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 By Alison Campbell, business resilience journalist.
For the past decade, UK plc has worked hard streamlining business processes, reducing inventory and shaving costs. Although it has resulted in leaner operations, they are now more reliant on supply chains, which has created a “wicked problem” difficult to solve.
Those were the words of Dr Helen Peck senior lecturer at Cranfield University when she spoke at the recent BRiSC2010 (Business Resilience in the Supply Chain) conference held at Reading’s Madejski Stadium and attended by business continuity and resilience delegates from some of the UK’s largest companies.
But the focus of this year’s event, organized by Colin Ive, principal consultant at CoDrim, and sponsored by SunGard Availability Services, was not on big business but on SMEs (small to medium enterprises), categorized by the government as those with fewer than 250 employees. These are the operations that constitute a large proportion of the supply chains relied upon by big businesses today. Unlike big business, however, they are largely unregulated and fewer have business continuity plans in place.
“The supply chain-reliant businesses we now have,” stated Peck, “have actually served to increase business continuity risk and mean that problems can spread, like a disease, more rapidly and have a more profound, far reaching effect on whole industries than ever before. It’s a wicked problem.”
Her views were reflected in the presentation that followed from Stuart Sterling, assistant director of the SME corporate resilience task force at the Cabinet Office. He acknowledged that the upside of this decentralized approach by large corporates is the opportunities it has created for the SME sector, which has grown in the UK year-on-year since 1994. However, he also cited (from personal experience of running a small business) the problems faced by the sector in terms of a lack of resources to dedicate to implementing business continuity and resilience initiatives.
“I know what it’s like to get to the office at six in the morning, leave at ten at night and still have unfinished work. Small businesses don’t have dedicated resources they can throw at this problem.” He said.
“They can’t be forced to either. Big businesses are now regulated to comply with business continuity initiatives and they often employ fulltime staff to take care of it. It would be wrong to come down hard on small businesses in the same way, try and force them into compliance with BS 25999, for example, without making it manageable.” He added that he felt that BS 25999 is scalable for SMEs.
The Cabinet Office is investing in a corporate resilience strategy for SMEs, having set up a steering committee and team of representatives from inside and outside government. Currently, there are around 5 million SME businesses (99.9 percent of all enterprises) in the UK that employ some 59.4 percent of private sector workforce.
Andy Tomkinson, partner in business continuity consultancy Adtapt stirred things up at the end of Sterling’s presentation by pleading with him to persuade the government not to waste valuable resources on the SME sector, that in Tomkinson’s view: “are simply not interested.” It was a surprising statement from someone inside the business continuity sector and provoked a great deal of debate over lunch.
Comments from the delegates were mostly in agreement with Tomkinson. In one respect he is right, people were saying: SMEs have too much on their plates and little reason to take business continuity seriously. On the other hand, as one delegate pointed out, wasn’t that the attitude big businesses had until they were forced to comply and isn’t that the very attitude the business continuity industry has been set up to change?
Sterling stood firm, saying that while he understands Tomkinson’s concerns and has sympathy for small businesses facing mounting pressures and decreasing margins, particularly in an economic downturn, it is crucial the 69 percent that do not have business continuity plans in place are given the support they need to safeguard their future. He used an expression he’d read describing SMEs as “the soft underbellies of UK plc”. “We want to help them develop coherent, effective but inexpensive ways to build resilience into their businesses, which will make them more efficient and profitable overall. It’s a message change from fear to value creation.”
Peck had touched on a similar point in her keynote presentation earlier in the day by posing the question: risk or resilience? She went on to explain why the risk model, which was originally developed to reduce insurance premiums, is no longer sufficient for today’s supply chain-reliant businesses. She suggested a fresh approach, to develop value chains as well as supply chains. “Value chains deliver profit, supply chains deliver goods.” She said.
What came across to me, sitting listening to the speakers at BRiSC2010, is something that seems obvious, intellectually, but that appears to be rather more difficult to implement practically and that is that we are all in this together. Yes, some feel it’s a corny slogan (adopted most recently by the Conservative party in their election manifesto) but it’s also true. It’s obvious that by divesting costly aspects of the business to parties outside of it and then squeezing margins is a bad idea as is the creation of supply chains, upon which one is so reliant, without working in partnership with them.
BRiSC2010 was a worthwhile, thought-provoking event, well attended, well organized and with an exceptional line up. Anyone who could not be at this year’s event is strongly encouraged to sign up for next year. It was a day well spent.
Alison Campbell is a writer, publisher and founder of Stillwater Publishing.
•Date: 24th Sept 2010 • Region: UK/World •Type: Article •Topic: BC general
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