This year was marked by an increasing understanding among some executives of the need to have comprehensive business continuity plans in place. This changing attitude was caused by the realisation that it doesn’t take a terrorist attack to put your business at risk, something as simple as a burst water pipe can make an office unusable.
Jorgen Nielsen, director of ContinuitySA, explains that a business can be paralysed by seemingly insignificant events beyond its control. “A case in point was a recent client of ContinuitySA which had its offices gutted by the fire department.
“A co-tenant in the building this client was housed in called the fire department after a fire broke out. The problem was quickly resolved, but the water used to put out the fire flooded this company’s call centre below, making the location and all electronic equipment in it unusable.”
Fortunately the call centre could be relocated to the offsite emergency centre at ContinuitySA’s premises and business went on as usual. Without a business continuity plan, this company would have lost millions.
Looking ahead at 2008 and beyond, Nielsen believes there are 10 business continuity challenges South African companies must be prepared for.
* Greater strain on the national utility grid: No prizes for guessing the first problem. Rolling blackouts are and will remain a reality, growing in frequency until 2012 when a new power station is brought online and, hopefully, outdated equipment is replaced.
* Continued danger of in-sourcing: DIY is fine when you’re painting the garage, but an effective business continuity plan must be developed with objective, unbiased input and expertise. Additionally, it pays to train external experts to step in and handle an emergency, in case trained people within the company are unable to assist due to injury or death.
* Increased organised labour activity: More militant union activity is almost a guarantee over the next few years, linked to the presidential succession battle and other social issues. Business needs to have a plan of action if access to its premises is blocked for an extended period of time.
* Political succession debate: The battle for the presidency could possibly spill over into public demonstrations and sporadic cases of civil disobedience if certain people don’t get their way. Once again, continuity plans must take this possibility into account.
* Poor understanding of business continuity at boardroom level: International pressure is forcing company boards in South Africa to come to grips with business continuity. While there is a greater realisation across all industries that executives need to ensure their business continues no matter what, there are still directors of companies that do not grasp the fundamentals of business continuity.
* Poor business continuity planning: It’s easy to plan for a fire, or so most people think, but effective business continuity is a complex process. Expert knowledge of the process is required if a business continuity plan is to deliver results.
* International business tightening up on governance processes: As international governance regulations take effect, local subsidiaries and suppliers will have to prove they are able to handle disasters without disrupting the supply of goods to their customers. Stricter international guidelines and standards from a business continuity perspective can be expected over the next few years.
* Corporate responsibility for poor business continuity: There is increasing legislation affecting corporate business continuity decisions. We are not aware of any incidents in SA where if a business fails because the executive did not make business continuity plans then these leaders are guilty of negligence. New governance laws that will see the light of day in 2008 and 2009 could make this negligence a criminal offense.
* Increased pressure on South Africa’s logistics networks: There is chaos on all South African transport networks. Business continuity plans need to take cognisance of the fact of overburdened and poorly serviced networks and plan accordingly.
* Lack of suitable skills: The skills shortage is a fact of life in every aspect of South African business and it will only get worse. Continuity plans need to include processes and methodologies for keeping the business running with a limited staff compliment. Training of up and coming staff requires a special focus.