New research published by Marsh shows that many firms appear to be over-confident in their ability to manage the business continuity and supply chain risks facing their organizations, leaving them highly vulnerable to physical disruption and economic conditions.
The research, for Marsh's 2010 Business Continuity Benchmark Report, examined the perceptions of business continuity management of over 220 business continuity and risk managers from 11 industry sectors, including financial services and manufacturing, across Europe, the Middle East and Africa (EMEA).
Although 83 percent of respondents believed that business continuity management was integral to their risk management and that it was understood and supported by senior management, only 41 percent said that it had given them a better understanding of their business. Moreover, just 29 percent felt that it had led to improved risk-intelligent decision-making.
The findings also highlighted that firms concentrate business continuity plans on physical supply chain risks over non-damage related risks, such as those caused by the Icelandic volcano and air traffic disruption. In the manufacturing industry, 81 percent of respondents agreed that their business continuity plan covered all their supply chain risks, whereas in financial services only 43 percent of respondents agreed.
"These results show that firms value BCM much more highly than when we last conducted this survey two years ago. However, our experience is that many organizations overrate their BCM capabilities and their perceptions often do not match reality," explained Hugh Morris, managing consultant in Marsh Risk Consulting. "The more obvious nature of physical supply chain risks is apparent to manufacturing firms, while only the most advanced financial services firms realize how important and vulnerable their supply chain can be.
"Service firms can be equally, if not more, at risk from supply chain disruption than manufacturers due to the complex network of inter-dependencies with other financial institutions. As the recession reminded us all, the domino effect when these firms cannot supply each other with capital can have far-reaching and extremely damaging consequences," Mr Morris added.
Marsh's 2010 Business Continuity Benchmark Report examines the perceptions of business continuity management (BCM) of over 220 business continuity and risk managers from 11 industry sectors, including financial services and manufacturing, across Europe, the Middle East and Africa (EMEA).
The report can be obtained after registration here.
•Date: 18th June 2010 • Region: Various •Type: Article •Topic: BC statistics
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