|
 One of the keys to successful business continuity is choosing the right business location. Ed Reagan explains what main factors should be considered.
Most organisations conduct a thorough site selection process when looking for a new location. The criteria that are utilised in making the decision can run the gamut from the proximity to key customers and suppliers to the proximity to key executive's homes. In a number of cases it is simply finances that make the decision - with the most cost effective site being the one that is selected by management. This may be a sound financial decision at the time, but may not be the best decision for the continued growth and success of the organisation.
Site selection teams look at the common criteria and develop a decision matrix. Most of these matrixes include categories such as: the community as a whole; the labour force; transportation; utilities; the potential for natural and man-made disasters and the cost of land; structures and taxes. Each potential site is passed through these filters to determine if it fits the needs of the organisation and is assigned a score or rank. This seems like a very logical process, but a deeper look provides more information.
Potential disasters
It's common sense to avoid locations that are prone to natural disasters. In the US there are the west coast's earthquakes, the southeast's hurricanes, the midwest's tornados and the northeast's winter storms. What can be done about this? Organisations can ‘disaster-proof’ or harden a site so it will not be affected as greatly. This is done through installing generators, building stronger structures, having backup water supplies and building on higher ground in areas that often flood. These solutions are ideal for the remediation of a threat and for the survivability of the organisation when faced by potential disasters.
Community
It's important to find a community that fits the needs of the organisation and the employees. This is especially important if the organisation is planning on relocating existing employees. What would the potential impact be to the organisation if a percentage of key personnel refused to relocate? Is the organisation willing to lose the skills and knowledge of long-time employees who do not want to relocate? Finding a community with an equal or better quality of life would encourage personnel to stay with the organisation. It will also assist with the recruitment of new employees as the organisation grows. If the organisation is adding a new location instead of relocating an existing one, there is the potential opportunity to build redundancy into key business processes.
Labour
What is the availability of labour with the appropriate skill sets required? What is the local unemployment rate? How much will be spent to train new employees to do the jobs created? Talk to other organisations with operations in the area to inquire about their employee turnover and retention history. Keep in mind that the advantage of a lower cost workforce may be negated by the need to invest a lot of time, effort and money training employees and their subsequent replacements. Look for a location with a labour pool similar to the organisation's other locations, preferably one where there is a good supply of candidates to meet the needs of the organisation's growth. This might be a location close to colleges/universities/trade schools that will not only supply quality candidates but also allow for existing staff to continue their education advancement.
Transportation/logistics
How close are the modes of transport that will be needed to move products or services? Is it really necessary to be close to a highway, rail line or an airport? How far will employees, clients and suppliers need to travel or commute to the site? It's important to look for a location that is convenient to the modes of transportation that the organisation utilises. Keep in mind that other users of the modes of transportation may raise the risk of an event that can impact operations. It may be very convenient to place the site near a general aviation airfield so that company executives can land near the site and/or utilise an airfield with lower landing fees. The convenience, along with the savings in cost look good on paper, but what about the number of plane crashes that have occurred in the area, especially if there is a flight school located nearby? Is the lower cost and convenience worth the added risk? The proximity of commuter rail service may be a key consideration if the area has heavy rush hour traffic or a workforce that commutes by public transit. Be aware that the same rails that transport workers by day may also be utilised to move hazardous cargo on nights and weekends.
Utilities
Are the most obvious criteria here the costs of water, electric, natural gas, voice and data circuits? Consider how important a lower price for electricity is if the utility company chosen is prone to outages on a regular basis. Investigate how reliable these services have been in the past, how fast outages are restored and where the organisation would rank on the utilities' service restoration priority list.
When not ranked as a high priority to the utility company, explore the possibility of piggybacking on another organisation's higher priority. For example, select a location that is on the same power sub-station as a telephone central office, hospital, correctional facility or water treatment plant. Facilities like these will have their service restored in a more timely fashion.
Real estate
An older office building with a very good price or lease rate per square foot can easily be found, however, have inspectors not only look at the electrical, HVAC and mechanical systems, but also at the carrying capacity (weight per square foot) of the floors and roof. Weight restrictions may limit the number of cubicles per floor or cause problems with cooling systems located on the roof.
Taxes and government incentives
In an organisation's quest to keep costs down and/or a community's effort to recruit a company to create jobs, lower taxes may be offered to select one site over another. The money the organisation saves on taxes can also affect the municipal budget of the selected location. These funds may be needed by the community to service the needs of the organisation or its employees. Know how much the municipality would potentially raise residential property taxes to make up for a short fall in business taxes. More importantly, how does this trickle down into the employee's cost of living? Will they ask for raises when their tax bill rises or will they look for a better paying job elsewhere?
Summary
The most effective way to choose a site is to balance the organisation's financial costs with its operational needs. Making a decision based purely on cost is a disservice to the community, customers, employees and shareholders.
Ed Reagan is a member of Strohl Consulting Services with business continuity planning experience in the private, public and non-profit sectors. He can be reached at ereagan@strohlsystems.com
http://www.strohl.com
•Date:
3rd March 2005 •Region: US/World •Type:
Article •Topic: BC facilities/buildings
Rate
this article or make a comment - click
here |
