With the new year, every company should assess their business continuity risks, operational vulnerabilities, and recovery time objectives for each critical business function. Companies who understand these threats to financial resilience can become better prepared for and possibly mitigate these business continuity issues.
Mitigation includes recognition, comprehension, communication, and implementation of modifications, procedures, preparations, and/or assets that can directly minimize the impact or likelihood of the threat, simplify/automate recovery requirements, and/or accelerate recovery time. Every company and each facility has its own unique associated risks, however through dedicated risk mitigation analysis and proactive measures, hazards and business disruptions can be minimized.
Threats and vulnerabilities can stem from both external and internal actions. Therefore, companies must analyze potential threats from a variety of potential sources. A localized vulnerability and impact analysis should include, but is not limited to:
- Weather patterns
- Geographical influences
- Security efforts
- Cyber evaluations
- Inherent operational hazards
- Facility design
- Maintenance issues
A business impact analysis should be used to identify critical business processes, potential recovery strategies, and areas that could benefit from risk mitigation. This resilience assessment tool should identify potential vulnerabilities and initiate proactive changes to minimize impacts if a disaster were to occur. If the level of risk identified is deemed unsafe or unacceptable for operational viability, additional recovery options, safety procedures, or applicable strategies may need to be developed and implemented.
Risk recognition can occur through many paths including inspections, audits, and job hazard analyses. However, a detailed risk analysis should include, but is not limited to the following:
- Identify site specific assets that are unique to a specific location, facility, and operation
- List hazards that corresponds with each asset: Multiple hazards may be applicable to a singular asset.
- For each hazard, consider both high probability/low impact scenarios and low probability/high impact scenarios.
- Mitigation opportunities: As you assess potential impacts, identify any asset vulnerabilities or weaknesses that would make it susceptible to loss. These vulnerabilities are opportunities for hazard prevention through procedures/processes upgrades or risk mitigation.
- Identify threat scenario probability as low, medium or high.
- Identify impact potential as low, medium or high for each of the following:
- Regulatory or legal
- Brand image or reputation
- Determine priority level for planning and mitigation
The probability and impact severity should determine the priority level for correcting the vulnerability. The higher the probability and impact severity, the higher the emphasis should be on corrective actions. With priorities in place, mitigation measures may include:
- Changes in daily processes and procedures
- Isolation and elimination of the root cause of a potential threat
- Addressing non-compliance issues
- Implementing risk reducing engineering controls, when applicable
- Implementing proactive administrative controls or work place practices
- Establishing a process to identify inoperable or malfunctioning equipment and machinery through systematic inspections
- Developing or amending site specific Business Continuity Plans (BCP) to reflect vulnerabilities
An effective BCP is able to capture and maintain essential information for responding to unplanned incidents that cause business interruption. Being able to conduct business, despite uncontrollable circumstances, can ensure a company viability in the shadow of adversity.
The cycle of the business continuity planning should be incorporated into every business process. By instituting the following cycle, business interrupting events can be planned for and procedures can be implemented to maintain critical business processes.
- PLAN: Identify potential risks/threats, specialized trigger events, impacted business processes/activities, incident response structure, warning and communication process.
- ESTABLISH: Define parameters of business continuity strategy, communication and documentation processes, training requirements, detailed employee/ vendor contact information, and key vendor and/or supplier dependencies.
- IMPLEMENT: Initiate response checklists and potential relocation strategies in the event of business disruption.
- TRAIN: Train employees on continuity roles, responsibilities, and procedures.
- MONITOR: Verify equipment requirements, primary and alternate facility details, and application and software requirements.
- REVIEW: Analyze processes of the BCP to ensure critical business processes can be maintained.
- EXERCISE: Perform simulations to verify comprehension of the BCP.
- MAINTAIN: Update key details and processes if deficiencies and inaccuracies are identified
- OPERATE: Engage critical processes and Recovery Time Objectives, as necessary.
- IMPROVE: Incorporate the cyclical process in an overall business continuity program to continuously align a response to critical business processes and their associated risks.