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Global Connectivity Creates Need for Business Continuity Planning

Posted on Thu, Jan 31, 2013

The World Economic Forum recently released Global Risks 2013, Eighth Edition detailing the greatest 50 global risks for 2013. The identified risks were analyzed from a survey of over 1000 experts from industry, government, and academia in terms of impact, likelihood and interconnections. The survey revealed that respondents see increased risks with a higher impact level than in previous years. While the growth of a global interconnected marketplace may be financially beneficial, it also appears to increase a company’s vulnerabilities to business continuity issues.

A sudden loss of critical and supporting business functions and resources can be detrimental to a business. Many of the risks in the latest edition are enhanced by this “hyper connected world”, yet all of the risks fall into one of the following five categories:

  1. Economic
  2. Environmental
  3. Geopolitical
  4. Societal
  5. Technological

Companies need to determine how these categorical risks can impinge on their daily site-specific business operations to determine the best antidote for disruption and/or potential failure.  Detailed and exercised business continuity planning minimizes business disruption and the potential for financial loss. However, identifying risks, examining potential threats, and incorporating the effects on these critical functions require budgeting and staffing.  Preparation for a disaster can maximize optimal business functionality, yet companies still do not budget accordingly.

Interim results of a Business Continuity Insights’ survey regarding business continuity trends for 2013 revealed that 84% of respondents’ businesses intended to change the way it manages business continuity. Many of the changes may come in the form of initial plan implementation, updates, or manner of accessibility (mobile internet connectivity).  The downside is that many of these businesses will not increase budgets allocated for emergency preparedness.

According to the January 2013 edition of ISHN Magazine, only 16% of environmental, health, and safety professionals will see a budget increase in 2013, leaving 84% with the stagnant or decreased budgets. The statistics go on to reveal that staffing will only increase 14% while responsibilities will increase 46%.  Unfortunately, changes are expected without an increased budget while studies reveal global risks and impact levels affecting continuity are increasing.

The Global Risk 2013 study revealed the following risks associated with each threat category (pg 46) and the likelihood of the event occurring over the next ten years. While some risks are a result of the global governmental landscape, the interconnectivity of the worldwide marketplace may result in affecting continuity of operations far from the incident site. This occurred when the Japanese earthquake and subsequent tsunami affected automakers and electronic component production across many continents. Companies should utilize these finding to determine if their operations are at risk of the following:

  • Economic
    • Failure to address government debt
    • Severe income disparities and unemployment
    • Price fluctuations in critical commodities
  • Environmental
    • Governments, businesses and consumers fail to reduce greenhouse gas emissions and expand carbon sinks.
    • Increasing damage linked to greater concentration of property in risk zones, urbanization or increased frequency of extreme weather events.
    • Governments, businesses and consumers fail to reduce greenhouse gas emissions and expand carbon sinks.
  • Geopolitical
    • Weak or inadequate global institutions, agreements or networks, combined with competing national and political interests, impede attempts to cooperate on addressing global risks.
    • Terrorism: Individuals or a non-state group successfully inflict large-scale human or material damage.
    • Corruption: The widespread and deep-rooted abuse of entrusted power for private gain.
  • Societal
    • Water supply crisis: Decline in the quality and quantity of fresh water combine with increased competition among resource-intensive systems, such as food and energy production.
    • Failure to address both the rising costs and social challenges associated with population ageing.
    • Religious fanaticism: Uncompromising sectarian views that polarize societies and exacerbate regional tensions.
  • Technological
    • Cyber-attacks: State-sponsored, state-affiliated, criminal or terrorist cyber- attacks.
    • Data fraud/theft on an unprecedented scale
    • Critical system failures: Single-point system vulnerabilities trigger cascading failure of critical information infrastructure and networks.

For tips and best practices on designing a crisis management program, download Best Practices for Crisis Management.

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Tags: Business Risk, Redundant Systems, Emergency Management Program, Event Preparedness, Business Continuity Plan, Business Disruption