Managing business after disaster

SEPT 11, the London bombing, Hurricane Katrina and closer to home, the Johor floods and more recently, the spate of landslides. What do all these disasters have in common?

PricewaterhouseCoopers senior executive director Ong Ai Lin said these disasters underscored the importance of companies having in place a business continuity management (BCM) programme.

“Otherwise, companies risk losing market share and getting back on their feet in the shortest time possible post-disaster,” she told StarBiz.

Ong said BCM was gaining importance among local companies but its implementation varied by sectors, with the most comprehensive programme in the financial services, multinational oil and gas corporations, telecommunications, airline and aerodrome operators, while implementation in other sectors was more ad hoc.

Ong said BCM has three components: crisis management, immediate response and the recovery phase, which consists of the recovery of business operations as well as information technology (IT) systems.

“People and not technology are the most important elements as they can still run the business if they know what to do.

“An alternate location for the business comes second, followed by an action-driven plan,” she said, stressing the importance of continually exercising the plan by conducting BCM exercises and tests such as crisis simulation exercises.

Malaysia Airports Holdings Bhd recently successfully conducted a BCM simulation exercise for KL International Airport.

The exercise on Oct 31 is believed to be the first and largest of its kind for an airport in this region.

The exercise simulated the closure of the key passenger terminal due to a catastrophic incident which called for operations to be resumed at another terminal.

It involved about 600 participants, including six major airlines and eight airport agencies, and lasted four hours.

Ong pointed out that BCM was not about writing procedure manuals and testing the IT back-up system but about business strategy and key priorities in a disaster.

“For BCM to be effective, the top management of an organisation must recognise its importance to ensure that it is embedded in the organisation’s culture.”

The first thing a company should do, Ong said, was to establish a BCM Recovery Organisation structure to provide an effective chain of command and control in a disaster. Roles and responsibilities should be clearly defined with alternates in place should the named people not be available.

Ong said a company should then perform a business impact analysis to identify its key processes and the timeframe for these processes to be up and running in a disaster. Once the objectives are identified, the company can then develop a strategy to achieve them. The next step is to formulate an action-driven plan.

Ong said there was increasing realisation that disasters might not only be confined at enterprise-level and that Government and industry efforts were required to address geographic disasters such as floods, landslides, earthquakes and those that were industry-wide.

“Consideration should be given to the establishment of a national threat level for disasters and industry initiatives such as industry-wide crisis simulation exercises,” she added. For latest Bursa Malaysia indices, charts and other information click here

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