How Business Continuity Management Can Help an Organisation in Managing the Challenges - Coursework Example

Business Continuity Management (BCM) Table of Contents Business Continuity Management (BCM Table of Contents 2 Introduction 3 Introduction Risk has been identified as one of the integral component of business organisations now-a-days. Business organisations often suffer from the risks of business failures, losses, thefts, break down, changes in customer demand, labour unrest, and many more. In addition, globalisation, shifts in demographics pattern, rapid technological changes, economic and financial uncertainties, etc has also intensified the risks and uncertainties in business organisations. Operating and financial margin of the business organisations are on the verge of shrinking due to above identified risks and uncertainties (Arthur 2010). The concept of business continuity management (BCM) has been coined and developed in order to foster enhanced and improved process to business firms in managing and handling such risks. The purpose of BCM is to incorporate effective and enhanced capacity among business firms to respond towards environmental threats and riskiness. Business continuity management enable business organisations in identifying risks, threats and uncertain situations and events in their day-to-day functioning. The risk identification approach of BCM increases capacity of business organisations in handling and managing risks and threats (Business Continuity Management: Building resilience in public sector entities 2009). Critical evaluation of how business continuity management (BCM) can help an organisation in managing the challenges Business continuity management (BCM) helps business organisations in managing challenges and risks confronted and faced by them in the business world. BCM facilitates this task of managing challenges and risks through adopting a comprehensive, integrated and proactive approach. It has been identified that BCM do not evolve in the event of any unforeseen or crisis situation faced by business organisations. The evolution of BCM is associated with the emergence of business organisations. In other words, evolution of business organisations and BCM is simultaneously associated with each other. In initial years, BCM has been identified as a disaster management tool evolves and used only in the event of crisis and risks. This reactive approach on the part of business organisations failed and prevented BCM from handling crisis situations properly. On the other hand, it led and resulted in heavy losses and failures for business organisations (Barnes, Barnes &Rothstein 2004). With the passage of time, this reactive attitude and approach of business firms has changed and coined BCM as an integral component of business process. The identification and need of business firms has increased the role and importance of BCM in mitigating risky and challenging situations. The manner and ways through which BCM assists business organisations in managing challenges are: Act as a monitoring mechanism Inspecting, maintaining, monitoring and controlling are the main functions of BCM. Activities and tasks performed by the business organisations are monitored and maintained by BCM at regular intervals. BCM designs and develops standards, policies, guidelines and procedures for discharging business functions effectively and efficiently (Watters 2010). In the past years, it has been identified that there were numerous business firms faced the problem of stoppage of business processes on account of economic uncertainty, rapid technological changes, unprecedented complexities and challenges, and so on. BCM monitors all such challenges and situations and their implications on business process (Bizmanualz 2008). This monitoring task of BCM enable business firm to adapt and modify business processes in accordance with such challenges and situations. In this way, the early monitoring and inspecting of challenges by BCM existing in the business environment and its implications on business process enable business firms to cope and handle such challenges effectively. Monitoring and inspecting mechanism of BCM allows the business organisation in delivering services on a consistent and reliable basis. This becomes possible due to proactive approach and nature of BCM. BCM monitors and inspects the business process and market changes as well on a simultaneous basis. This simultaneous monitoring develops enhanced capability among business firms in coping and handling risky and challenging situations (Waters 2007). Implementing operations control measures BCM help a business organisation in handling challenging and risky situations through implementing operating control measures. Operating control measures are implemented at each and every possible business activities irrespective of the role and importance of such activities. It becomes crucial for business organisations to control certain operations and activities in order to satisfy commitments and mitigating impact of complicating and complex business situations (Steingold 2009). BCM requires business organisations to develop documented procedures to accomplish business tasks and activities. It has been identified that absence of documented procedures led to various types of deviations in business firms and sometimes results in various failures. BCM enable business firms to develop documented procedures and identify which operations are critical and need effective controlling and monitoring (Blyth 2009). BCM allows business organisations to formulate desired objectives, sets targets for performances and establish operating control procedures in order to attain desired objectives. There are various operations take place in the business organisations like equipment and machine maintenance, management of contractors, acquisition of property and site, transportation, production processes, on-site and off-site maintenance, regulating suppliers, and so on. All such operations can potentially affect business performances significantly. BCM lays down objectives for each operation, develop operations control measures and ensure that operations are performed effectively (Sikich 2008). Through developing and execution plans Development and execution of plans is one of the significant area and dimension of BCM. It has been identified that a well prepared and integrated BCM develops incident management plans in order to manage and determine the impact of every possible business event. Business event can be favourable or unfavourable depending on the circumstances. Incident management plans of BCM allow business organisations to identify the impact of every possible business event and develop recovery and remedial strategies accordingly. For instance, shifting or changing power structures is a business event which can be viewed both as favourable and unfavourable by business organisations (Burtles 2007). BCM determines positives and negatives of such business event and implication on overall business performance. BCM prescribes the procedures and path for changing power structures in case of business organisations identifying such event as a favourable one. On the other hand, BCM develop recovery strategies for supporting changes in power structures in case of business organisations visualising the event as unfavourable one (Sadgrove 2005). Convergence of business continuity and risk management Business continuity is the main philosophy and phenomena of BCM. The disciplines and framework of BCM are guided and strive towards improving and enhancing business continuity and growth. BCM has linked the concept and philosophy of business continuity with the risk management. In the past years, business continuity and risk management are being considered as two separate disciplines need to be handled individually. However increasing complexities and emergence of risky factors in the business environment led the business organisations to consolidate and establishing the concept of business continuity and risk management in a single framework (Business Continuity 2011). The need of linking and consolidation of two concepts arises due to nature and objective of risk management and BCM. The both concepts are concerned with preventing business organisations from adverse situations and events. On one hand, risk management deals with determining likelihood of any adverse event and identify steps to prevent and mitigate impact of such adverse event. On the other hand, BCM identifies what should be done by business firms if any negative or adverse event has already occurred (Roessing 2002). BCM emphasise more on what needs to be done instead of investigating cause of disruption and failures. It is due to reason that BCM believes that remedial actions are more important for keeping and maintaining business in current position instead of investigating reasons behind failures and adversities. Business organisations are facilitated with wider and clear picture of overall risky and challenging situations and thus can plan business actions accordingly. This integration and linkage can also help business organisations in determining where the priorities for mitigating and handling risks exist in business scenario (Business Continuity Management: Building resilience in public sector entities 2009). Changing corporate culture This is another manner through which BCM enhances capacity of business organisations in managing and adapting environmental uncertainties. It a well known fact that business organisations face numerous uncertainties in terms of social, cultural, demographics, environmental changes and many more. Such uncertainties have posed new risks and threats in front of business organisations and pose a threat on their expansion and development strategies. Business scholars and practitioners have identified that traditional and conventional pattern of corporate culture seems no longer profound in current uncertainties and dynamics. The traditional corporate culture pattern made business organisation as crisis-prepared instead of crisis-prone. Crisis-prepared business organisations tend to use defensive mechanism to measure, handle and adapting uncertain situations. Such defensive mechanisms are no longer effective in mitigating frequency and impact of risky and unforeseen situations (Elliott, Swartz & Herbane 2010). In light of this, there is need to change and transform corporate culture from crisis-prepared to crisis-prone in business organisations. BCM can serve this task of transforming corporate culture effectively to a considerable extent. It has been identified that crisis-prone business organisations are more effective and capable in handling unexpected situations and uncertainties. This is so because such organisations implement active mechanism in order to identify any kind of threatening event which can prove disastrous in long term. This active monitoring and measurement improves capability of business organisations in indemnifying themselves against unexpected losses and failures arise on account of risky events (Reuvid 2012). Possible benefits from implementing a well embedded programme of BCM A well embedded programme of BCM helps in keeping business going smoothly through handling contingencies within due time and limits. The failure of business processes on account of risky events and unexpected losses has minimised to a considerable extent with the help of well embedded BCM programme. The possible benefits that can accrue from a well embedded BCM programme can be outlined under the following headings: Earlier identification of risks Risk identification is the main task and purpose of BCM. However, capability of BCM of identifying risks and threats at the earliest possible level demonstrate its benefit. Structure and framework of BCM is designed in such a manner that it enable business firms in identifying any possible crisis situation likely to incur in the coming time (Phyper & MacLean 2009). The early identification of crisis and threatening situation provides adequate time to the business firm in devising risk mitigation strategies and respond to the contingencies accordingly. The earlier identification of risks also provides various other benefits like it helps in ensuring optimum utilisation of available operation, human resources and technological resources. All resources of the business firms are being allocated and utilised by the business firms with careful planning in order to handle unforeseen circumstances properly (Estall 2012). Continuity of business operations and service delivery This is the most common benefit leading the business organisations to implement BCM programme in their operations and service delivery. BCM protect and maintain the delivery of services to the customer on a going basis even in the event of business disruption (Osborne 2007). The ability of BCM to maintain on-going delivery of services improves the sustainability of business organisations. It also allows business organisations to identify any kind of operational disruption and its impact on a proactive basis. The proactive identification of any kind of operational disruption enable the business firms to take right decision quickly and thus place an immediate response to disruptions. This practice on the part of business firms help in minimising the impact of operational and financial disruptions on business firms (Gelinas & Dull 2007). Improves customer confidence Customer confidence is the cornerstone of business success and growth. High level of customer confidence contributes in success and growth history of business organisations and vice-versa. BCM supports and improves the customer confidence through enhancing organisations capability of handling unforeseen and risky situations in an effective and efficient manner. Customers retain trust over business organisations as BCM fosters numerous practical evidences and reasons to believe that business organisations pose enhanced capability and competence to sustain in the midst of risky and complicated situations. The enhanced capability and competence provides comfort to the customers that business organisations put substantial efforts to grow and sustain in the difficult circumstances also. This aspect of BCM programme act as appealing to customers in competing markets and attract them towards yielding products and services offered by business organisations (Graham & Kaye 2006). A well embedded BCM also improves and enhances the confidence level of employees and workforce in addition to customers. Employees and workforce develop trust and confidence among the ability of senior management in responding series of business incidents and situations. BCM programme offers a well planned, formal and integrated way and manner to senior management members for handling complicated and difficult business situations. The formal and well planned methodology of BCM programme led the employees and workforce to believe that their jobs are not at risk even in the difficult business situations. BCM programme empower senior management members to protect employees jobs and sustain their firms in the adverse business situations (Multi-hazard Business Continuity Management 2011). Fosters competitive advantage BCM programs maintain and increases competitive position of business firms through preventing any kind of significant harm likely to cause business firms due to complexities and uncertainties of environmental conditions (McEntire 2007). In other words, corporate image and reputation of business firms is being protected and maintained by BCM programme. It also minimises or prevents threats to the customer and shareholders confidence, fulfilling contractual requirements, preventing loss of market share, and provides distinct edge in the competitive dynamics. Business scholars and practitioners believe that sound and full-fledged BCM program act as an incentive and encourage customers to continue and develop relationship with respective business organisations (Gray, I. & Manson 2007). This incentive and encouragement on the part of customers act as a competitive advantage in the long term and enable business organisations in winning and retaining customers. Business resilience BCM program is being implemented with the purpose of making business organisations resilient. Resilience also acts as a yardstick against which success of BCM programs is measured and tested. It has been seen that resilient business entities are more capable in achieving organisation objectives when suffered from various challenges relates to natural calamities, machine failure, economic downturn, recession, and even sudden terrorist attack. This is due to reason the resilient business entities adopts a holistic approach in handling and surviving in difficult and turbulent times. A well embedded BCM program integrates culture, attitude, functions, framework, and processes and thus makes business firms resilient and adaptable in unforeseen situations (Heng 2008). Compliance benefits It has been seen that implementation of BCM is becoming a regulatory requirement now-a-days. It means that BCM program is no longer been a choice for business firms rather it has become a necessity and compliance requirements. Business organisations are now required to have well embedded BCM program to comply with the regulatory requirements and for reducing legal litigations. For instance, UK civil contingencies act demand all the business firms of UK to have adequate and sound BCM program. In addition to this, there are various legal requirements relates to companies act, income tax act, anti-money laundering laws, etc support the business firm to have well embedded BCM program (Hiles 2004). Compliance with such legal and regulatory requirements not only minimise chances of legal litigation but also facilitates path of insurance. It is so because BCM program led the insurers and underwriters to understand and visualise how effectively business firms are managing risks and uncertainties (Matthys 2010). BCM programs enable business firms to proactively manage the risks and uncertainties. This proactive management of risks and uncertainties develops confidence among insurers and underwriters that there are limited loss possibilities and thus their insured money will not be liquidated. The ability of business firms to recover and mitigate losses act as a deciding factor for insurers to decide whether to provide insurance policies or not. BCM programs improves loss recovering capacity of business firms and thus makes the tasks of availing insurance policies in a much easier and quicker manner. BCM programs develop self-insured capability among business firms and thereby limit loss possibilities and chances (Hiles 2010). Developing mitigation strategies Mitigation strategies are devised with the purpose of minimising risk level and optimising output and customer services at the same time. A wide range of preventive measures are fostered by mitigation strategies for protecting facility, operations and business personnel. Such preventive measures are significant for minimising the impact of risks and uncertainties and for continuing business operations in a regular manner. A well embedded BCM programs develops proactive and risk-oriented strategies to continue the business operations in right direction with minimum deviations (Hotchkiss 2010). All the external and internal dimensions of business processes are monitored by the BCM regularly in order to devise risk mitigation strategies accordingly. Risk mitigation strategies designed by BCM programs balances inherent risks of business organisations in light of available operational and technological resources. The knowledge of available operational and technological resources enables the business firm to have secure and high tolerant risk mitigation strategies (Kildow 2011). Conclusion The above discussion of BCM and its manner, role and possible benefits led to the conclusion that BCM represent an effective and supportive tool for business organisations for existing and surviving in the risky and uncertain situations. BCM offers a comprehensive framework and process that can be placed in the business enterprises to establish and maintain level of continuity in the operations. It deals with all the aspects like decision making, monitoring business activities, procuring and allotting resources, and determining sequence of activities. The importance of BCM increases with the rise in the unexpected and risky situations in the business world (Khosrow-Pour 2003). There are various manners and ways like changing corporate culture, convergence of business continuity and risk management, developing and execution of plans; implementing operations control measures and many more through which BCM help business organisations in managing environmental challenges. 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