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Saturday, February 4, 2012

Is your organisation better prepared?

 2010 saw major earthquakes strike Haiti, Chile, China and Indonesia. It saw devastating floods in Pakistan and Australia. 2011 have brought out the opposite of resilience in people and organisation, confronted by the most extreme challenges. With flood events in Lagos, Australia, Brazil, the earthquakes in turkey, New Zealand, the tsunami in Japan, civil unrests in London, Greece, Spain, Italy, and the Arab spring of 2011, which ousted regimes in Tunisia, Egypt and Libya and created fuelled growing opposition to regimes in Syria, Yemen, Bahrain and other middle eastern states. These are very real recovery challenges that face organisations and you.  According to the Lloyd’s of London’s risk index 2011, 2011 was the second most expensive year ever for the insurance industry because of these incidents. 

In addition, while many of types of risk may be industry or regional specific, cyber risk is universal. 2011 saw the hacking of state network from India to Brazil to Nigeria. For businesses, the incident and frequency of data breaches have been even more unrelenting; Nintendo, Honda, Toshiba, Playstation, Nokia, Google, IMF, Wiki-leak and the Hong Kong stock exchange are victims of some form of cyber crime or hacking. A global estimate of cyber crime is now costing business around $114bn annually. Technical solutions are needed to evolve rapidly, together with more efficient reporting of breaches to help quantify the risk more accurately. 

By reflecting on disaster in terms of the need for strong, visible and distributes leadership, differentiated response, recovery and effective communication, organisations can achieve better outcomes with BCM, and reliably meet their obligations to regulators, boards and stakeholders. Since the true measure of a BCM plan is the success of it after an incident, organisations should apply the good practice approach which provides a baseline and common language to help BCM professionals to perform a rigorous Business Impact Analysis Assessment (BIA). The BIA is the foundation on which the whole BCM is built. It can be used to understand the impact of the failure to deliver a service or a product. The BIA identifies business activities across the organisation, identifies management owners of processes, identifies suitable staff, quantifies time scale and collects data for the Continuity Requirements Analysis (CRA). The good practice dictates that a BIA should be reviewed as a minimum annually but frequently in the event of business change, change to internal and external business process and significant change to risk and threats. Furthermore organisations must focus on robust BCM frame works strategies, resource allocation supporting continuity plans which objectively ‘fit for purpose’, practical and periodically tested and rehearsed.

After the unfolding events of the last two years, businesses need to give much greater priority to BCM planning carefully for those risks they cannot prevent, as well as being realistic about those they can. Organisations must determine its BCM strategy by using information gathered from the BIA, CRA and risk and threat assessment. Whatever strategy an organisation selects it has to ensure that it meets the target time for resuming the delivery of its products and services following its disruption. One strategy could be ‘balancing cost and speed of recovery’. In this strategy, there is always a trade off between cost and speed of recovery which needs to be balanced when selecting a strategy. So shorter recovery time objectives = higher cost and vice versa. Another strategy worth considering and is quite popular is ‘separation distance and the concept of “off site” it’s basically replicating operations in a different location. It reduces the likelihood of two sites being affected by the same incident except in cases like pandemics and cyber attacks.  Artco Solutions will also recommend a centralised access to data, emergency communications, emergency plans and key documents so senior management and employee have what they need when they need it.

As we have read, more than ever, businesses need effective BCM plans in place to protect their plants, infrastructure, property, staff, and supply chains from the fall of natural, political, social and economic threats.  

For further assistance please contact enquiry@artcosolutions.com

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