Scenario Planning What Happens When Your Black Box Fails on Payroll Day

Published on: Thu Jun 20 2024 by Ivar Strand

Scenario Planning: What Happens When Your Black Box Fails on Payroll Day?

Most technology auditing and testing is rightly focused on verifying correct functionality. We invest considerable effort in confirming that our financial systems work as intended. A less frequently asked, but equally critical, question is: what is the plan for when they do not?

Actively planning for and testing an organization’s response to critical system failure is a vital discipline of technology governance. It is the difference between a theoretical continuity plan and a demonstrable state of operational resilience.

Beyond Disaster Recovery: Testing Business Continuity

It is important to distinguish between IT Disaster Recovery (DR) and operational Business Continuity Planning (BCP).

Disaster Recovery is a technical discipline focused on restoring data and infrastructure from backups after an outage. Business Continuity, however, is an operational discipline focused on maintaining critical business functions during a disruption. Having a data backup is not the same as having a tested, viable method for making payroll when your primary HR and payment system is offline.

A Framework for a Scenario Planning Exercise

The most effective way to test business continuity is through a structured, tabletop scenario planning exercise. This “war game” moves the BCP from a document in a binder to a practical test of your team’s preparedness. At Abyrint, our resilience advisory work includes facilitating these exercises.

Step 1. Define a Specific, High-Impact Scenario. The scenario must be concrete and plausible. For example: “It is Tuesday morning, 48 hours before the monthly payroll must be executed for our 500 staff members across three countries. Our cloud-based financial platform has suffered a total outage due to a vendor-side issue. The vendor has communicated that they cannot provide an estimated time for restoration. What are our immediate actions?”

Step 2. Assemble the Cross-Functional Team. This is not an IT-only exercise. The participants in the room must include the heads of Finance, HR, and Operations, as well as the relevant IT system administrators. The designated “business process owners” are the most critical participants.

Step 3. Facilitate a Sequence of Practical Inquiries. The exercise facilitator’s role is to guide the team through the operational realities of the failure, focusing on what needs to be done now. Key questions for the payroll scenario include:

• Data Access: Where is the definitive, up-to-date payroll register (names, salaries, bank details) stored if the primary system is inaccessible? Is this backup available and current?
• Calculation: What is our approved, manual or alternative process for calculating net pay and all relevant deductions for each employee?
• Execution Authority: How do we generate payments outside of the main system? Who has the authority and the technical access (e.g., login credentials for the corporate banking portal) to execute a bulk payment file? Is there a documented procedure for this?
• Communication: What is our communications plan for staff and for senior management? Who is responsible for drafting and sending these communications?

Step 4. Document Gaps and Assign Action Items. The primary output of the exercise is not a score, but a list of identified gaps, flawed assumptions, and single points of failure. Each identified gap (e.g., “The only list of current bank details is in the offline system”) must be converted into a clear action item with a designated owner and a deadline for resolution.

From Theoretical to Practical Resilience

This exercise makes resilience tangible. It moves business continuity from a theoretical concept to a practiced capability. Trusting the “black box” of a financial system is a modern necessity, but true organizational resilience is demonstrated by knowing precisely what to do when that box fails.

Donors and stakeholders can have much greater confidence in partners who not only maintain robust systems but have also proven their ability to maintain critical controls and deliver on their commitments, even in the face of significant technological disruption.