BCM Advice for beginners cont'd

Why organizations need business continuity planning

The speed with which modern business is transacted means that a disruption of only a few hours can have a catastrophic impact on the profitability and reputation of the affected organization.

Although this will have an immediate and adverse impact, it can also damage the long term viability of the organization as well.

Types of disaster

It is important to bear in mind that it is not only a catastrophic disaster that can adversely impact your organization; even the most minor occurrence can have a potentially costly effect. These include:

· Serious information security incidents - this covers events such as: cyber crime, loss of records or data, accidental or deliberate disclosure of sensitive information, and IT system failure. According to a recent DTI survey the average cost of an organization’s most serious security incident is £10,000, but for larger organizations this was more likely to be £120,000;

· Equipment or system failure - includes: internal power failure, air conditioning unit failure, production line failure, cooling plant failure, equipment (excluding IT hardware) failure;

· Loss of utilities and services - electrical power failure, loss of gas supply, loss of water supply, fuel shortage, communication services failure and loss of drainage/waste removal;

· Organized and/or deliberate disruption - acts of terrorism and sabotage, act of war, arson, theft and labor disputes/industrial action;

· Environmental disasters - tornado, hurricane, flood, snowstorm, drought, epidemics, earthquake, electrical storms, fire, subsidence, landslide, freezing conditions, contamination and environmental hazards.

Organizations particularly at risk

Although, as mentioned previously, all sizes and types of organization can be adversely impacted by an unplanned event, there are some that through the nature of their business or regulatory compliance are particularly at risk.

These include in the UK:

· Companies regulated by the FSA - the FSA requests companies to ensure that they can continue to function and meet regulatory obligations in the event of an unforeseen interruption.

· Publicly listed companies - who need to implement the findings of the Turnbull report on internal risk management measures.

· Local government and NHS Trusts - the Civil Contingencies Act imposes new duties on all councils to develop a proper structure to deal with emergency planning within their area.

Barriers to business continuity planning

To the uninitiated, business continuity planning can appear a costly and complex process that seems to have little or no immediate business benefit.

This is because it is easier to do nothing and hope that an unplanned event does not happen. The very nature of business continuity management involves the entire organization at many levels and furthermore drives to the heart of the operation by asking uncomfortable questions about what is and is not important in a time of crisis. The need to understand all of the critical business processes that take place and how the breakdown of these will impact the organization overall is vital, and will involve many different people at different levels, but without this there can be no plan.

It is important that the motives for business continuity management are clearly defined at the outset as this will help prevent confusion later in the project. These can range from being a public listed company that needs to implement the findings of the Turnbull report, through to a governmental body that has gained a new area of responsibility with the Civil Contingencies Act In many organizations this process will need to be undertaken voluntarily, but for some government regulation or industry requirements will drive the development of the plan. Either way it will be necessary to gain senior management support and sponsorship, else the entire process will fail.

Impact of a disaster

Although the immediate impact of an unplanned event will be apparent in lost revenue and the inability to deliver critical services, it is not these that cause so many organizations to ultimately fail.

It is the on-going impact that this interruption of business brings about that provides the ultimate ‘knock-out’ blow for many organizations. These include:

· Loss of reputation and brand loyalty
· Customers may start to seek out alternative suppliers
· Supply chain partners will also look at alternatives
· Funding may disappear
· A need may be re-evaluated and deemed unnecessary.

An organization which fails to provide a minimum level of service to its customers following an unplanned event may not have a business to recover.

MORE >>>

If you would like to know more about how your organisation can get involved and benefit from working with the Continuity Forum, please email us HERE! or call on + 44 (0) 208 993 1599.

___________________________