In today’s crowded and mobile world, pandemics represent an ongoing threat to business continuity. Is your business continuity plan up to it?
By Kabir Singh, Senior Manager: Advisory Services, ContinuitySA
Pandemics are increasingly a fact of business life, and they pose a fundamentally different set of challenges to traditional threats to business continuity. Business continuity plans are typically designed to help companies respond to localised threats, like fires, bombs or IT outages. Once the event is over, recovery can begin even though the effects may linger.
By contrast, a pandemic unfolds over a large geographic area. Current models suggest that the next pandemic is likely to come in multiple waves, with each wave sweeping across the globe in a matter of weeks and lasting a few months. So there needs to be a shift in the nature of continuity planning, away from strategies that protect infrastructure and toward those that protect employees and their ability to conduct business during a sustained crisis.
There are multiple facets to a plan to respond to a pandemic, among them human factors (such as employee education, hygiene, staff movement and evacuation, sick leave policies, and absenteeism) as well as operational issues (managing supply chain and distribution-network disruptions). As companies factor this kind of threat into their business continuity planning, they will find themselves having to frame a broader, more resilient approach to business resilience that can better equip employees, operations, and relationships, even in the face of traditional threats.
Especially important for resilience is the realisation that having plans in place is not enough; continuing sensing and response capabilities will be required.
The following basic elements should be addressed when preparing for a pandemic:
Identify core business activities. Having identified the organisation’s core operations, management must decide whether they have the necessary people and skills to continue running the business in the event of a pandemic, or whether different geographical locations can be centralised in the event that staff numbers vary at different sites.
Identify infrastructure and resources. What infrastructure and resources does the business need to continue to offer its core services at an acceptable level? Executives may also need to decide on the minimum level of service to ensure the company stays in business. Trading might not be economically feasible in the short term.
At the same time, though, a resilient company could increase market share and profitability at the expense of ill-prepared competitors.
Involve stakeholders when the business continuity plan is implemented. Stakeholders need to know why it is in operation, what it is and their role. They also need to be fully briefed on its effects; for example failing to notify suppliers that a company has pared back the business may result in overstocking products or increased liabilities under supply contracts.
Minimise workers’ illnesses. A business’s existing obligations under safety legislation continue when a pandemic strikes. Executives need to eliminate or minimise the risk of harm to employees, contractors and customers. Obligations can take the form of preventing employees interacting with the public or finding alternative ways to do business.
Implement pandemic plans. The World Health Organisation has declared that pandemic plans should already be in effect. The plan should factor in the potential for implementing the plan during a seasonal outbreak. Practically, this may be as simple as discouraging sick people from coming to work.
Revisit disclosures and obligations. Company officers need to ensure that the business has appropriate cash reserves, access to lines of credit, or the ability to quickly liquidate assets if trading conditions deteriorate rapidly. Insurance arrangements may also need to be reviewed, as it is likely that any pandemic would normally be deemed a force majeure under standard insurance contracts.
Develop mitigation strategies. Employers must examine how they can mitigate economic or business disruptions. A pandemic can cause absentee rates to rise dramatically; suppliers or distributors may also be affected.
Other considerations are whether the company has fall-back strategies when it is impracticable to continue with current work practices in the short term. For example, low staffing levels may force a company to eliminate all cash handling and provide only electronic banking.
Rebuilding and recovery. Business continuity plans should allow for rebuilding and recovering after a pandemic or epidemic has finished. Companies that can recover quickly may have a distinct competitive advantage.