South African companies are facing an uncertain year ahead, and may well find themselves having to fall back on their business continuity plans – if they have any.
There is no doubt that the world is in a crisis that will continue into 2009 and even 2010. Far from a series of events that will affect only parts of the world, the current crises affect everyone to some degree, says Allen Smith, CEO of ContinuitySA.
"Whether it's an economic recession, crumbling infrastructure, lack of skills, social unrest, failing health standards or any combination of these events, 2009 in South Africa is certainly going to be the year business continuity plans are put to the test," he says.
"There are, of course, always issues that force organisations to implement their business continuity plans, but we are at a unique junction in South African history. The coming year will be one in which continuity plans are more likely to be put to the test than at any time in the last decade or more."
Smith believes the following make up the top 10 issues businesses will face in 2009 that will cause them to invoke and test the efficacy of their business continuity plans.
* 2009 general election coupled with split in ANC – Elections are always a sensitive time in South Africa as parties vie for attention and votes. The election in 2009 will be even more volatile because of the split within the ANC. Already there are signs of friction and this is set to potentially increase.
* Effect of the global recession and the impact on South African society – While South Africa may be less affected by the recession, it is not immune to its consequences. The fall in commodity prices may lead to job losses and this, combined with the increase in food prices, could see more volatile unemployed people resorting to mass action or violence, which could affect the operations of businesses in the affected areas. Companies must ensure they continuously monitor the global and local socio-political landscapes.
* Threat of pandemics – The threat of a pandemic has been looming large for a while. However, as the latest Arena virus outbreak has shown, you can never relax in preparations for a pandemic. When it strikes it will not wait for a convenient time, nor will it provide a warning to allow companies to prepare. It is highly advisable that local companies ensure they have a pandemic aspect to their business continuity and crisis plans.
* 2010 Soccer World Cup and general infrastructure disruptions – We've all but adapted to the never-ending roadworks and sinkholes, but it will only get worse and there will be even more people on the roads than ever before. Getting to work in 2009 may be more difficult than ever. Companies are advised to look at worker's travel patterns and to plan accordingly for workers who could be caught up in traffic congestion. New bus services are also planned to integrate into Gautrain when it goes live and this could create unrest among taxi drivers, who often disregard the law, and it is possible that they could start a campaign to cause traffic disruption as they have done in the past. Business will have to add this scenario to their radar screens.
* Skills flight from SA – The skills issue won't go away. Business is in a global fight for skills and South Africa is not in a position to create enough new skills to make up for those being lost. The country is also unable to attract sufficiently skilled people from external sources. In light of this, companies need to ensure that they have sufficient succession planning in place for all key employees.
* Non-delivery of basic services – Ignoring the human factor prevalent in non-delivery of services, this failure on the part of government is fertile breeding ground for criminals and those wishing to disrupt social order. The effect of their actions can hinder business by harming infrastructure or employees, or preventing them from getting to the work place. Companies are advised to ensure that they have factored denial of access scenarios into their business continuity plans for next year.
* Climate fluctuations – Climate problems are another global phenomenon we all have to get used to. Companies need to ensure that they have the necessary contingency plans in place next year to deal with everything from flooding due to excessive rain to riots due to food shortages.
* Continued power and infrastructure challenges – Eskom's popularity will be dented once again should the talked about blackouts return in 2009, but it's not about the inconvenience or endless traffic jams. Lack of electricity hinders business from competing effectively and this can be the death knell for smaller businesses. Most companies are prepared to handle a few hours of blackouts every few days, but what happens if the blackouts last for days?
* Companies ignoring increased requirements for enterprise risk management (ERM), business continuity management (BCM) and corporate governance. The current fallout from the world financial crisis will have a significant effect on the regulatory environment relating to absolute compliance to corporate governance, risk management and BCM. Companies will be required to prove they have excellent ERM and BCM and measurement of this, a relatively new development , will become critical, particularly to MD's of companies who will be held liable and face greater penalties in the future. The companies act will start to bring some of this regulatory environment to private companies who have previously been immune or oblivious to such issue. This legislation will substantially increase the accountability and penalties applicable to directors of companies, even those not listed on the stock exchange. There is no longer any excuse to ignore governance, business continuity or risk management principles and practices. In 2009, companies must expect to be put under pressure to become more compliant and strengthen their risk management and business continuity undertakings.
* Crime, corruption, civil unrest and illegal immigration – These are old South African stalwarts and are unlikely to change in 2009, with the exception of an increase in civil unrest due to the new breakaway political party. The potential impact of these issues on business always needs to be calculated and incorporated into continuity plans.
The above are only 10 possible issues that may affect local business in 2009, says Smith. Business continuity is the process of ensuring a business's critical operations continue no matter what.