Monday, 14 January 2013

Big picture – long picture: the value of horizon scanning

Lee Glendon CBCI
Big picture – long picture1: the value of horizon scanning
How can you ensure that your BCM programme and resources are allocated in a way proportionate to the current and potential threats that the company is and will be facing?
That’s a real question one of our members faced last year from her senior management team.  While some folk will be frustrated at the threat-oriented starting point of the question, it is not an uncommon one as many practitioners will confirm.   While ‘risk assessment through threat evaluation’ may provide some assistance with the question posed above, horizon scanning potentially provides a framework to build out the situational picture.  It also provides an opportunity for a proactive stance by practitioners.

What is horizon scanning? 

Well, Lyndon Bird FBCI presented the following definition at last year’s Executive Forum when this topic was discussed, drawing on the thoughts of the Consultative Committee of Sector Councils for Research:
Horizon scanning is defined as the systematic examination of potential threats, opportunities and likely future developments, including (but not restricted to) those at the margins of current thinking and planning.  Horizon Scanning may explore novel and unexpected issues as well as persistent problems and threats.
The Horizon Scan 2013 Survey report took a two-layered horizon scanning approach.  The first layer drew on members’ in-house ‘risk assessment through threat evaluation’ for the 12-month period ahead, while the outer horizon focused on analysis of trends and uncertainties; collectively this was termed horizon scanning.  The objective of this approach was to look at how the identified trends might be driving near term disruption and therefore reveal the underlying cause of the problem.
The survey confirmed that most organizations in which BCI members work perform longer-term trend analysis (77%) whether centralised within a function such as strategy and risk or decentralised according to departmental need.   One of the challenges identified in the survey is that 21% of business continuity practitioners in organizations that perform trend analysis did not have access to the information.  29% are actively involved in the analysis, while 48% use the inputs in their programme.  Using the information to inform exercise scenarios and future capability development were two of the areas suggested in the survey.  Only 3% of overall survey respondents did not see the value of trend analysis information in their business continuity activities.
The results of this year’s survey can be used to confirm or update existing thinking around the threat horizon; they can also be used as entry points into discussions across organizations to raise the relevance of business continuity.  For example, risk factors are provided in annual filings for public companies – here are three from one company’s 20F form:
  • System disruptions and failures may result in customer dissatisfaction, customer loss of both, which could materially and adversely affect our reputation and business
  • Our international operations expose us to risks associated with fluctuations in foreign currency exchange rates that could adversely affect our business
  • Political and economic conditions in the Middle East and other countries may adversely affect our business
Interestingly, there is little comment on what plans are in place to deal with these risk factors should they materialise.  Perhaps someone should ask and ensure that business continuity is part of the solution!
We want to research horizon scanning concepts and methods a little further as a result of the survey.  Our aim is to provide guidance on making horizon scanning a key component of a proactive business continuity programme, so that senior management does not need to ask the question posed at the beginning of this post, rather we have taken the initiative to paint the picture for them. 
 Lee Glendon, Head of Research and Advocacy at the BCI
Note1: for a good starting point on horizon scanning visit

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