit this policy in the future. 

Remote work

We are returning to the office to provide more opportunities for connection and collaboration. That said, we understand that employees also enjoy the flexibility of remote work and want to create a work environment that provides the advantages of both in-person and remote work. 

Employees will be expected to be in the office [X] days per week. Employees should consult with their managers to determine which days of the week they will be in the office. If employees have any safety concerns or special accommodation requests concerning physically returning to the office, they should communicate them to their manager. 

While working remotely, employees must continue to adhere to all business policies outlined in the employee handbook regarding conduct, confidentiality, sick leave and PTO, etc. Employees are to be accessible online for 8 hours during the days they work remotely and communicate in a timely manner with their manager, colleagues, and clients. 

We are providing a number of additional employee benefits to make the transition back to the office easier. It’s our hope that these benefits will support your return and alleviate some of the concerns we have heard about returning to the office. 

Commuter stipend: We are providing [dollar amount] per [month/quarter/etc.] to use on daily commuting expenses such as public transportation or parking.

Child and dependent care stipend: We are providing [dollar amount] per [month/quarter/etc.] to use on dependent care expenses such as child or adult daycare, summer day camps, and before- or after-school care. 

Lifestyle spending account: We are providing [dollar amount] per [month/quarter/etc.] to use on a variety of expenses within several pillars, including wellness, mental health, fitness, pet care, house services, personal enrichment, and more. 

Employees will receive separate resources with more information about these benefits and instructions on how to access them. 

Communication

We want to keep the lines of communication open to ensure a smooth return to the office. Along with raising any concerns to their managers, employees should feel free to contact [X] at [email address/phone number] with any questions or feedback. We will also reserve time during our monthly town hall meetings for our leadership team to answer questions about our return to the office. We will give employees the opportunity to share anonymous feedback through regular employee surveys. 

Authorization

I have read, understand, and accept the terms and conditions described in this document. I agree to abide by the expectations and responsibilities discussed within.

Name: _____________________

Signature:  _____________________

Upgrade your return to work plan with Benepass

Benepass helps employers create flexible benefits programs that incentivize employees to return to the office and provide support for many costs associated with hybrid and in-office work. 

Our flexible benefits accounts give your employees more freedom to tailor their benefits to their individual needs and lifestyles. Benepass can help you craft programs that tackle your company’s unique challenges as you return to the office in 2023. 

Learn more about our approach by booking a demo or contacting our sales team at [email protected] . 

Frequently Asked Questions

Annalisa rodriguez.

Annalisa is the Content Marketing Manager at Benepass. She has 9+ years of experience in writing, editing, and content strategy.

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