Beware the iceberg: Business continuity is too important not to outsource it

Beware the iceberg: Business continuity is too important not to outsource it

By outsourcing business continuity, African companies can position themselves for success in the global business environment.

By Willem Olivier, GM: Africa, ContinuitySA

One often hears the argument that it is cheaper to insource business continuity than to outsource it. On a first glance, it can seem as though costs are lower but, like the proverbial iceberg, this is because many costs, including staff time, are hidden below the surface.

We estimate that only 18 percent of the true costs of insourcing are recognised—they would include equipment and furniture purchase, and development costs. The rest of the costs, which include planning and design; installation and development; rental of premises; rates, taxes and utilities; insurance; maintenance; supplier management; electricity and diesel; operations personnel; security and clearing; and administration, among others.

The truth is, though, is that business continuity is one of those critical but non-core functions that is best outsourced

It is mandated by all governance codes and investors will look out for it. At the same time, though, it requires specialist knowledge to develop an effective business continuity management plan, keep it current and, critically, to ensure it works through regular, thorough testing.

There has been a lot of hype about Africa as an investment destination and new growth frontier but it is underpinned by real opportunity. However, if African countries are to maximise the benefits to their economies, their companies need to be able to compete with foreign competitors. To do this, they must be able to attract investment by demonstrating to investors that they are safe.

However, some companies will opt to implement it alone for a variety of reasons. However they quickly find that business continuity is a difficult job, not to mention expensive both in terms of capital and management costs but also in terms of a loss of executive focus. All too often, I have found, in-sourced business continuity is a casualty of the daily pressures of running a business: processes are not tested, and equipment is “borrowed” for production, and when a disaster strikes, the company finds its recovery capability is not adequate.

Next time: more detail on why outsourcing business continuity makes good business sense.