Expecting the Unexpected
A recent survey of business continuity planning in the UK has shown that businesses are sitting up and taking notice of the wide range of threats that have emerged in the past year. Companies are now taking action to ensure they are prepared for whatever is thrown at them.
“Planning for the worst”, the 2012 Business Continuity Management (BCM) Survey, is available free from the Chartered Management Institute (CMI). It shows that the number of organisations with formal plans in place rose last year for the third year running. Over 60% of managers now report that they work for a business that has BCM in place, compared to 58% in 2010.
In 2011, winter weather was again the most common cause of organisational disruption, causing problems for 82% of managers. Other significant business disruptions included the public sector strikes (55%), the Blackberry outage (39%), the summer riots (26%), natural disasters such as Japan’s earthquake and tsunami (19%), and international social and political unrest such as the Arab Spring uprising (18%).
A massive 81% of managers who activated their business continuity plans last year agreed it reduced disruption and therefore many consequently planned ahead to minimise the impact of the Olympic Games this summer.
Surprisingly, the survey found that only a fifth of managers expect their business critical suppliers to have a BCM system in place, and only 7% expect all of their suppliers to have systems in place. However, company strategies are now beginning to recognise the importance of supply chain resilience.
Reduced Insurance Premiums?
In another survey undertaken by the British Insurance Brokers’ Association and the Cabinet Office, business continuity plans have been shown to reduce insurance premiums and can save businesses from ruin after a major disruption such as a flood or fire.
The majority (96%) of respondents believed that having a business continuity plan could keep businesses trading or reduce the costs they would incur. An additional 62% said that they could benefit from insurance premium discounts, reduced excesses and access to new insurance markets.
These beliefs were backed by insurers, with 83% agreeing that they would provide a discount or improved insurance terms to a business interruption policy if a company had a business continuity plan in place. The survey showed that 74% of all emergencies against businesses were water (41%) or fire-related (33%).
Since small businesses appear to be most at risk from the effects of a major disruption and are also least likely to have a plan, this survey confirms the need for simple guidance on business continuity aimed at smaller firms.
Make sure you’re not left at risk when it comes to the unexpected. See our checklist above.