Every business is exposed to risk of various kinds. In fact, some would argue that a business’s profitability is directly linked to the amount of risk it faces, and how well it manages that risk. The more risk, they say, the more profit.
It’s no surprise then that various disciplines have arisen to help companies manage the risks they face: IT risk, Information Security risk, Economic risk and Credit risk. But underpinning them is all is Business Continuity Management (BCM), which deals with operational risk. It’s aimed at ensuring that the business can continue to operate as normal as soon as possible after—or even during—a disruptive event. Such an event could be as dramatic as an earthquake or a revolution, or as mundane as sustained power outages or a flu epidemic.
South African businesses are fortunate in that they do not face many of the dramatic environmental risks that other parts of the world face, but we are highly susceptible to risks associated with emerging markets: industrial action, power and water shortages, service-delivery protests, inadequate infrastructure are all risks we face, and that can threaten long-term sustainability.
Whatever the risks, BCM looks at the people, processes, infrastructure and technology that the business needs to operate, and then identifies (and ranks) potential threats to each of them. It puts in place plans for responding if these threats become real, but it also establishes ways to avoid them. In so doing, it provides a framework for building organisational resilience.
In the end, by helping to ensure that the company can continue to operate, BCM protects the interests of stakeholders, and the reputation, brand and revenue-generating activities of the company.
Next time, the five steps to effective BCM.