Tag Archives: IT Outages

“Businesses facing high costs of supply chain disruption” states BCI’s research

Business Continuity Institute (BCI) research has exposed the high costs that businesses are facing as a result of supply chain disruptions in this increasingly interconnected world. Nearly a quarter of businesses surveyed have suffered from disruptions within the past year that cost in excess of €1 million, with 40% of them not having sufficient insurance to cover those losses. 20% were only insured against half of these losses.

Organisations simply cannot bury their heads in the sand and pretend an incident will never happen to them. The BCI survey shows that 76% of respondents had experienced at least one supply chain disruption during the previous twelve months, yet a quarter of respondents (28%) still had no business continuity arrangements in place to deal with such an event.

Supported by global insurer Zurich Insurance Group, the BCI report concludes that supply chain disruptions are costly and may cause significant damage to an organisation’s reputation.

While the survey results indicate a growing awareness of business continuity and its role in ensuring supply chain resilience, many organisations have yet to improve on their reporting and business continuity arrangements. Budgets for business continuity and ensuring supply chain resilience are often slashed in favour of other priorities, but this latest study demonstrates why such a move is often found to be an unwise course of action.

With the growing cost of disruption worldwide and the potential reputational damage caused as a result of failing to have appropriate transparency in the supply chain, investments in this area are essential and can make the difference when disaster strikes.

Business Continuity Institute research has exposed the high costs that businesses are facing as a result of supply chain disruptions in this increasingly interconnected world

Business Continuity Institute research has exposed the high costs that businesses are facing as a result of supply chain disruptions in this increasingly interconnected world

Further findings from the research are as follows:
• 78.6% of respondents don’t have full visibility of their supply chains
• Only 26.5% of organisations co-ordinate and report supply chain disruption on an enterprise-wide basis
• 44.4% of disruptions originate below the Tier 1 supplier
• 13% of organisations don’t analyse their supply chains to identify the source of the disruption
• The primary sources of disruption to supply chains in the last 12 months were unplanned IT and telecommunications outages (52.9%), adverse weather conditions (51.6%) and outsourced service failure (35.8%)
• Loss of productivity (58.5%) remains the top consequence of supply chain disruptions for the sixth year running
• Increased cost of working (47.5%) and loss of revenue (44.7%) are also more commonly reported this year and round out the Top Three
• Respondents reporting low top management commitment to this issue have risen from 21.1% to 28.6%. This is a worrying finding as low commitment is likely to coincide with limited investment in what is a key performance area
• The percentage of firms having business continuity arrangements in place against supply chain disruption has risen from 57.7% to 72.0%. However, segmenting the data reveals that small and medium-sized enterprises (SMEs) are less likely to have such arrangements in place than large businesses (with scores of 63.9% and 76.2% respectively)

Commitment to business continuity

Lyndon Bird FBCI, technical director at the BCI, commented: “Should we be alarmed by some of the figures revealed in this survey? Perhaps so. Should we be surprised by them? Probably not. As long as organisations are failing to put business continuity mechanisms in place, and as long as top management is failing to give this issue the level of commitment it requires, supply chain disruptions will continue to occur and they will continue to cost organisations dearly. In our globally connected world, these supply chains are becoming ever more complex and more action is needed to make sure that an incident in one organisation doesn’t become a crisis for another.”

Nick Wildgoose, global supply chain product leader at Zurich Insurance Group, commented: “Top level management support is fundamental to driving improvements in supply chain resilience. I’ve witnessed the significant disruption cost reductions can have in this area. This should be regarded as a business change programme in the context of driving value through supplier relationship management and becoming the customer of choice for your strategic suppliers to improve your business performance.”

Now in its sixth year, the BCI’s annual Supply Chain Resilience Survey has established itself as an important vehicle for highlighting and informing organisations of the importance of supply chain resilience and the key role it plays in achieving overall organisational resilience in today’s volatile global economic climate.

The outcomes of previous surveys have provided organisations with critical insights and valuable information to support the development of appropriate strategic responses and approaches to mitigate the impact and consequences of disruptions within their supply chains.

In terms of this year’s online survey, 525 respondents emanated from 71 countries working in 14 SIC industry sectors. The majority of respondents were from outside the UK.

A major survey from State of Flux – entitled: ‘2014 Global Supplier Relationship Management Research Report’ – was published on 6 November and reinforces the importance of this area as part of overall business performance.

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BCI: “Don’t wait for an emergency to prepare an emergency communications plan”

A newly-published report from the Business Continuity Institute (BCI) highlights the fact that, while overall results indicate a good uptake of emergency communications planning, a significant minority of companies remain passive or have difficulty securing management buy-in.

Supported by Everbridge, the report concludes that emergency communications remain an essential part of any business continuity programme. This research demonstrates that, while a great majority of companies are aware of the importance of such communications, there are some gaps in implementation that demand to be addressed.

In order to be effective, emergency communications plans must be continuously updated to reflect the risks that a business faces and embedded well enough within the organisation. Relevant training and education programmes – as well as ensuring top management buy-in – are necessary in promoting a culture of awareness and reducing the risk of communications failure during incidents.

It’s worrying to note that, among those organisations without an emergency communications plan, two-thirds (63.4%) of them would only consider adopting one after a business-changing event. Something akin to shutting the stable door once the horse has bolted. This could have dire consequences as previous BCI research suggests that business-affecting events may often severely affect an organisation’s viability.

A newly-published report from the Business Continuity Institute highlights that, while overall results indicate a good uptake of emergency communications planning, a significant minority remain passive or have difficulty securing management buy-in

A newly-published report from the Business Continuity Institute highlights that, while overall results indicate a good uptake of emergency communications planning, a significant minority remain passive or have difficulty securing management buy-in

Further findings from the report are as follows:

• In a sign of growing awareness, only less than 13.5% of organisations surveyed do not have an emergency communications plan in place
• Emergency communications plans are quite comprehensive in their scope. At least 70% of organisations have plans covering the following threats: IT outages (81.2%), fire (77.8%), power outages (76.2%), weather-related incidents (75.6%), natural disasters (74.9%) and security-related incidents (70.0%). These mirror the top three causes of business disruption as reported by respondents in the last 12 months: IT outages (59.8%), power outages (51.6%) and weather-related incidents (47.2%)
• Almost one fifth of respondents (18.7%) belong to organisations where more than 500 staff members travel internationally on a regular basis. More than 30% report travelling to ‘high risk’ countries
• Almost two-thirds of companies (64.7%) report having training and education programmes in place related to emergency communications. Most have regularly scheduled programmes (64.2%)
• Around 15% of organisations regularly schedule exercises of their emergency communications plans. Most schedule their exercises once a year (55.8%). This is a worrying finding considering that almost half of organisations (49.6%) are likely to invoke their plans more than once during any given year
• More than 70% of organisations take 30 minutes or less to activate their emergency communications plans. Nonetheless, more than a quarter of organisations (27.4%) do not request responses from their staff in the event of an incident or have defined acceptable response rates (28.2%)
• Social media appears to play an important role in an emergency communications plan. 42% of respondents report using social media to monitor their staff during emergencies and almost a third (31.6%) use it to inform stakeholders

Benchmarking of arrangements

Patrick Alcantara, research associate at the BCI and author of the new report, commented: “This survey is seen as the first step towards benchmarking an organisation’s emergency communications arrangements. It’s hoped that it will allow companies to take a second look at their emergency communications capabilities and introduce improvements that will rebound to their benefit. Given how emergency communications may improve survival during extreme situations, it’s important that organisations take heed and aspire towards a robust capability before it’s too late.”

In a sign of growing awareness, only less than 13.5% of organisations surveyed do not have an emergency communications plan in place

In a sign of growing awareness, only less than 13.5% of organisations surveyed do not have an emergency communications plan in place

Imad Mouline, CTO at Everbridge, added: “Fluctuating global threat levels, sophisticated cyber attacks and an ever-growing mobile workforce present increasingly diverse and complex risks to business interests. In this unpredictable environment, business continuity practitioners are consistently faced with the challenge of planning for the unexpected while ensuring the safety of their staff and communities and protecting their businesses from both financial loss and reputational damage. Undoubtedly, this survey provides a benchmark for emergency communications planning.”

This is the first dedicated piece of research into understanding the emergency communications plans of a wide range of organisations and learning how they’re integrated within wider recovery programmes. The results support the anecdotal feedback from the industry, demonstrating that such plans form an established and vital element of continuity plans for medium-to-large size enterprises while also offering some practical ideas for those looking to improve their capabilities in this area.

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