Business Continuity for Fishbowl Company - Example

Business Continuity Plan for Fishbowl Company Student’s Name Institution Course Date Table of Contents Table of Contents 2 Organization’s Background 3 Introduction: 3 Stakeholders: 3 Suppliers: 4 Premises: 4 What & how they do it: 5 Who they do it for: 5 Why they do it: 5 Resources - human assets: 6 Legal framework: 7 Statutory requirements: 7 Political interference: 7 Critical Activities: Products & Services 7 Risk Assessment: 8 Maximum tolerable period: 10 Critical dependencies of the company 10 How to monitor these dependences: 12 How to deal with the losses of dependencies: 13 Plan Activation 14 Activate the plan: 14 Crisis response planning team: 14 Evaluation and testing 15 References 17 Organization’s Background Introduction: Sainsbury’s was founded in 1869 and today operates over 1,000 stores, including 440 convenience stores and employs around 150,000 colleagues. It was started by John James Sainsbury and his wife Mary Ann Sainsbury. Sainsbury has grown tremendously to become ONE of the largest retailers in the UK. The company has put their customers at the heart of everything they do and have invested in stores, colleagues and channels to deliver the best possible shopping experience. The identity of the company is defined by strong culture and values which are integral segments of the company’s success. Notably, the last decade has been so significant in the history of the company. The financial performance of the company has been amazing for the last decade. Stakeholders: The success of this company is greatly accredited to the overwhelming support the company draws from its various stakeholders. These stakeholders have been instrumental in driving the mission of the company. Since this is a publicly traded company, it is owned by the shareholders. This is one of the things that have helped meet the financial needs of the company. Apart from the shareholders, the other essential stakeholder of this company is the customer. Customers are the most important stakeholders in any given business. How a business regards its customers determines how successful that business can be. The company’s revenue has increased by about 6% from 2011 to 2012 and this is mostly credited to the wonderful customer relationships. The other significant stakeholders are the employees of the company. The company boasts of highly motivated, innovative and hardworking employees responsible for the good performance of the company. Besides, the other stakeholders are the suppliers and the creditors. The directors have the responsibility of overseeing the performance of the company in critical areas. Suppliers: Sainsbury takes pride in the excellent relationship that has been created with their suppliers. The company has close links with both current and potential suppliers as a way of ensuring a continued flow in of the required products.One of the most important ways through which Sainsbury is making progress in sourcing is working more closely with farmers and growers, both in the UK and overseas. This has made it possible for the company to acquire the required products at very affordable prices. The company’s Code of Conduct for Ethical Trade covers the employment practices the company expect from suppliers, both in the UK and abroad. At the same time, free range Woodland eggs have featured in Sainsbury’s stores since 2004, following farmer John Widdowson’s observations on how his hens preferred the shade and protection of trees. The company provides an opportunity for all those in the UK that have regional products that they would like to be consumed in Sainsbury to apply at all times. The company provides useful information and applications to help suppliers manage their relationship with Sainsbury's. Premises: The company operates a range of store formats. Each store format has been designed to meet specific customer shopping requirements and locations. The company is looking forward to expanding its convenience portfolio in the UK in order to meet the rising demands from customers. The company has exploited the unique opportunities to grow by expanding its stores over and over. For instance, in 2012/13 the company opened 5 new supermarkets, 3 extensions and 49 convenience stores.The company has a significant portfolio which includes 304 freehold and long leasehold properties and 41 properties within joint venture arrangements What & how they do it: The company has five areas of focus underpinned by the strong values and culture, as well as commitment to operational excellence. The company puts the customer at the heart of everything it does, aiming to make their lives easier every day by offering great quality and service at fair prices. In as much as the company began by offering purely food products, it has gone ahead to accommodate many other products including clothing, banking, etc. The diversity in what the company offers to the market has made it possible to operate supermarkets. These supermarkets mainly sell the products produced by Sainsbury p/l. Who they do it for: The slogan of this company which determines how the company operates is built upon their focus to meet the needs of their customers in the most appealing manner. From product innovation and development, the vision is to satisfy the needs of their customers. The success of this company has been based on the excellent long-term relationship that it has been able to build with their customers. Why they do it: There might be various reasons why the company is operating. The philosophy upon which the company was established is what drives it. Apart from meeting the needs of their customers, the company has created employment opportunities for many young people all over the world. The company has been critical in terms of contributing towards the economy of the country. Through eradication of unemployment, the company has achieved much not just for the shareholders, but to the whole country. The reason the company has been able to achieve this much is based on the values and objectives that guide the company. One of the objectives of the company is creating best products for food and health. Second, the company is focused on sourcing with integrity. This relates to acquisition of both products and human assets. Third, the company is committed to preserving the environment not just for the good of human beings, but also for the animals. Fourth, the company is focused on making a positive difference in the life of many people in the society. Lastly, the company is also focused on creating a wonderful place for many people to work in. This explains why the company has managed over 150,000 employees in its various branches. Resources - human assets: The company is fully committed to attracting and retaining highly talented and motivated individuals to work for the company. Currently, there is the Graduate 2020 Leaders Program whose aim is to groom young people for managerial responsibilities. By harnessing the energy, creativity and talent of people, the company is looking forward to becoming the nation's first choice for everyday shopping. Employees work in an environment where everyone is positive and eager to make a difference. Above all, the teams are passionate about making customers feel they aren't just in any supermarket: they're in Sainsbury's. As a leading UK food retailer with interests in financial services, the company is always looking for talented individuals to join and discover just why Sainsbury's is such a great place to work. Sainsbury's promotes diversity in the workforce and supports Age Positive, Investors in People (Gold accreditation) and the Positive about Disabled People initiatives. Legal framework: Sainsbury operates as a limited liability company. The executive managers of the company are led by the CEO. The chairman is in the capacity of an overall overseer and he chairs the Directors’ meeting. They are also supported by other nonexecutive directors in different capacities. Statutory requirements: As earlier mentioned, this is a publicly traded company. The main statutory requirements of the company relates to formation of the company. The law requires the key articles of formation including Articles of Association and the Memorandum of Association to be the basis that guides the company. These articles are essential in the formation of the company because they contain information regarding the operation of the company. Political interference: From the time this company began its operations, there has not been reported issues of political interference. The reason this could have been so is probably based on the nature of products and services which this company offers. In most scenarios, the company has managed to keep its affairs away from politics. It is not recorded of any political transition or instability that happened to affect this company in exclusivity. Critical Activities: Products & Services In identifying this company’s critical activities, it is good to realize that these are products and services which must be present to facilitate continuity of the business. The consequence of failing to undertake these critical activities will lead to major loss in revenue, compromise of operational efficiency, failure to meet contractual agreements, etc. This company offers many products and services as per now. From its inception up to now, the company has undergone tremendous growth. The company started out with food products only. Nevertheless, the company has expanded its product base to include even electronic appliances. That implies that for the last 143 years the company has been trading very many products have been developed as a way of diversifying revenue sources. The following are some of the products that contributed the highest revenues during the 2012 financial year: food, clothing, complementary services and merchandising: supermarkets. The products above can be ranked based on the basis of the impact they have within a specific time frame. The product that happens to exhibit the greatest impact within the shortest time possible is considered the critical service. The four main products under consideration have different impacts within different time frames. Some of the information that has been very significant in this analysis is the financial reports of the company in the recent past. The contribution towards the company’s total revenue by individual products is very important. At the same time, the rate of growth of these products communicates a lot regarding the criticality of a product. Moreover, I have also analysed the company’s values and objectives. This field has also proven to be rich in information that can guide one in determining the critical product. This is because the company is steered to achieve using the values it holds and the objects already laid down to be achieved. Risk Assessment: In assessing the most critical service, the demand for the product is very essential. The product or service that attracts the most customers is the core product of the company. The most appropriate tools to be used in this assessment are the qualitative and quantitative techniques. The two approaches can be helpful in determining how significant these services are to the company. The likes of questionnaires and interviews are very important in determining the significance of these services from various stakeholders. This questionnaire can be helpful when either the employees or consumers of the products give their response regarding the products. At the same time, there may be other information in the company’s archives that can be of help when assessing the risk of these critical products. risk likelihood impact Risk 1 0.8 1.25 1 Risk 2 0.6 1.67 2 Risk 3 0.4 2.5 2 Risk 4 0.2 20 4 2 Moderate 2 High 4 1 Low 1 Moderate 2 1 2 Ranking of the four products: i. Food ii. Clothing iii. Merchandising: supermarkets iv. Complementary services Maximum tolerable period: In assessing the maximum tolerable period, there are a number of items that ought to be highlighted. The three aspects of the whole procedure that must be considered is the period of the crisis, the maximum recovery period and the catch up period. It is good for the crisis manager to understand the possible recovery period and the other two aspects to be able to calculate the maximum tolerable period. When estimating the maximum tolerable period, the following factors must be accorded due consideration: * Customer expectations * Regulatory requirements * Reputational issues * Financial and operational impairment * Strategic consequences The maximum tolerable period is a component of time taken to resume activity and time taken to attain normal productivity. That implies the time taken to put the activity into operation again and the time taken to achieve normal productions. [2weeks x 7 x 80%] + [3weeks x 7 x 100%] = 32.2 days Critical dependencies of the company The various categories of dependencies have unique roles that they play and each one of them is important. Nevertheless, their significance can be easily ranked. Various factors can be considered when assessing the significance of the various items. One factor that can be used to gauge the significance of each one of them is the ease of replacing. How fast an entity can be replaced in the organization tells a lot concerning the significance of that particular dependence. For instance, the most difficult dependence to be replaced in this organization is the customers. It takes time and monetary resource to be able to replace a single customer. This is the hardest stakeholder to be replaced in the company. With a lot of competition, one ought to be very efficient and effective in service delivery to be able to win customers. Therefore when ranking these stakeholders, the customer is the most important. Second to the customer is the employee. The employees are responsible for the value and quality of products and services that are produced by the company. Without these wonderful products and services, the company will not be able to attract customers at all. At the same time, getting employees with expertise and knowledge that the company require has always been a big challenge. These are the kind of employees who give more than what they gain from the company. They are therefore ranked second. After the employees we have the premises. These include all the facilities that the company uses in the production of its goods and services. It also includes the infrastructure and all other related resources that necessitate the production, distribution and sale of goods and services of the company. This category also caters for vehicles used in the company. The fourth and probably the least relevant is the supplier. The supplier of raw materials can be interchanged any time depending on prevailing environment. For instance, when another supplier is noticed supplying the same products at a lower price, the reigning supplier can be replaced on pricing policy basis. Therefore, this is the stakeholders whose replacement can be done very fast. At the same time, there are fewer inconveniences brought about by the replacement of a supplier. At least it cannot be compared to inconveniences brought about when trying to replace a customer. How to monitor these dependences: Monitoring of the various stakeholders to the company is meant to be used to provide relevant information to aid the company make the relevant adjustment. When using the green, ember and red indicators, still priority is paid to the most critical stakeholder. In our case, the most critical dependence is the customer. The aim of the company is supposed to be mobilizing more customers all the time. Nevertheless when customer number drop to certain levels, it is good to carry out an investigation to ascertain the cause before it runs out of control. When dealing with customers, stagnation in the number of customers indicates that there is a problem. The number of customers ought to be growing on a regular basis and therefore any time the number stagnates, an investigation must be undertaken. Therefore according to this monitoring tool, stagnation should display ember colour while a continuous drop should display red. This indeed is the most sensitive dependence. The same strategy should be applied to monitor employees though applied differently. The employees of the company are not expected to be increasing on a regular basis. Nevertheless, they are expected to remain relatively constant over time. When the turnover rate is high, it means there is a problem with employee motivation and satisfaction. In this regard, the green indicator should be displayed when the employee turnover is relatively constant, display ember when employees are leaving more than they are coming in. Lastly, the red colour should be displayed when the situation has worsened. How to deal with the losses of dependencies: The recovery from the loss of dependencies is the way forward to encourage continuity of a business after a loss. Strategies to deal with such losses must be designed based on the importance of dependence in the company. The move is meant to ensure that the company is not exposed to loss of its major stakeholder. In this scenario, the most important stakeholder is the customer. The loss of the customer is considered the greatest loss to the company. Therefore, there is a need to cushion the company against losses of this magnitude (Collins 2000, p66). In case where the company’s system has been hacked to the detriment of the customers, the counter strategy must be employed by the public relations and communications team. The team has the responsibility of reassuring the customers that the company is still focused on delivering the best products to its customers. Therefore, communicating the problem and reassuring the customers of the commitment to meet the challenge is the best strategy that will help the company. Many companies go ahead to reinvest a lot of funds in marketing to make sure the product is back on course. When it comes to other stakeholders like the employees, dealing with them has never been too complicated as compared to dealing with customers. Overcoming the issue of departure of experienced skills requires a lot of considerations. It has always been challenging when it comes to replacing experienced personnel. The company may be forced to spend more money to poach the equivalents in other companies. The strategies for the other stakeholders are never challenging and the available solution is to seek immediate replacement. Plan Activation Activate the plan: The uniqueness of the situation in the company is the one that triggers counter strategies. The organization’s preparedness in relation to a tragedy hitting its critical activities is therefore dependent on the nature of the product. As the analysis undertaken indicated, the likely threats to the main products and services are definitely manifested through radical drop in sales. This can be through increased competition, high costs, litigation, defamation, etc. The senior management is duly responsible for activating the business continuity plan. The senior managers are the ones who understand most the operation of the business and in such an occurrence, they are better informed to activate the plan. Other parties may not fully understand the rigidities involved in such situations. Therefore, depending on the nature of the crisis the responsible senior managermust be in a position to activate the plan. Crisis response planning team: The composition of the crisis response team may vary depending on the nature of their responsibilities. Nevertheless, the team must consist of mostly employees of the company. The other members of the team could be experts in respective field willing to offer their professional counsel in relation to the crisis at hand. These experts must also possess enough information about the company. This is to ensure that the decisions they take are well grounded. The profiles of these experts should be stored at places where they can be easily accessed in case of need. The team is charged with advising the company on specific steps to be undertaken in case of emergence. Evaluation and testing The business continuity plan must contain the evaluation and review stage. At this stage, the company is able to assess the effectiveness of the recovery plan. The achievement of testing strategies requires a business decision regarding the level and frequency of testing needed to ensure recovery objectives can be achieved during a business interruption or disaster (Pindowski 2008, p75). The frequency and complexity of testing is based on the risks to the institution. Even small, serviced institutions should participate in tests with their core service providers and test other critical components of the BCP. Unmanned recovery testing, where back-up tapes are sent to the recovery site to be run by service provider employees, is not a sufficient test of an institution's BCP. Additional testing of other aspects of the BCP should be performed to the extent feasible. Testing strategies should detail the conditions and frequency for testing applications and business functions, including the supporting information processing. The strategy should. Testing verifies the effectiveness of your plan, trains plan participants on what to do in a real scenario and identifies areas where the plan needs to be strengthened. There is a need to conduct the review on the plan on a regular basis i.e. on quarterly basis. The team of business continuity plan and other departmental leaders are responsible for the review and testing. The emphasis is to exploit areas where the plan ought to be strengthened. The members of the BCP will conduct a disaster role playing session. The emergence scenarios will be created in order for the team to be very cognizant of the real situation. During the running of these emergence scenarios, the team will be highlighting inconsistencies in order to undertake necessary modifications. The team will then undertake a simulation of a probable disaster scenario. Use all relevant stakeholders of the business to test the simulation.Test data recovery, staff safety, asset management, leadership response, relocation protocols and loss recovery procedures. Accommodate any work stoppages due to the testing of the BCP by scheduling simulations and other testing exercises. Conduct table-top sessions that include management and higher level staff exclusively on the weekends, and plan review sessions usually lasting two to four hours that can be scheduled during the business week.Communicate the importance and benefit of the BCP to every stakeholder in the organization. Promote the review and active participation in the BCP simulation. Use the simulation to identify competencies within the employees that may signify additional resources during a disaster situation. References Barnes, J 2001, A Guide to Business Continuity Planning, John Wiley & Sons, New Jersey, p145-156. Collins, L 2000, Disaster Management and Preparedness, CRC Press, Pennsylvania, p61-69. Kopp, E 2012, Business Continuity Plan, EK Publications, New York, p34-47. Pindowski, J 2008, Disaster Management Handbook, CRC Press, Pennsylvania, p72-89. Read More