Why should businesses invest time and money into Business Continuity when we are in a recession? Most organisations are still looking for ways to reduce costs and Business Continuity can often be seen as a cost with no benefit.
The answer of course is risk management and the recession has highlighted some areas where businesses may now be taking increased risk.
For example, why did Zavvi the CD retailer fail? Was it because CD sales are suffering against the onslaught of downloading, or was it because Woolworths failed? A major competitor failing would normally be seen as an opportunity, but unfortunately for Zavvi, Woolworths also owned the distributor that supplied both Woolworths and Zavvi. So when Woolworths failed, Zavvi lost its major supplier and could not replace the supply quickly enough in difficult trading conditions and consequently Zavvi failed as well.
This type of supply chain risk has increased as the recession has deepened. How many organisations have reviewed their key suppliers and investigated alternatives?
In a recent ICAEW and SunGard survey 70% of respondents believed that they were at more risk from damaging supply chain issues compared to 12 months ago.
So the recession has clearly added to the supply chain risk and there are other areas of increased risk.
Business continuity is all about managing the major risks that a business might face, so given that the recession has added to these risks, then Business Continuity Management is as important in a recession as at any other time, it is just the risks that require managing that have changed.
Mike Hill – Head of Commercial Services – Itica Consulting – October 2009
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