Business Continuity Planning Case Cash Collections Process Case Description Jans Medicino is the owner of a mid-sized medical services company, Health Nuts. Jans has delegated almost all of the decision-making authority for his company to you. However, after he heard about a competitor whose business was nearly destroyed by a malicious hacker, he approached you with a concern about a business continuity plan for the cash collections process. Specifically, he would like to ensure that the company would be able to generate adequate cash collections to maintain the business in the event a malicious hacker was to disrupt the current collections process. Currently, Health Nuts does not have a business continuity plan for such a disruption. Your task is to propose such a plan. Background All of Health Nuts' revenues are collected from insurance companies that issue policies to Health Nuts' customers (patients). Currently, Health Nuts' employees (e.g. doctors and nurses) manually enter claims into an accounting information system, which automatically submits claims to the respective insurance provider through an online extranet portal. Exhibit A provides a numerical breakdown of the forecasted revenue for 2020, ordered by magnitude expected from each insurance company: Exhibit A: 2020 Forecasted Revenue by Insurance Company Insurance Company Annual Revenue % of Annual Revenue 1. United Healthcare $17,000,000 63.0% 2. Anthem 5 3,300,000 12.2% 3. Aetna 5 2,500,000 9.3% 4. Cigna 5 2,300,000 8.5% 5. Humana 5 1,200,000 4.4% 6. (Five) Other Providers 5 700,000 2.6% Total from Insurance Providers $27,000,000 100.0% Based on the timing of cash collections and cash outflow needs, Health Nuts relies on cash collections from insurance companies to fund $1,500,000 of its working capital. That is, Health Nuts cannot afford to collect less than $1,500,000 in cash from insurance companies in any given month. In addition, Jans Medicino does not like returns of less than 20% on any cash collected from insurance companies (including that which is used for working capital). Risk Assessment Your risk assessment team has determined that the likelihood ofa malicious attack such as that which incapacitated your competitor is 4% per year. However, after performing a business impact analysis, your team has determined that such a malicious attack would essentially render the automated billing system completely unusable until it is restored. The team estimates that it would take 90 days to restore the accounting system without any additional plan in place. Business Continuity Plan Options After performing several analyses, your business process engineering team has offered several response alternatives. Each alternative is listed in Exhibit B