Many of Britain’s SMEs still ignoring business continuity

Despite recent high-profile threats to business hitting the news, from terrorist attacks and weather extremes, to fuel protests and the ‘bra wars’ between the EU and China, a new research report produced for AXA by Henley Management College – ‘Out-of-Business As Usual?’ - has found that the UK’s SMEs are gambling on their futures.  Worryingly 76 percent of SMEs questioned by AXA have not reviewed business approaches since the July terrorist attacks, and according to the report, this is endemic of a much wider failing on the part of small businesses to make adequate provision against business interruptions.

According to research from AXA, 46 percent of UK SMEs don’t have a business continuity plan, while more than a third (37 percent) of senior management admit they have relied on luck when making an important business decision. Given that SMEs account for more than 99 percent of the total number of UK firms, representing more than half of the UK’s private sector turnover and employ 56 percent of private sector work-force, these findings expose an alarming risk for the British economy.

Published this month, ‘Out-of-Business as Usual?’ examines the challenges SMEs face in making their businesses more resilient, reviewing why the majority don’t take business continuity management seriously. The report uncovers four key assumptions made by SME managers which explain their lack of action on business continuity. These are:

* Insufficient resources – the assumption that the business cannot afford the costs or management time to make continuity plans

* Lack of impact estimation – the assumption that the business will be able to survive the period of interruption, both financially and in terms of customer tolerance

* Inefficient scenario planning – the assumption that many problems are either too small to matter or too large to deal with, and that those within a conceptual ‘comfort zone’ will be manageable as they happen

* Inability to prioritise – the assumption that if a crisis hasn’t happened yet, it’s not urgent enough to plan for.

The research suggests that for many smaller companies risks are either considered ‘too big’ to worry about, or small enough that managers consider they can deal with them as they happen.

According to further AXA research SMEs believe that the loss of a key member of staff poses the biggest threat to their business (29 percent), followed by IT failure (16 percent) and damage to property (16 percent).

AXA risk control and strategy manager, Douglas Barnett, says:  “As the report proves, too many of Britain’s SMEs bury their heads in the sand when it comes to business continuity planning, assuming they can deal with problems as and when they arise. Through the launch of this new report we want to ensure business continuity planning gets the recognition it deserves without increasing the burden of paperwork SMEs have to deal with. Continuity planning can be a simple, practical measure whereby senior managers ask a series of ‘What if’ questions, and for most businesses, the only cost to the business will be their time.”

•Date: 16th September 2005 • Region: UK • Type: Article •Topic: BC statistics
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