Can you afford not to embrace next generation business continuity

Kathleen Lucey

Montague Risk Management

 

The bleeding edge of our profession is now resiliency – not recovery, not continuity. But the most interesting part of this is the analysis of events as they occur: calculating the effects of these events and responding in new and different ways.

 

Coupled with detailed current information and analytics engines to help us to understand the impact of events on our markets, our competitors, and our operations, we are now beginning not just to respond faster and better, but to position ourselves to be able to manage improbable, adverse events – sometimes called 'black swans' – to our advantage. We are able to generate additional revenues and/or open new markets for existing products, rather than just minimizing event damages.

 

I don’t know about you, but I would like to move to the side of the organization that deals with revenue enhancement – marketing and new product development – and move away from compliance. There is more funding there to get the job done right!

Kathleen will be discussing this and the issue of resilience within the 'Thought Leadership' stream at the BCM World Conference on Thursday 7th November, starting at 10:35.

Building resilience in the provision of critical national infrastructure with ISO 22301

David Clarke
Telefónica UK

At Telefónica UK we are proud to be one of the first UK businesses to achieve the international ISO 22301 accreditation for business continuity management. We’ve always worked hard to ensure that all parts of our business are robust. Our business continuity provisions were accredited under the former British standard BS 25999, so the transition to ISO 22301 was a natural one for us.

Our COO and business continuity champion on the Board, Derek McManus, summed it up nicely when he said: “Achieving ISO 22301 accreditation demonstrates our commitment to providing a reliable, high quality service to our customers. It shows that we have the resources, investment and processes in place to protect ourselves from potential service disruption – minimising the impact on our customers.”

The acid test

Last year, in the run up to the Olympic Games, we got an opportunity that most businesses don’t – the chance to put our business continuity plans to the test.

We undertook a number of activities, and one of the most high profile involved asking 2,500 of our employees to work away from our Slough Head Office for one day. The goal was to try out our technology, our network and the way we work – for real, on a working day.

I’m glad to say that we passed the test. Everyone was able to do their normal work – with no impact on our customers.

The ISO 22301 accreditation and the results of our flexible working day both demonstrate that we really do understand business readiness and continuity, and that our customers can rely on us when the unexpected occurs.

David will be discussing this and the issue of standards within the 'Supply Chain Continuity' stream at the BCM World Conference on Thursday 7th November, starting at 13:05.

Implementing BCM through complexity

Thomas Puschnik
Zurich Financial Services

Leading a BCM framework in a complex and challenging operating environment is no easy task but one potential key to success is effective relationship management. There are at least two key components to achieving this.

First is in terms of the BCM workforce. Having a team identity or common purpose, a set of agreed goals and clear roles and responsibilities all help to form the basis of a good team. Going from 'good' to 'great' requires a focus and commitment to building strong trusted relationships and recognising there will be setbacks along the way. This requires strong leadership and the will to take time out to listen and get to know team members and to understand their needs and concerns. This is especially true in regions where languages and cultures differ significantly.

Second is in terms of establishing regular engagement with your key business partners. Knowing who your key stakeholders are i.e. those who have or should have a vested interest in BCM, is relatively straightforward but the challenge often comes in determining how best to engage with these people. Selling BCM as a shared goal and using different levers to do this is fundamental. It is important to answer the question "what’s in it for me?" so that both parties understand the benefits for freeing up time and budget to support the activities within the framework.

Building an effective BCM team and support network is a critical success factor for any BCM implementation - one cannot deliver without the other!

Thomas will be discussing this and the issue of rolling out a global BC programme within the 'BC in Action' stream at the BCM World Conference on Wednesday 6th November, starting at 11:15.

The return on investment of a BCM programme

Rainer Hübert
HiSolutions AG

When will the investment for a BCM programme pay off? Most people think that the only correct answer is when a damage scenario has taken place. Hopefully then an effective BCM programme will reduce an otherwise much more costly, or even possibly fatal financial impact to a bearable amount. Then, and only then, will the investment in BCM be paid off – just like insurance policy.

In our finance driven business world however, investment in BCM needs to be justified in financial terms, unless a BCM programme is forced upon an organization by its clients or by regulatory authorities.

While the cost of a BCM programme is widely known, many people will have no idea what the returns will be. During my presentation at the BCM World Conference, I will discuss what I believe are four sources of return for those investments that go some way to justifying a BCM programme.

Insurance premiums and interest rates are the most obvious candidates; however they are the least effective ones. One can reduce the business disruption insurance premium by reducing the time coverage of the business disruption pay out. At banks, it is possible to negotiate the interest rates with by providing additional information about a reduced credit default risk due to a working BCM programme.

More potential for a return of investment however stems from the lowering of process costs by improving process efficiency. When discussing contingency procedures and measures, the way the business operates is more closely scrutinised and so the opportunity is provided to generate ideas as to where efficiencies and savings can be made. These ideas may find their way into day to day operations of a company with the potential to improve the effectiveness or efficiency of business processes across the board.

The largest effect however will actually come from the new ISO 22301 standard. This standard will become instrumental to comply with purchase regulations of clients, especially the larger ones. More often than not, contingency planning will become a requirement of critical suppliers. In future, one may lose existing contracts or fail to win new tenders without a certified BCM programme. BCM will be fundamental to winning or sustaining these contracts.

BCM leaders often struggle with justification for investment in a BCM programme in general or individual BCM measures in particular. Especially when discussing with economists or business administrators, those working in the BC industry are regularly confronted with standard business case approaches to justify BCM, which require a detailed explanation of the return on investment. My talk offers a way to meet this demand and outlines in more detail an approach on how to calculate and demonstrate a return on investment of a BCM programme.

Rainer will be discussing this and the issue of measurement within the 'BC in Action' stream at the BCM World Conference on Wednesday 6th November, starting at 13:30.

Supply Chain Vulnerability: Resilience versus Interdependence

David Hawkins
Institute for Collaborative Working

Over the past three decades the sourcing programmes and supply chains have increased exponentially not simply in terms of commodities and products, but also in a wider variety of outsourcing and service propositions. These extended networks have now bridged the traditional boundaries between organisations and in doing so introduce a significant spectrum of risk to business continuity and reputation. At the same time the implications for both natural and manmade disasters highlights the interdependence of companies of all sizes and in all sectors. Reliance on these extended relationships to deliver business performance raises the prospect that resilience and business continuity is no longer simply an internal issue for companies and prompts consideration for a much greater awareness in the identification of risk, selection of suppliers and increased focus on collaborative working and the capability of third parties to jointly perform when necessary.

The last two decades of the 20th century saw major changes in the business world, perhaps more so than ever before. Pressures on costs, diminishing traditional markets, the explosion in information technology add complex influences on the potential success of business strategies. This is combined with perhaps the most crucial of all – the dramatic growth in globalisation. These trends continue into the 21st century and will likely remain key factors for the future. Over the same period we have witnessed major changes to weather patterns and their impacts, increased political unrest, escalation of cyber crime and fraud on unprecedented scales and networked terrorism introducing wide ranging threats. Not to mention the implications of financial interdependence as seen through the banking crisis and its impacts on sovereign currency stability and contagion.

Ensuring the resilience of the supply chain, whilst harnessing the benefits of greater external engagement means that management of sustainable arrangements and their inherent risks must be integrated into operating practices. Sourcing strategies now have to balance the more historical parameters of completion with a greater understanding of the associated risks. The extended supply chain has now become an integral aspect of many businesses, but perhaps less focus is being given to the potential of third party risk flash back. The impact of the Tsunami on Japan’s nuclear industry highlights the potential reverse domino effect, as did the backlash from Rana Plaza.

Clearly the key to supply chain resilience and for that matter business continuity is clarity of potential impacts and risks. Seeking to simply have visibility or contractual commitments around these issues is likely to leave some aspects to assumptions which are perhaps even bigger risks. Developing the right kind of collaborative relationship with suppliers not only will help to broaden the perspective of risk but in many cases will, through greater openness, likely bring about wider and more effective solutions. Not only increasing openness but also building trust and commitment to jointly work together when challenges arise.

David will be discussing this and the issue of supply chain resilience within the 'Thought Leadership' stream at the BCM World Conference on Wednesday 6th November, starting at 15:20.