2007 BCM research shows organisations unlikely to weather the storm

Category Business Continuity Management - BCM - CMI CF Annual Research

Small businesses still not planning and Weather and people based events rise

19 March 2007 Many UK organisations admit they are failing to prepare for disruption, despite recording a dramatic increase in the level of upheaval caused by extreme weather conditions and high levels of people and skills loss. According to research, published today by the Chartered Management Institute, organisations are 'blowing hot and cold' when it comes to business continuity they pay lip service to the importance of planning for disaster, but fail to make business resilience a reality.

Barriers to business The 2007 Business Continuity Management Survey, supported by the Cabinet Office and Continuity Forum, reveals that 1 in 4 organisations (28 per cent) were affected by extreme weather conditions in the 12 months to January 2007, an increase from less than 1 in 10, the previous year. The worst affected areas were Wales, where 21 per cent reported significant disruption, closely followed by Scotland and the South East (both 18 per cent). 1 in 5 managers (20 per cent) also said their organisations productivity had suffered due to a 'loss of skills' over the past year. 17 per cent blamed health and safety incidents for business disruption (up from 13 per cent, last year) and 32 per cent focused on the impact caused by 'loss of people', the highest proportion since the question was first asked, in 2003.

Looking ahead Managers identified traditional areas as most likely to impact on future costs and revenue. IT was cited by 73 per cent, followed by loss of telecommunications (63 per cent) and loss of access to sites (60 per cent). However, reflecting concerns expressed in the recent Leitch Review of Skills, managers highlighted increasing levels of concern over 'loss of people' (57 per cent) and skills (up to 59, from 49 per cent, last year). Jo Causon, director, marketing and corporate affairs, at the Chartered Management Institute, says: “Protecting an organisations infrastructure is, of course, vital to its sustainability. However, technology is nothing without the people who can use it and unless organisations balance the need to safeguard buildings with the need to secure their workforce, any attempt at business continuity management will remain unfinished and inadequate."

Lack of preparation The research, conducted amongst 1,257 public and private sector managers, also uncovered an alarming level of complacency amongst UK employers. Although the majority (73 per cent) believe business continuity is viewed as important by their senior management team, the number whose organisations have a business continuity plan (BCP) covering critical areas is much lower (48 per cent). Amongst medium- and small-sized organisations levels of preparation are lower still (42 and 34 per cent, respectively). Even where BCPs exist, many organisations fail to balance levels of protection with what they perceive are key threats to business. For example, only 35 per cent of BCPs focus on reputation, even though almost half (49 per cent) perceive 'damage to brand' as a major threat. Encouragingly, half of those respondents with a BCP report that they rehearse plans at least once a year. More than 1 in 3 (37 per cent) do nothing with the plans that have been developed and 15 per cent fail to act on the shortcomings they identify. Bruce Mann, director of Civil Contingencies at the Cabinet Office, says: “The report reveals a situation where there is still much work to be done. Events from the Carlisle floods to the London bombings and Buncefield explosion have clearly shown the vast range of impacts that emergencies can have. Yet despite these, there are still too many organisations with insufficient business continuity plans in place."

Coping with disaster In the context of these fears and the continued threat of a flu pandemic, managers were asked if their employer had plans in place to cater for excessive staff loss, due to illness. Encouragingly, 54 per cent of organisations have plans in place for a flu pandemic, but organisations are still failing to fully consider the impact of additional parent-worker absences - a factor demonstrated recently when almost 1,000 schools were forced to close because of snow*. The research found that 67 per cent of respondents suggest that increased levels of absences would result from school childcare closures during a pandemic, but only 19 per cent suggest their organisations plan is sufficient to cope. The research also makes it clear that organisations are failing to make adequate provision for immediate business continuity. Despite many fearing the impact of loss of access to their site, only half (53 per cent) said their organisation is ready for remote working "to a great extent"even though nearly two-thirds (64 per cent) have access to alternative work sites. 61 per cent also report that their organisations outsource facilities or services, but only 22 per cent demand business continuity management (BCM) from all business critical suppliers. Where BCPs are sought, almost half (48 per cent) admit they are satisfied with a statement from the supplier, one-third (34 per cent) will examine the BCP, but only 17 per cent are involved in the development of supplier BCPs. John Sharp, policy and development director at the Continuity Forum, says: “Successful business continuity planning is a two-way process. Organisations need to demonstrate their commitment to BCM to key stakeholders internally and externally, but at the same time should encourage suppliers to do the same. Failure to do so will lead to major business disruption as inadequate plans are exposed at the time they are needed most."