Business continuity – is India prepared?

By Arun Mehta, president and CEO, Richmond Advisory Services Inc.

In January 2007, I accompanied Ontario's Premier Dalton McGuinty as part of the official Ontario - India Trade Mission delegation. My objective was to complete a strategic assessment on the status of business continuity planning in the country and the emerging real estate marketplace.

Status of business continuity planning in India
In my discussions with business continuity professionals in India, it was quite evident that this was an area of great interest within the private and public sectors. Business continuity, in many respects, has been part of India’s corporate landscape for many years but it has historically been viewed as just one aspect of general risk management and business continuity activities have often been ad hoc, rather than developed using a formalized structure.

A wider move towards developing formal business continuity plans commenced in the private and public sector in 2000 and 2001, especially after the events of September 11th. This was then strengthened by the off-shoring boom, with the status of business continuity planning within Indian companies became a concern for many overseas organizations that were considering outsourcing to India.

In recent years many larger companies in India have taken the initiative of developing internal business continuity teams, or have been advised to do so by their parent companies which might be North American or European based.

Business continuity in the outsourcing sector
Since alternate sites are not readily available through third party providers, companies have invested in developing alternate sites specifically for recovery but this means added costs. These added costs impact the cost effectiveness of outsourcing, as companies now have to absorb the additional costs of business recovery. Real estate values are so cost prohibitive in tier one and tier two cities that third party providers of alternate sites will not at this stage build recovery sites in India.

Due to the relatively undeveloped status of the business continuity infrastructure in India, some companies have decided to outsource only a certain portion of their business processes to India, so that the option of business recovery back to the point of origin remains a viable option. Another initiative that is being pursued is that the outsourcing of business is being divided between two cities, instead of one, to mitigate risks. Some companies are even outsourcing business to three companies, operating from different cities, as a model of business recovery, so that all possible risks are mitigated. Another option that is being exercised is the outsourcing to two or three countries instead of outsourcing all of the business to India.

Government activity
The National Disaster Management Authority (NDMA), headed by the Prime Minister of India, is the apex body for disaster management in India. The Indian government with NDMA envisions ‘the development of an ethos of prevention, mitigation, and preparedness that strives to promote a national resolve to mitigate the damage and destruction caused by natural and man-made disasters’. NDMA is adopting a technology driven, pro-active, multi-hazard, and multi-sectoral strategy for building a safer, disaster resilient, and dynamic India.

Influences impacting business continuity planning in India
The Security Exchange Board of India and the Reserve Bank of India have developed business continuity initiatives, and the International Monetary Fund has expressed the urgency related to BCP. There is speculation that acts similar to Sarbanes-Oxley might be implemented in India. Another element that will impact the growth of BCP in India are companies that are North American and or European based requiring Indian companies to have a business infrastructure that is interrelated with BCP.

One area of concern is that the majority of small and medium sized businesses have not yet initiated initiatives related to business continuity planning, but this is not just an issue that is confined to India. BCP in India is still in many respects not under consideration if the employee base of a corporation is less than one thousand employees, unless the business unit is part of a larger foreign company.

Is India poised for disaster mitigation?
The answer to this question in my opinion is YES, but the caveat that has to intertwined with this answer is that there is still a great deal of work to do. India is a very complex country and all aspects of business continuity planning will be addressed by the private and public sector, but it may take some time. However, I am very confident that India will meet the challenges related to business continuity planning, not least because of the nation’s ambition of becoming an economic powerhouse.

Sources:
* NDMA
* InfoSecNews.org
* Reserve Bank of India

Arun Mehta is president and CEO of Richmond Advisory Services Inc., a multi-disciplinary management consulting firm that provides real estate, risk management, and workforce mobility consulting services. http://www.richmondrealtygroup.ca/richmondadvisoryservices

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•Date: 8th June 2007• Region: Asia/World •Type: Article •Topic: BC markets
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