What are the risks that South African companies and their boards
should be factoring into their planning for 2012? ContinuitySA has
identified what it believes are the top issues facing business in 2012
that are likely to impact on business continuity strategies:
1. Socio-economic challenges ratchet up a notch
Last year, it seemed as though we might be coming out the
recession, but now the talk is all about the dreaded double dip.
Economic hardship is exacerbating social and political tensions,
especially as retrenchments swell the hordes of unemployed. Too many
people without work or the prospect of it places a huge burden on the
state, provides the climate for crime and is likely to fuel tension
between the haves and the have-nots.
2. Government performance and service delivery still lag behind expectation
Ongoing service delivery and corruption issues have continued
to fuel widespread social unrest. Some commentators are even talking
about popular uprisings comparable to those that occurred earlier in the
year in North Africa. Instability in the ruling party continues to
unsettle political and social life, and this will only get worse as the
ANC’s leadership conference approaches. Meanwhile — no doubt fuelled in
part by the economic problems mentioned above — strikes and social
protests seem to be getting more prevalent.
For business, one direct consequence is frequent work
stoppages, with staff actually finding it hard to get to their places of
work.
“It seems that South Africa is coming to a crossroads again,
faced with the choice between the high and low roads,” says Michael
Davies, ContinuitySA’s managing director. “We have to have confidence
that our leadership will make the right choices but, meanwhile, prudence
demands a renewed focus on safety measures, including proper business
continuity plans.”
3. National infrastructure remains weak—and the middle class is feeling the pinch
While Eskom contrived to come through a very cold winter with
relatively few blackouts, concern remains high as summer is the time for
planned maintenance. Another concern is the availability of skills to
maintain the aging infrastructure at Koeberg, and to operate planned new
nuclear power facilities. On the positive side, recent moves to
introduce independent power generation and green power into the South
African energy market are welcome.
That said, there are worrying reports that lack of additional
energy capacity at present is affecting the ability of some data
centres to expand.
Other infrastructural challenges include the new toll roads
around Gauteng and the new national health insurance system. While both
are desirable, they are placing additional financial burdens on the
middle class—i.e. the small tax base on which everything rests. Is the
middle class coming close to feeling as squeezed as the poor and
unemployed and, if so, how will it make its distress known?
4. Water remains a concern
Water security remains a problem in this country, exacerbated by the pollution of our existing water stocks.
Although the government finally woke up to the problem of
acid mine drainage and made R400 million available, media reports
indicate that little action has actually occurred. If substantial
progress is not made in finding a solution, the acid water is expected
to begin decanting into the Johannesburg basin in March 2012—it is
already decanting on the West Rand. Companies with IT equipment in
basements need to remain on high alert.
5. Worsening business climate
The risks mentioned elsewhere will continue to weigh on
risk-averse foreign investors, while the volatility of the rand will
encourage destabilising capital movements. The socio-political
challenges we have mentioned are also taking their toll on the outlook
of local business. With the business confidence index declining,
investment in equipment and people will be curtailed at a time when they
are more necessary than ever. Militant unions and demands for increases
that are significantly above inflation are further worsening the
business outlook.
With revenues under pressure, many companies will be tempted
to skimp on business continuity but this approach is short-sighted.
6. Regulatory burdens and responsibilities increase
Promulgated during 2011, the new Companies Act has made the
directors of companies personally liable for the outcome of their
decisions. The legislation is new and untested, making compliance even
more risky than it might otherwise have been.
In combination with the recommendations of the King
Commission, the new act has made risk management a much more important
item on the board agenda—and this includes IT risk.
Boards are increasingly accountable to all stakeholders
rather than just shareholders. In this regard, environmental issues are
becoming more prominent, which may add impetus to the move towards cloud
computing, which has the effect of greening the IT department.
7. The sting in the supply chain tail
Recent natural disasters like the volcanic eruption in Iceland
and the earthquake and tsunami in Japan have emphasised the flipside of
global interconnectedness. In order to ensure business continuity,
companies must increasingly consider their entire supply chains.
Adequate consulting around the business continuity threats originating
outside of the organization is imperative.
8. Cloud computing blurs vision
As predicted, 2011 saw considerable movement in cloud
computing. While it’s clear that cloud computing has real benefits,
non-specialist public cloud offerings should not be confused with
specialist business continuity, which is also making use of cloud-based
approaches.
“The need to have absolute quality assurance and security in
terms of your business continuity remains, especially in light of
boards’ enhanced accountability,” Davies notes. “On the other hand, the
greater availability of bandwidth and improvements in technology are
changing the model.”
9. Mobility is creating huge new data risks
The growing range of smart mobile devices, and the explosion
in useful applications, has made mobility a fact of life. At the same
time, there is growing awareness of the value of a company’s data, hence
the emergence of ‘data as a platform’. Securing and backing up the
corporate data on mobile devices usually owned by employees rather than
companies is raising CIOs’ temperatures worldwide.
10. Business continuity is still not integrated into corporate strategy
Given the scale and magnitude of the challenges business
faces, the danger remains that business continuity is marginalised and
siloed. In many instances, financial pressures are causing companies to
cut back on business continuity. For example, banks which have
retrenched large numbers of people now have excess office space which
they tend to use to provide their own workplace recovery—and this may
lead to a business continuity solution that is less than optimal.
A related issue is that the long-term viability of smaller
business continuity providers is looking less certain in this climate.
We think this will prompt a ‘flight to quality’ in many cases.
As indicated above, the emergence of new opportunities to
remodel business continuity using a private cloud approach is a
game-changer, offering cost savings, a much more effective product and
the opportunity to get a return on your business continuity investment.
www.continuitysa.com
