Business Continuity Management - British Red Cross - Assignment Example

BUSINESS CONTINUITY MANAGEMENT BRITISH RED CROSS Table of Contents 1. Introduction - 3 2. Stakeholder Analysis - 3 3. Five Stakeholders (Importance and Relationship) - 6 4. Four Critical Processes - 10 5. 10 Generic Questions for the Four Critical Processes - 14 6. Conclusion - 15 7. Bibliography - 16 1. Introduction Having a business continuity plan is a good management practice, and supports the aims and needs of good corporate governance. It can help identify the critical areas, which need to be preserved, and so increase the chances of surviving for the future. The British Red Cross is a non-governmental organization that operates nationally and internationally. The Civil Contingencies Act (2004) requires the British Red Cross to have a business continuity management or BCM because they are working closely with Category 1 and 2 responders. In order to identify factors that can influence or are important to the success and critical to its business processes whose continuation is vital to the survival of the organization, a stakeholder and business impact analysis is required. This report is an analysis of BRC’s stakeholders and business processes for the development of BCM. 2. Stakeholder Analysis The environment of any organization is comprised of a variety of stakeholder groups who have vested interest in the performance of the organization. Interdependencies exist among the organization, its employees, customers, investors, communities, the government and other stakeholders. It is crucial for an organization to understand the values and expectations of each stakeholder group in order to determine their willingness to either help or hinder the organization in striving towards its vision. Positive matching of the needs and objectives of stakeholders and the organization is therefore required for a lasting relationship. Stakeholders therefore need to understand their contribution in working with the organization to build mutual value continuously. Organizations must develop and align the chain of relationships needed to address the changing demands of their business. Business continuity plans need to cover the whole organization. The objectives of business continuity planning can range from the minimal maintaining business operation in survival mode to enabling ‘business as usual’ or restoring business services. Business continuity planning has two main planks. First is ensuring technical continuity and second, ensuring the appropriate management processes are in place to enable business continuity. To assist with usability, business continuity plan helps to structure the plans based on the types of threats or boundaries the plans cover. Consequently, the organization needs to look in three main areas such as internally at the business process and systems, and externally at how these are supported by suppliers and customers (Office of Government Commerce Staff 2002, p.89). Stakeholders are individuals and groups who are actively participating in the project and those who are positively and negatively affected by the project. A stakeholder can be ‘internal’ or ‘external’ and if we include the later, the project will have a considerable number of stakeholders. Most of these stakeholders are probably in support of the project but some may be opposed to it thus it is important to identify the level of interest and influence of stakeholders. It is helpful for the project manager to regard the project as coalition of stakeholders, which means a network of individuals and groups who intend to create something together. A systematic stakeholder analysis can help to ascertain the organization’s recovery priorities and can act as a valuable tool for communicating the importance of business continuity and for re-educating sceptical managers and functions (Elliot et al. p.89). A framework for stakeholder analysis should consider who the organization’s stakeholders are, the goals of stakeholders with regard to the organization, the likely action to the types of interruption that could be encountered, and ways in which stakeholder relationships can be managed during an interruption. Thus during the stakeholder analysis, it is very important to identify the stakeholders and describe their relationships to the project, especially there are of interest, the kinds of contribution the project needs from them, and what they expect in return from the project. It should also look at what kind of power the stakeholders possess and what they may do if they disagree with project results and processes. Fig. 1 BRC’s PRIMARY STAKEHOLDERS Suppliers Employee Volunteers Donors Victims Organization Various/External Internal Internal /External External External Role on project Support Support Support Support Beneficiary Unique facts Essential to daily operation Highly motivated Highly motivated Interest Level Very High High Very High Very High High Influence Level Very High Very High Very High Very High Very High How to effectively manage relationship Constant communication and interaction Make them feel needed and important to the success of projects. Make them feel important and assure them of your support. Make them feel honoured and respected. Let them see your sincerity and will to help. 3. Five Stakeholders (Importance and Relationship) a. Suppliers Suppliers are influential to the degree to which they can exert their bargaining power over customers downstream in the supply chain (Elliot et. al. 2002, p.91). Suppliers provide an organization with its input and expect to be paid within a reasonable amount of time. If the organization consistently delays payment, this practice can hurt a supplier’s cash flow and threaten its very survival. Consequently, a supplier may refuse to spend their resources to develop the kinds of product the organization needs or may secretly reduce the quality of the inputs it provides (Jones & George 2003, p.82). In contrast, when organization and their suppliers trust each other, the cost of monitoring and managing contracts are low. Organization experience less conflict with their suppliers, resulting in few legal suits, and there is a heightened capacity for innovation. Organization with this kind of relationship with its suppliers has a competitive advantage over firms that do not have trusting relationship (Svendsen 1998, p.29). b. Employee Like all stakeholders, employees take on a peculiar role among stakeholders as they are closely integrated into the organization. They are the most important production factor or resource of the organization and they benefit from the existence of their employers, and are somewhat clearly affected by the success or otherwise of their organization (Crane and Matten 2007, p.267). Research shows that employee satisfaction depends on the qualities of trust and integrity that bind individuals to organizations. The key indicators of an organization’s success depend on employee satisfaction and in turn, satisfaction depends on trust and confidence in leadership. Satisfied employees are associated with higher revenues, lower cost, and greater profitability (Lamb et al. 2005, p.9). Employees are a central stakeholder of the organization to the extent that the organization fosters a feeling of commitment and loyalty within its workforce, the organization benefits. Employees are proud to work for an organization with an ethical reputation, a sense that carries over into the quality of work that is produced (Werther & Chandler 2006, p.119). c. Volunteers Organizations may face the challenge of balancing their interactions with members or volunteers who have offered different levels of support to the organization. Organizations require ways of expressing appreciation for large and small levels of support so that neither group feels slighter, while also maintaining ways for both groups to offer input and feedback. Volunteers may become more than committed to the organization’s mission that they would invest not only their talents but also financial resources. Organizations are morally accountable to stakeholders and failure to do so may run the risk that some volunteers may withdraw its support. When organization losses a volunteer, they may also lose the only person that held the tacit knowledge required to complete the work (Caroll 2009, p.183). d. Donors Although numerous members of charitable organizations are involved in fund raising activities, it is the relationship with donors who needs more focus to ensure a continuing income of gifts. Non-governmental organizations may need to ensure good relationships with donors and sometimes they may or many not agree with donor’s priorities or what donors propose. The donor-NGO relationship has a further and more dangerous impact. Even when donors are offering something useful and the NGO have helped shape the decision on how it might be delivered, the donor-NGO relationship too often leads to a lack of commitment by the NGO, and even to resentment, both of which are ‘demotivating’ (Parr et al. 2002, p.12). Donors can influence many things and it can create conducive conditions for responsible charity works. Donors can also help raise awareness of rights and norms and ensure that each stakeholder group is properly represented (Huniche and Pedersen 2006, p.172). In fact, donors may have accountability concerns over an NGO and they may need to convince of several things. Developing a relationship with donors is the key to success in fundraising. As donors are largely honest and intelligent people, a process can only be done with honesty and intelligence. However, neglecting the relationship can be very devastating, as this would severely affect the flow of gifts. Donors are donors because they care enough to take action and support an NGO’s cause thus letting them see that an organization care would encourage them to go even further for the cause (Burnett 2002, p.44) e. Victims Red Cross ha multiple stakeholders and one of them are the victims (Hearit 2005, p.162). The victims are the most affected and beneficiaries of gifts and relief, and actions of an NGO in the wake of an incident. Victims of incidents or conflicts should not be looked upon and addressed merely as victims but as stakeholders (Organization for Economic Cooperation and Development 2001, p.57). Victims or beneficiaries look for sustained commitment, and an appreciation that effective programmes will balance material and intellectual support. They also attached equal importance to a relationship of trust, noting that the success of projects often turned more on the people involved that on the methodology employed or even the funds granted. Charitable works is sensitive and affect the lives and interests of beneficiaries far more than those of donors and other stakeholders (Mokhiber 2000, p.67). When the integrity of a NGO is compromised and in consequence, the public perception of the NGO is damaged. Once the NGO has lost its legitimacy as value broker in the eyes of the public, it will be unable to confer legitimacy by association even with corporate. NGOs are service organizations that should deal with their clientele like private enterprises to the clients and beneficiaries. “NGOs are essentially accountable to the public” (Riley 2002, p.70) 4. Four Critical Processes A critical process is usually defined as a process whose interruption would cause a material financial and operational impact over some period. Each major business area, function, and discipline should be identified and prioritize. As part of the critical process assessment, particular emphasis must be places on information systems and resources. a. Communication Communication may take place between units of very different size and complexity. It may occur between and within individuals, groups, organizations, social classes, nations, countries and regions of the world. Obviously, the character of communication varies with the size and complexity of the communicating units. The distance in space and time between the communication units is also very important (Rosengren 2000, p.5). Every person in the organization has different information needs and preferred channels for receiving it. Effective communication is important for focusing a team to a goal and the more people involved with the project, the greater the need for communication (Wallace et al. 2004, p.21). During a crisis or disruption, a business continuity plan must make sure that all stakeholders, critical suppliers, and others are kept informed. During this period, the focus is to communicate status information and immediate needs. People need to feel that the situation is under control and being properly handled. Thus without time communication, it is human nature to grow restless and distrustful (Cannon et al. 2008, p.486). Common areas of exposure to a disaster include telephone communications and computer processing. Telephones are often taken for granted but they are important medium of communication and should be considered in continuity planning (Myers 2006, p.1). Communication capability is one of the most critical aspects of business continuity (Go & Leo 2005, p.88). Telecommunication service, both data and voice networks, are key components for success in any organization, so it must also play an integral role in a company’s business continuity plan. After a disaster, accurate and immediate information is critical, only then can good decisions be made. Therefore, a business continuity plan must consider such scenarios as having a local telephone network sustain damage. In this case, not only voice, but also paging, faxing, cellular, and data communication services may be affected. The communication portion of a business continuity plan thus needs to consider the following options. Alternate means of communication such as cellular phones, beepers, two-way radios, and written communication. They must have procedures to let employees know where to meet and who to call for specific instructions. Finally, telecommunication back up equipment and procedures (Doughty 2000, p.381). b. Computer and Data Processing The British Red Cross like many organizations handles data including financial information using computers. They cannot operate for more than a day or two without computer processing, as they need this capability to service transactions. It is therefore necessary to ensure a fail proof processing and this may include adequate back up system and technical and operational recovery procedures outside the computer centre. Disaster recovery considers the loss of computer-related, network facilities, and provides alternatives for data processing at other locations. Because computerized information processing is the lifeblood of many organizations, the protection of computer processing capability is no longer the sole responsibility of the data processing manager but the whole organization (Myers 2006, p.2). Traditionally, disaster recovery planning grew out of a need to ensure that data processing could continue even if the data centre was not available. Thus, it is useful to make some preliminary decisions about what can be done. For instance, if the perceived threat is one of loss of electrical power to a computer, the response could be to route an extra power supply to the computer via an entirely different route. This ensures that power will still be available, even if one of the supplies is damaged. This can be done also by installing an emergency power supply, which can take over immediately if the normal power fails or have an arrangement whereby the computing work can quickly be transferred to another computer in a different building. c. Supplies Managing vendors or suppliers in the aftermath of a disaster is critical (Wallace et. al. 2004, p.261). It is therefore necessary to focus an organization’s business continuity planning on suppliers that have the largest impact on the organization’s recovery efforts and they are the most critical to the support of its business. Capacity constraints of suppliers involve the inability to produce the required amount of goods as demanded by the organization. If a disaster occurs and demand increases sharply, will the supplier, be able to cope at short notice? Factors such as the size of the supplier’s operation or the acquisition of additional raw materials, or even the training of extra staff may all lead to a disruption of the supply chain (Reuvid 2005, p.48). d. Services Delivery Critical business functions or essential services are those that are deemed essential or critical to an organization’s operations. For the British Red Cross, these can be services to external stakeholders. Although this organization is intended to make no profit, it provides services to somebody else, and has built an operational structure to enable the organization to do so. The British Red Cross is equally at risk from the effects of a disaster that interrupts their operation and they should consider BCM if they are to optimize their chances of successful resumption of business following an interruption. Disasters usually have significant impacts on the public health and well-being of affected populations. The public health impacts maybe described as direct or indirect. These indirect health impacts are usually related to factors such as inadequate quantities and quality of water, breakdowns in sanitations, interruption in food supplies, and disruption of health services. Continuation of health services is therefore very important and the British Red Cross should ensure that services delivery would continue when a disruption occurs. 5. Generic Question for the Four Critical Processes 1. What is your department and what is your function? 2. What are most critical functions of your department or unit? Which of these functions would need to be recovered first, either at an alternative site or reconstructed at the original site? 3. What actions should be taken to recover these functions? 4. If these tasks for the recovery of the various functions are dissimilar, how many separate recovery teams would be necessary to implement these tasks? 5. Who would you select as team leaders and alternate leaders for these teams? 6. How much time is required to reconstruct records or backlogged work once your function is back in operation? 7. What customers (internal or external) or other business activities would be affected by the inability to deliver or perform your function? Describe the extent of the impact and estimate the amount of time before the impact would affect the customer. 8. Where would or could the organization go to perform this function if employees were unable to gain access to the current location? 9. Where can you obtain other required services, products, or raw materials if access to your present supplier ceased? 10. Can you depend on the resources of similar functions at other company locations? Please state the names of the units, sites, and office locations. 6. Conclusion Management should have a good business continuity plan that can support the whole organization in time of disruption. Identifying the critical areas that would be affected is essential to increase the chances of survival. The British Red Cross like any other organization needs a business continuity plan, as continuation of its critical process is vital to its existence. A systematic stakeholder analysis can help to ascertain an organization’s recovery priorities as it can teach us which stakeholders are likely to be affected by the interruption and the ways in which stakeholder relationship can be managed during an interruption. The British Red Cross has five primary stakeholders- suppliers, employee, volunteers, donors, and the victims themselves. The four critical process of this organization are communication, computer and data processing, resources or supplies, and services delivery. 7. Bibliography Burnett Ken. 2002. Relationship fundraising: a donor-based approach to the business of raising money. John Wiley and Sons, US Cannon David L., Bergmann Timothy S., & Pamplin Brady. 2008. CISA Certified Information Systems Auditor Study Guide. 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