Business Continuity – Is it really worth the investment?

17 May 2016

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Most people don’t disagree with the importance of business continuity as a concept; no one wants their business disrupted. I often hear people say, ”We are good at handling incidents – we do it every day”, but sometimes they aren’t able to recognise the potential return on investment of a proper business continuity management process (e.g. understanding the business, strategy, planning, training, exercising). Instead they rely on intuition and, ultimately, they are taking a gamble with their organisation’s future.

I have heard quotes such as ‘80% of businesses affected by a major incident either never re-open or close within 18 months’, however I’ve never found evidence of this, and don’t think it’s the best way to sell the case for business continuity to your board. So apart from the obvious, that business continuity can minimise disruption to the business, what else can be saved/earned to demonstrate return on investment? How do you demonstrate that it’s not just an overhead but an essential investment?

Research by Knight and Pretty is often used to provide compelling evidence for a business case for Business Continuity planning. The findings concluded that effective management of the consequences of catastrophes are a significant factor in the recovery and impact on share value.

BCAW - Alan

But what about the other financial and non-financial returns?

  • Investing in what matters – Without properly understanding your business, its priorities and dependencies, there is a tendency to protect everything, without a real understanding of what’s important, and the risks of not doing something. This results in over-specified business continuity capabilities. Having near real time recovery (e.g. instant replicated servers for all applications) for everything costs, and you can save money by taking the time to understand your business priorities and risk appetite first.
  • Achieving integration & efficiency – A coordinated approach to business continuity can help identify areas of inefficiency and overlap. The process of identifying workarounds can surface inefficiencies, with people often saying that ‘it’s always been done that way’ and ‘it’s the first time we’ve taken to time to re-evaluate how it happens’. The business impact assessment also recognises critical interdependencies, opens discussion between departments and as a result they become more joined up, and sometimes identifies areas of duplication.
  • Exercising or team building? – It’s important to ensure you have a tested your responses to be really confident that plans are good enough to help manage a disruption. Responding to disruption is also about people working well as a team and, with thought, these exercises can be used as innovative ways for team building. You can be imaginative and have fun with the scenario without losing the point – so when’s your next zombie invasion?
  • Competitive advantage – We all want the best uninterrupted service – increased reliability and confidence in being able to maintain operations will prove a competitive advantage in sales negotiations and also investments. There is evidence that those without a positive approach to BCM face impacts on their share value following an incident.
  • Saving on insurance – Some organisations don’t even realise they have business disruption insurance (have you checked?) and, like everything, it comes at a cost. With a proven business continuity capability you reduce your risks and therefore are better placed to negotiate your premiums with your provider on various insurance products[1] [2].
  • Thinking of outsourcing? – A better understanding of the priority of services and the required level of resilience means you are in a better position to negotiate the contract right first time. Whether this be in a data centre, people, property or any other service provided by a third party, you will ensure you have what you need in a disruption not only from within but from those whom you rely on.

Alan Jones | Enterprise Resilience

+44 (0)7809 551 352

View Alan Jones’s profile on LinkedIn

[1] British Insurance Brokers Association (BIBA), 61.6% of interviewed insurers and brokers confirmed that companies, by having a BCP, will benefit from getting additional types of insurance

[2] The BIBA survey also shows that 55.7% of the responding insurance firms offer discounts on premiums, if a client has a BCP

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