Business continuity management in a recession: luxury or necessity?
Is BCM a luxury or a necessity in the present recession? The real issues probably have not changed because of the recession: they have just been brought into greater focus under the new financial microscope. In the good times, we can simply argue that ‘everyone should have business continuity’. In the bad times, we need hard proof of its payback. A BIA is fine, but if a company has it’s back to the wall, worrying about survival, it isn’t going to welcome additional spend on protecting itself against the dread event that hasn’t happened in its twenty year history – unless there are clear benefits here and now. In the present climate, if we are to justify BCM in the private sector, we need to answer these questions: * How will it help cashflow? If we don’t have credible answers to (at least most of) these questions, we simply won’t get investment in business continuity – and existing budgets may be slashed. So, what are the answers? It may be difficult to see how business continuity can help cashflow except by making sure the customer credit rating, invoicing and debt collection systems are working in the event of a disaster. However, we can seek to reduce cash outflow. How can we reduce costs and boost corporate profits? Is there anything we can do to defer or reduce business continuity spend? Can we use internal facilities and resources instead of vendor facilities? If we have an in-company disaster recovery facility, could we market it to external subscribers and make it a profit centre rather than a cost centre? What is the cost of everyday business interruption caused by equipment, process or supply failure in terms of lost production, productivity, wasted materials, rework and overtime? Can the measures required for business continuity help to reduce or eliminate it? Let’s re-examine our business continuity strategies. Could we reduce the PCs we have on quick resupply contracts by relying on PC superstores, open 6½ days a week, to supply lower priority users? Are there ways we could use our own facilities or serviced office accommodation, paid when used, rather than paying subscriptions to a recovery vendor? However, the risk element may increase and post disaster support will be reduced: is that acceptable? In business continuity management, time is money: the quicker the RTO, typically the more it costs – especially when it comes to technology. Are there workarounds the business could use to defer the RTO for technology? Does the strategy have to be one of replication? Would it be cheaper to find alternative ways to source the products or to get the service deliverables to our customers? Would the inventory cost of holding a buffer stock be cheaper than ‘hot’ replication? Could we estimate, calculate or negotiate payments or settlements for a period rather than have to calculate them by using expensive, quick restoration with tight RTOs? Why not: utilities do this with their customers all the time. As long as we agree it with our suppliers and customers before the event, it’s a valid strategy. So, there are ways in which we can save costs – now – and add to profits. How can we increase market share and retain existing customers? The obvious answer is to ensure continuity of sales channels and excellence in customer service. But a good BCM professional is also a sound business analyst and we have talents outside the business continuity field that can, and should, be used for the benefit of the company. Maybe here we need to exercise these business analysis skills and stray more into business or operational areas in the interests of ‘risk assessment’, ‘continuity considerations’, ‘security’ or any other excuse you can think of. Have you listened to – or tried to use – your own IVR (Interactive Voice Response) system? Try it. Most IVR systems are simply appalling and guaranteed to lose prospects and customers. The same applies to websites. It’s a source of constant amazement that typically the website has a high recovery priority – yet is so badly designed, slow to load and dysfunctional to use that prospects and customer shun it. Elevate the importance of customer service. A simple anecdote proves the point: a neighbour, a civil engineer working on the London Olympics, has just lost his connection to his telco which provides internet access and VOIP. He managed to visit the telco’s web site using alternative resources: it contains only an incorrect phone number, no fax number and no email address. Maybe we need to consider our procurement activities. Can we insert clauses in our supply contracts for quick resupply and technical support in disaster rather than pay subscriptions for it? Do service level agreements reflect your RPOs and RTOs? If not, why not? If suppliers are committed to deliver against our RTO and RPO, maybe we need to spend less on business continuity and disaster recovery. What can we do to increase share value? Well, the above steps should help. Maybe, while looking at business continuity for the sales force, we could also consider risk related to contract duration: the longer term the contracts, the greater the company’s ‘drop-dead’ value (i.e. its value if no further contracts are sold) and the higher its share value. Maybe we need to shift the emphasis slightly: instead of business *continuity* managers, we should promote ourselves as *business* continuity managers. Author:
•Date: 8th May 2009• Region:UK/World •Type: Article •Topic: BC general |
