Steps in risk assessment forenhancing business continuity

Business continuity is an organisation’s ability to maintain or quickly resume acceptable levels of production or service delivery following a short-term catastrophic event that disrupts normal operations. Examples of disruptions range from natural disasters to valuable employee loss to power outages to civil unrest. A risk assessment is about identifying all the possible threats to your business and its processes, from wherever they might originate. It is an important part of a thorough business continuity plan. For example, if flooding from a hurricane wipes out a business’s records and they do not have a backup site (or the backup is too close and is also flooded) the compliance issues from the destroyed records will linger for months and possibly even years afterward. A business continuity plan (BCP) is a system of prevention and recovery from potential threats to a company. Accidents do happen every time and the fact that they cannot be predicted made them accidents. There are some ruinous accidents that must be prepared for!
Whether the disaster is natural, like a hurricane or pandemic, or man-made, like a cyber-attack and accident like power breakdown, fire outbreak, it is important to identify and plan for situations where an organisation may not have immediate access to the production raw materials, data, financial resources, key skilled staff, or even accessibility to locations that the organisation is accustomed to during normal business operations. The goal of business continuity planning, after all, is to keep a business running no matter what happens. Therefore, it makes sense that an organisation takes some time to address all the “what-ifs” and “how-will’, and plan for those things.

The most common mistakes businesses make when it comes to business continuity planning and risk assessment include:

• Not accounting for loss of critical people especially in organisations with high employee turnover.
• Not planning to accommodate the stress and trauma staff incur in crises.
• Not making the emergency plan easily accessible to staff at the office or working remotely or making plans that are too generic or are out of date.
• Failing to communicate plans and processes quickly and transparently and the resulting public relations (PR) problems that can be related to recovery.
• No alternative emergency operation centres or recovery sites, or not having a plan for employees to work from home when a physical site is not accessible.
• Believing that outside backup assistance and insurance will take care of everything.

During the risk assessment process, what to look for within your organisation are:

• Identify processes and situations that can cause harm, particularly harm to people and business processes.
• Determine how likely it is that each hazard will occur and how severe the consequences could be.
• Decide what steps the organisation should take to prevent these hazards, control the risks, or mitigate bad possible outcomes.
• Communicate all possible disastrous risks to key members of staff like the management board and those in the c-suite and how the organisation plans to guide them.

The goal of a risk assessment plan will vary across industries, but majorly, the goal is to help organisations anticipate operation risks and mitigate them. It also has other goals which include:

• Providing an analysis of possible threats.
• Preventing injuries or illnesses among employees.
• Meeting legal requirements from business supervising authority.
• Creating awareness about hazards and risks and how they can affect a business.
• Creating an accurate inventory of available assets and their functions.
• Justifying the cost of managing risks (cost/benefits analysis).
• Determining the budget to remediate risks. Understand the return on investment (ROI) in risk assessment. Risk mitigation costs money and it is best for all key stakeholders of a business organisation to have a goal-alignment on risk management.

While planning to begin the risk assessment process, it is important to determine the scope of the assessment. This will be determined by the risk assessment budget and the degree of damage if risk is not mitigated, necessary resources, the stakeholders involved, and the laws and regulations that are necessary to be followed. Due to the fact that the risk assessment process is all-encompassing and complex, it is most often best to consult with or hire a risk management specialist for this process. The business environment, especially the landscape, continues to be ever-evolving, so must those operating in it. This necessitates making business resilience through flexible business architecture and business culture the cornerstone of long-term success. It is proper for an organisation to identify the potential vulnerabilities to implementing proactive strategies.

These strategies include:

• The fundamentals of risk assessment and its impact on business continuity. Organisation must prepare the Deputy Chief Executive Officer well to be able to cope as Chief Executive Officer within a short period. All workers must have alternatives that can serve in their place within short notice and all equipment must have back-up.
• How to identify, prioritize, and mitigate potential risks across various business functions.
• Importance of unifying people, strategies and tools to enhance organisational adaptability.

Steps for conducting a Business Continuity Risk Assessment include:

• Step 1: Identify Business Critical Processes and Assets. Make a register of business strategic assets according to their priority in the business process.
• Step 2: Identify and Assess Potential Business Risks.
• Step 3: Conduct a Business Threat Impact Analysis (BTIA)
• Step 4: Develop Risk Mitigation Strategies and Response Plans.
  Dedicate an officer to primarily or secondarily manage risk occurrence.
• Step 5: Monitor, Update, and Adapt the Risk Assessment.

OLUFEMI

Olufemi Adedamola Oyedele, MPhil. in Construction Management, managing director/CEO, Fame Oyster & Co. Nigeria, is an expert in real estate investment, a registered estate surveyor and valuer, and an experienced construction project manager. He can be reached on +2348137564200 (text only) or femoyede@gmail.com