Posted by: kenwbudd | March 5, 2011

Business continuity considerations missing from major change programmes

A new international survey of over 600 organisations by the Business Continuity Institute (BCI) reveals that the majority of companies are failing to include business continuity considerations when making major strategic decisions.

The study, ‘Engaging & Sustaining the Interest of the Board’, which was sponsored by Deloitte, found that 75% of organisations surveyed had taken one or more of the following major strategic decisions, yet fewer than 16% applied business continuity management as an integral part of the decision making process, and in these cases, the original decisions were modified and/or new strategies explored as a result.

The strategic decisions and the (%) percentage of respondents who had done this had:

47%: in-sourced or outsourced a key business process
41%: Merged, acquired or divested part of its business
54%: Introduced a new product or service
62%: Carried out a significant re-organisation
40%: Changed a key activity or key business process
50%: Reduced costs through downsizing (e.g. people or facilities).

Lyndon Bird, Technical Director at the BCI, commented: “What we can determine from the study is that business continuity management is an essential part of protecting reputation and value in a crisis. What is missing, however, is the ex ante link into corporate decision making.

Business continuity management provides a robust foundation to enable a business to adapt to change, and pursue new opportunities with the assurance that potential unintended consequences have been duly considered.”

Rick Cudworth, Partner and Head of Resilience at Deloitte, commented: “The survey has provided strongly correlated evidence to suggest that where Boards are engaged, the breadth and value of business continuity to the organisation is far greater.

It also indicates that failure to include business continuity as an integral part of decision making means many businesses are missing the opportunity to improve their risk and resilience levels. What is worse, is that many decisions may actually increase the risk and reduce resilience levels. Meaning, they are not only, more likely to have to deal with a severe event but also suffer greater consequences later.”

A copy of the study report can be obtained from here after registration.

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