Business Continuity - PwC in the North

Could your business respond effectively to a disaster?

Large scale incidents and disasters that cause business disruption are occurring with increasing frequency. In 2011 alone, the UK was disrupted by severe weather, civil disturbances and public sector strikes, as well as being affected by the knock-on impacts (such as those to supply chain) of international catastrophic events such as the Japanese earthquake and tsunami.

Having a robust Crisis Management and Business Continuity Management (BCM) capability, with a defined set of plans which are regularly rehearsed will help reduce some of the impact of these disruptive events.

Indeed, the FSA require that Financial Institutions have suitable BCM arrangements in place, and this has been extended to include stress and scenario testing following the financial crisis in 2007, and have issued guidance to this effect.

What should Building Societiesbe doing?

A BCM programme requires Executive level sponsorship and buy-in to succeed and become embedded in the organisation and culture. It is also important to assign a BCM Manager role to drive the BCM development programme and coordinate subsequent activities such as testing, training and awareness initiatives.

Finally, BCM plans should be developed based on the principles of BS25999, the British Standard for BCM. As a key (and sometimes overlooked) starting point in developing BCM plans, organisations should perform a Business Impact Analysis (BIA) to formally identify what is critical to the operation of their business and the impact if critical activities are unavailable.

This then drives the Business Recovery Strategy and underpins the subsequent recovery arrangements that need to be put in place and to ensure that plans are aligned with the requirements and key priorities of the organisation.

The draft BIA should be sufficiently challenged and approved by senior management, to ensure that investment in BCM capability is directed in the right places.

It is also important to consider key dependencies, such as third party providers (for example, IT hosting and support providers) and other suppliers, as an incident could affect any part of the supply chain, and if there are gaps in your plans then it is likely this will have an impact across the business.

Managing reputational damage

Another vital element in responding to any disaster is to ensure that your business communicates effectively with the outside world. Crisis Management is essential: get it right and you can recover faster and even add value to the brand of your organisation.

However, get it wrong and you can make a bad situation much worse. Confidence can be won or lost very quickly, so this is all about getting the right person to communicate the right message to the right people at the right time.

Impact of 2012 events

2012 will be an exciting year for the UK, with the Olympics during July and August, the Queen?s Diamond Jubilee celebrations in June, and the Paralympics following on from the main games. These events offer

great opportunities for business, but they will also be disruptive. Road and travel restrictions will be in place in London and other parts of the UK up to the end of October, which together with general transport disruption, reduced staffing levels, stress on infrastructure, extra visitors and changes to the delivery and availability of key suppliers and services, will test your resilience.

Throughout 2012, we can expect a constant stream of disruption that will put pressure on operations, service levels and profitability. Businesses need to plan for disruption in 2012 whilst also making the most of the opportunities. With these events fast approaching, now is a final opportunity to revisit your BCM arrangements and put any required additional? contingency plans in place. Some questions to ask your business:

• Are you planning to reduce travel to London?
• Are UK based staff being encouraged to work from home or to take leave to reduce the impact of travel disruption (and will the technical infrastructure cope with increased home working)?
• Has your organisation?s travel security team considered the increased risks associated with such a major international event and issued guidance to travellers? ? What is your policy for staff who wish to watch the Olympic events on television or on-line?
• Are you planning to increase your workforce to deal with any additional demand?
• Do you have visibility over your supply chain and can you obtain assurance that your key third party services and supplies will not be affected?

?How can PwC help?

PwC can assist organisations at any stage in the BCM lifecycle. We have a team of specialists who have considerable experience in helping develop, reviewing and rehearsing plans for organisations in the Financial Services sector. We also have hands-on experience in BCM Programme Management, facilitating Business Impact Analysis workshops, Business Continuity Planning, Rehearsal Exercises, Crisis Management, Supply Chain Resilience, Integrated Risk and IT Disaster Recovery.

This allows us to be able to tailor a solution to meet the needs of any organisation of any size; from those with well established and embedded BCM functions, to those who don?t have a mature BCM function and respond to incidents as and when they happen.?

Key questions to ask

• How do you know that your Business Continuity Plans and arrangements will actually work during a disaster?
• ?Have you considered and planned for the impacts of the numerous key events in 2012??
• Do you have an understanding of what is strategically important to the business and dependencies??
• Does your organisation have accountability for Business Continuity Management, and has this been assigned to the right people??
• How do you manage the information and key messages during a crisis to raise confidence and limit reputational damage?

?Contact: Chris Willoughby: 07841 561 558 , Peter White: 07414 140 640

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