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Muhammad Ghazali MBCI |
IN A COUNTRY like Kuwait which has oil production as the backbone of its
economy, even a temporary disruption in production can have serious consequences
for the economy. That’s where Business Continuity Management (BCM), a fast
developing management discipline, becomes extremely crucial. Muhammad Ghazali,
Associate Director, Head of BCM Services, Protiviti Member Firm (Middle East
Region), in this interview, talks about BCM and its applications and advantages
in Kuwait’s business environment. He says that with increasing complexity of
businesses, BCM will become an inevitable entity in any business firm or
organization.
Question: What is Business Continuity Management (BCM)?
Answer: Business Continuity Management is a management domain that
focuses on development of strategies, plans and capabilities that provide
protection or alternative modes of operation for those activities or business
processes which, if they were to be interrupted, might bring about a serious
business or potentially fatal loss to an organization.
An increasing number
of organizations and their Executive Management are recognizing the importance
of the Business Continuity Planning, Resiliency and Crisis Management as part of
Enterprise Risk Management program. Many governmental agencies and all
regulators around the world have recognized and incorporated Business Continuity
and Crisis Management Planning into their requirements. Investors, as well as
Boards of Directors, are increasingly interested in management’s capability to
continue critical operations through a disruption and their plans to ensure a
resilient enterprise.
Q: What do you mean by: “… critical operations through a
disruption…” please explain?
A: Critical operations are those
activities which facilitate the organization to deliver its key product and
services. The critical activities should be delivered to clients even when its
primary method or mode of delivery is affected due to any disastrous event. For
example, for an internet service provider, it is critical for them to provide
internet access to its customer, at an acceptable level, even when its primary
method or mode is disrupted.
Q: Does BCM cover even financial crisis? If yes, could effective
BCM have averted crises like the subprime mortgage crisis in the US and the more
recent Eurozone debt crises etc.? Explain how?
A: BCM preparedness
does not directly cover financial crisis. Subprime mortgage and Eurozone debt
crises are effectively covered by Financial Risk Management initiatives such as
Credit and Market Risk management. BCM focuses on developing resiliency to those
activities that are ‘time’ critical and required to be ‘available’ all the time.
However, BCM does assist Financial Risk Management in an indirect manner by
developing resiliency or fail-over options to time critical activities that come
under Financial Risk Management processes, thereby indirectly protects an
organization from financial losses.
Q: Which sector in Kuwait do you think is in most need of BCM?
Logically organizations that contain the most risk, like oil companies etc,
should have the greatest need for BCM, isn’t it?
A: Absolutely
correct. As Kuwait Economy is largely driven by Oil and Gas sector, BCM assumes
larger importance at the national level. However, Business Continuity
preparedness is equally important for other sectors as well. In today’s world,
how far can we afford to be without a telephone connection or Internet? In
modern e-Government environment, where every single national and resident is
connected, can we tolerate the downtime of e-Government services? In a
technology driven banking business operation, how long can we tolerate the ATMs
to be down and not working? In our modern lifestyle where electrical utilities
and gadgets become inevitable, how far can we go without electrical power?
Therefore, in my opinion, BCM is needed in every sector that has time-critical
processes and activities.
Q: What systems are currently in place in the various companies
of Kuwait for Crisis Management? As these companies have been functioning well
so far, don’t you think the existing system is fine? Then, what is the need for
BCM?
A: Crisis Management is an important element of BCM. In my
personal view, the BCM and the Crisis Management disciplines are catching up
progressively in Kuwait. Though BCM preparedness and capabilities are
established within an organization, they operate in isolation and at times
limited to the technological recovery only. BCM, like any other management
function, requires equal attention and recognition. BCM activities should be
integrated with all other business processes. For example, at the time of
acquiring or upgrading an application system, an assessment should be carried
out to identify all threats which may cause interruptions to the system or to
any of the business process being supported by the system. This type of
integration can only be achieved by implementing a Business Continuity
Management framework within an organization.
Q: How vast is the paradigm of Business Continuity for
organizations today?
A: In a highly competitive and dynamic business
environment, it is important for every organization to remain ‘available’ and
serve customers virtually every minute. Take an example of the banking sector.
Few years ago, banking business was limited to business hours only. But now with
the advent of Mobile Banking Apps in addition Internet Banking and ATMs, the
banking operation needs to be available 24 hours in a day. Likewise every
organization is expected be available all the time to retain and serve their
customers. If they are not available for some reason or other, they may run the
risk of losing their market share and migration of customer base to competitors
providing better availability. Therefore, any organization that has time
critical operation will have to embrace BCM discipline to be available for the
customers.
Q: Give an example as to how BCM can prevent events like the
recent fire in a popular warehouse in Kuwait. Take us through it in a step by
step fashion.
A: Excellent question. A well-structured BCM function
can prevent such incidents and more importantly, it can contain damages and
financial losses. BCM involves a number of work procedures. As an important
initial step, BCM identifies critical business processes and availability risks
challenging those critical processes. Based on the risk assessment, control
measures are established to prevent such incidents and to reduce damages arising
out of such incidents. In the specific case referred, the concerned organization
had BCM plans in place which assisted them in containing the damages and
resuming the business operation within the acceptable downtime period.
Q: How does a BCM structure fit into an organization? Will there
be a separate BCM team or will the employees be trained to handle it?
A: As of any management function, BCM has both strategic and
operational sets of activities to be performed on a continuous basis. While the
organizational fitment will have to be specific based on its nature of business,
it is ideal for organizations to assign the responsibility of establishing and
maintaining the BCM strategies and plans to a dedicated corporate-level entity.
Good practices recommend formation of a number of committees and a
cross-functional recovery teams to work as needed. BCM training is absolutely
required for both dedicated BCM strategy unit and operational teams, and the
training program should be provided periodically.
Q: How is business continuity different today than it was a
decade ago?
A: A decade ago, the initial paradigm was much focused
on Technology recovery and was popularly referred to as ‘IT Disaster Recovery
Planning’. However, organizations slowly recognized that BCM will have to
equally focus on elements such as people, process, premises, records and
suppliers. Hence, the concept of a cross-functional Management System for
Business Continuity started evolving and are maturing over the period of time.
Leading organization don’t consider the BCM program relating only to the
Technological recovery.
Q: What are the international best
practices available for Business Continuity? And how feasible is it to apply all
of them in the Kuwait market?
A: Fortunately, there are a number of
best practices available as of today. There is an ISO Standard for Business
Continuity Management System popularly referred to as ISO 22301:2012. Besides,
there is a ‘Good Practice Guidelines’ released by The Business Continuity
Institute (BCI), UK. Besides, there are a number of other Standards for Data
Centre, ICT Readiness, etc. These Standards and Guidelines are equally useful
for the organization operating in Kuwait and provide an adaptable model to
structure the BCM function as per the organizational requirement and Kuwait
specific requirements.
Q: What is the role of leadership in the implementation of Business
Continuity Management?
A: Organizational leaders play an important
role in establishing, managing and operating the Business Continuity Management
function. They provide strategic direction to the function by reviewing and
approving BCM strategies and plans. They also allocate required resources and
investments in developing the required capabilities and arrangements. More
importantly, they are responsible for analyzing and declaring emergency
situations, and accordingly advising business recovery teams to continue
business operations from the alternative workspace. They conduct periodical
reviews over the operating effectiveness of the BCM strategies and plans with an
aim to improve its preparedness and effectiveness. Protiviti Member Firm for the
Middle East (Protiviti) considers the role of the leaders in the BCM program as
crucial for the success of the BCM program. The ISO Standard (ISO 22301:2012)
also mandates their involvement as a major requirement to qualify for
certification and compliance.
Q: In your opinion, how can corporates in Kuwait establish and
implement effective BCM Program?
A: Leading organizations have
already established and are effectively practicing BCM programs. However, the
level of implementation with the rest of the organizations in Kuwait is not very
encouraging. Many of them are under a false assumption that they will not be
impacted by any contingent event and even if any contingent event strikes them,
they tend to believe that they can respond back to it on a reactive manner.
Therefore, they consider any investment in the BCM capabilities may not yield
the required returns to them. However, the fact is quite opposite. Available
statistics prove that marginal investment in resiliency and fail-over
capabilities insure them from major damages, financial losses, regulatory
non-compliance and reputational risks. Protiviti encourages organization in
Kuwait to take the first effective step - determine the organizational
availability requirements and assess the availability risks. Protiviti believes
this initial first step will enable them to understand their risk exposure and
accordingly take a cost-effective continuity measure. It is not necessary that
risk mitigation activities may not be prohibitively expensive. There are many
international best practices such as ISO 22031:2012 Standard and BCI’s Good
Practices Guidelines that provide a comprehensive framework to take effective
measures.
Q: Being the official leader of Business Continuity Institute Kuwait
Forum what are the plans during the year 2013?
A: The BCI Kuwait
forum was the first country forum from the Middle East that participated in the
‘Global Business Continuity Awareness Week’ in 2012. The BCI Kuwait forum plans
to participate in Global Business Continuity Awareness Week 2013 that is
scheduled in March 2013. During this week, the BCI Kuwait forum will conduct a
full day conference in Kuwait inviting local, regional and international
speakers to share their valuable experiences and their knowledge. Besides, there
will be quarterly knowledge-sharing events for the BCM professionals to share
case studies through general awareness workshops to the existing and potentials
members of the BCI in Kuwait.
Q: What are the qualifications a person should have to join the
forum? How is the training offered, and examination held? Is a BCM certification
a lifelong one, or do graduates have to take retests to keep the
degree?
A: Any professional can join The BCI Kuwait Forum by signing
a simple Membership Form. The BCI Licensed Trainings are offered in the Middle
East through licensed training partners. Any professional can attend these
training programs and appear for a Certification Examination, if desired. On
successfully passing the examination, they can earn the credentials of CBCI
(Certified by The Business Continuity Institute). Due to emerging nature of the
domain, the certified professionals are required to appear for retest after
three years to retain their credentials. The main objective of the retest is to
enable the professionals to continue their professional education.