In today’s highly competitive and fast-moving marketplace, business interruptions put at risk revenue, hard-won customer relationships and corporate reputations. Adopting a laissez-faire attitude towards potential catastrophes and reacting only when disaster strikes will leave businesses exposed.
Business continuity planning (BCP) can minimise the impact of unforeseen disruption. While it won’t stop disruption occurring, BCP can improve an organisation’s control of situations and help reduce the risk of a serious disruption resulting in a business-threatening crisis.
Benefits of being prepared
Firms with well-thought through and effective continuity plans stand more chance of returning to ‘business as usual’ in a faster time frame and with minimal pain. An approach which in turn ensures business is retained and clients remain satisfied.
Visible and effective planning can also offer wider reputational benefits – building confidence among staff, suppliers and prospective customers and promoting the company above a less well-prepared competitor.
The regulatory position
Regulatory considerations must also be taken into account. The Financial Services Authority (FSA) requires firms to have in place ‘appropriate arrangements’, with planning tailored to the needs of the business involved. Basel II banking rules, followed by some lenders, require companies to adopt formal business continuity plans. The FSA also recently published a ‘Business Continuity Management Practice Guide’, sharing examples of BCP practice from big names of the industry.
Principles and pitfalls
A practical and business-centric way of approaching BCP is to focus on a number of critical elements which are imperative to remain functional should unforeseen disruption occur. Such elements include crisis management, workplace locations, IT, people and processes. It is also important that plans are tested regularly. Plans without regular maintenance and review checks often become unworkable and will be ineffective should they need to be employed.
Crisis management
One area sometimes overlooked in BCP concerns the chain of command and responsibility during a crisis. Designating defined roles in advance of any unfortunate circumstances can maintain order and traceability throughout a situation. It can also aid in subsequent events such as communicating with the media.
Location
Should a company’s head office become unusable, alternative workspace arrangements need to be set in place. Larger companies may have the luxury of additional sites, however, smaller firms might need to consider a shared arrangement with a business partner. The cost of third party space can be reduced by as much as 80 per cent by contracting to a syndicated first-come first-served arrangement.
Distances to earmarked alternative sites must, however, be considered. Premises should be far enough away so as not to incur a similar disaster as the primary site, yet, within a sensible distance for staff.
IT
Day-to-day implementation of IT back-up is a hardened and almost subconscious rule among most firms. Nevertheless, few businesses consider separate sites to enclose IT systems should they incur severe data or network losses. Systematic and conclusive alternatives to maintain communication, should IT systems fail, must also be continually considered.
People and processes
Asking staff to work from home is another option if a site becomes unusable. Some business continuity plans consider Voice Over IP (VOIP) internet telephony as a workable solution to redirect business calls without customer knowledge. However, companies should be aware that if employees are requested to work from home the company is still liable for their health and safety by law.
If critical business tasks fall to the expertise of a few staff, it is necessary to consider whether key people should work in separate locations.
BCP is a fairly standard consideration and practice among large networks of brokers who have greater amounts of effort and money to invest in formal planning. However, in this competitive industry all firms are now considering the resources they should be allocating to the task.
While smaller brokers might not have written plans, systems and processes may already be in place. They may already be used to working from home when necessary and some may already subscribe to services to back-up data offsite and allow remote access via the internet. There is also no shortage of business continuity advice that can be drawn upon.
In today’s world of business there is now no room for complacency regarding business continuity. While some borrowers may pray for the day when lenders meet with disruption and repayment details appear untraceable, the industry, with effective planning in place, can remain confident this will never occur.
