Part one: A series of unfortunate events

The most unlikely of events can and do occur, to the detriment of those they impact upon

Published:  01 December, 2021

Few businesses ever plan for the unthinkable, the once in a lifetime flood, fire, terrorist outrage or at the extreme the outbreak of a pandemic such as Coronavirus. Consider the 2005 Buncefield Oil Depot explosion which caused havoc in the locality of Hemel Hempstead. Six buildings had to be demolished and 30 more needed major repairs before they could be reoccupied.
    
Then, in January 2019, Kwik Fit’s computer systems were taken offline following a computer virus. Appointments were cancelled and customers left angry. A few weeks later a devastating fire at Tornado Tyres in Birmingham destroyed everything bar the walls; Neighbours of the business were affected as well.
    
A June 2018 survey from the Federation of Small Business reckons that only 35% of small businesses and the self-employed had a plan in place to cope with potential disruption risks to their business operations or their supply chains.
    
Speaking for the Business Continuity Institute (BCI) Brian Kinch said that 80% of businesses generally never fully recover from a crisis where they have been insufficiently prepared. He observed: “It’s impossible to prevent disaster, but businesses can prepare for recovery through a business continuity plan.”
    
Business Continuity Management is based on the principle that it is the responsibility of a firm’s directors to ensure the continuation of its business operations at all times. To do this necessitates having plans, processes and practices in place to meet most possibilities.

Prepare for every eventuality?
Gordon Brown, a senior consultant at PlanB Consulting, a business continuity consultancy, thinks that it’s almost impossible to list every eventuality. He said: “The risk profile of firms can vary for a number of reasons. However, we would highlight the most pertinent risks across many firms as being the loss of data and cyber security breaches or ‘attacks’.”
    
Of course, physical site issues are also very relevant, including flooding or denial of access situations.
    
Brian believes that the business continuity process is not necessarily about planning for a specific event, “but about planning for what to do in the event of any incident impacting one or more of four key areas: people, premises, technology and processes.” For any corporate this might include power supply interruption, supplier failure, denial of access or widespread sickness amongst staff – as well as the impact of Brexit should it be implemented.
    
To an extent, this means that a plan should be based on the internal and external issues that are relevant to the company and interested parties and what they need and expect from the business. From there the plan should consider what needs to be done to keep the firm going, or recover from a problem during the interregnum. Of course, interested parties go beyond customers – there are many others including employees, suppliers, landlords and funders. They all still need to be paid which will necessitate payroll and bought ledger processes being critical to any recovery plan.
    
Gordon says that thinking ‘outside of the box’ is essential: “If you look at recent incidents, many were unforeseen or very unlikely. For example, KFC almost ground to a halt in 2018 due to a supplier change where an operational issue caused a business continuity incident and a media crisis.”
    
Clearly, firms shouldn’t ignore the obvious - fire, flood, client or supplier insolvency, vandalism, terrorism, equipment failure, and telecoms issues. Once identified, it’s up to the firm to decide what if anything they propose to do to address these risks.
    
Thinking wider, Brian says that it’s important to recognise “that each issue has a degree of uniqueness and the main risks, or the significance of impact, may differ from one event to another.” A chain of events that starts with a technology or a process failure that happens on a Friday may be relatively unremarkable. If it is on the same day that monthly payroll is run, and prevents salaries from being paid, this may have a very significant knock-on impact for employee financial well-being.
    
Next time: What to put in a business continuity plan.  

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