The Economic Times

Every business faces risks most businessmen understand that and their success lies in managing it. Today risks have multiplied several fold and new risks are propping up every day Most of these risks are not covered as part of any planning process. To enable CXOs to plan their risks better ET organized a series of Business Forum with
Veritas in Delhi, Mumbai and Bangalore last month.

The objective of the ET Business Forum is to take up issues bothering top management. It is a forum for CXOs in a case study format. The environment is made as interactive as possible. This is in line with ETs goal to bring more value to its readers. The learning from the ET business Forum on "Business Continuity Planning: the risk ahead " and the case study's are condensed here. Business Continuity planning (BCP) has emerged as planning process to manage risks posed by the external environment. BCP tries to ensure continuity in the functioning of an organization in case of an attack by terrorists, or even a natural calamity etc. The process within BCP is quite similar to any other strategic planning process. It begins with identifying the threats that the organization faces. These threats and their impact is gauged on the functioning of the organization. The most serious threats in terms of its impact and likelihood of happening are identified.

The impact of these threats on the vital assets of the organization is then studied. These assets could be people, office building, IT infrastructure, manufacturing plants, communication links, and transportation etc. Almost every consultant worth its salt has an active BCP practice and can take a corporate through these steps. Though some corporates have chosen to do it completely on their own as they want to sensitize their own employees to these risks ahead. And one way of doing that is to involve them in one form or the other at the planning stage process itself.

The risk to people is one of the most important one and not many corporates have a policy on how to protect their employees. Though, it sounds a little harsh they have to ensure continuity within the organization in case it loses employees. Companies do plan succession in case am employee leaves but they do not plan for a worst case scenario in which it loses a large number some corporates have employed basic plans like not more than two or three employees will not travel in the same aircraft, car etc. The solution that BCP offers is to build redundancy for your vital assets after you have ensured they are adequately protected. Now redundancies can be and where from one per cent to hundred percent, depending upon the importance and the cost of the asset, A disaster recovery site can be created to ensure that there is a complete redundancy for all data. This may not be very. expensive and data is something that absolutely essential for the working of the ERP system of a corporate. The same cannot be said for people or manufacturing plants an hundred percent redundancy will make the business unviable. Therefore, a crucial component of BCP has to do a cost benefit analysis to ensure that the company does not over-spend.

The cost of building redundancies has to be evaluated and here almost every employee has to play a role. Sometimes some simple solution emerge like move your office away from an high profile building to a lesser-known address to reduce the risk of an attack. 

To have a an internal policy for evacuation in case of a fire and to protect the essential assets. In some businesses like IT enabled some redundancies like communication clients are now insisting links.

In other knowledge driven industries like pharmaceuticals the -R&D team expertise has to be replicated in the form of a knowledge management system. These solutions come out of Business Continuity Planning.