BCP for AFP

AUTHOR: Professor Robert Marks   DATE: 10.05.06   ISSUE 1, 2006
Y2K, Bird Flu (also known as Avian Flu Pandemic — AFP), what’s the difference?

Well, it’s true that the fearful predictions of chaos didn’t occur as the world’s clocks ticked over to 12:01 am on Saturday, January 1, 2000, and it might be difficult to remember the efforts that went into preventing catastrophe in the months and years before, now, six and a half years later, but don’t assume that another flu pandemic won’t occur, or when it does come it will be a minor inconvenience, as the 1968 pandemic — the last to occur — turned out to be.

The fable of the boy who cried “Wolf!” illustrates two pertinent morals: first, don’t sound the alarm too often, and, second, just because warnings become monotonous doesn’t mean that there is no threat. Perhaps not immediately from a flu pandemic, but what about a cyclone? or a power outage? or a new form of computer virus? or an escalating conflict near the oil wells? or a terrorist attack in the CBD? None is likely; any is possible.

Business Continuity Planning (BCP) is a form of self-insurance when the firm takes action to mitigate the impacts on its activities from disruption, usually from external events.

Just as corporate strategy argues that successful firms are matched to their market environment at both ends of the value chain, BCP suggests that they should make some contingency plans against the time when that environment changes significantly, often without warning.

At this point, use of an extended value chain can illuminate. As well as Customers at the top and Suppliers at the bottom, I plot other inputs (Services and Utilities — banking, auditing, legal, insurance, training, security, travel, communications, water, electricity, other energy, sewerage, public health, etc.) on the left, and Employees (up to and including the CEO and the Board) on the right. Disruption to any of these can potentially cripple the firm.

Some firms try to list all possible shocks or contingencies, from any or several of the four quadrants. But this task has no end: an imaginative committee can always come up with another, and then disagree at length about the likelihood of its happening. A better way, I argue, is to undertake a form of triage: decide which of the firm’s activities are core, to be abandoned only in extremis; which are postponable, until full operations are resumed, to be canibalised to maintain the core; and which are desirable, but not quite core. Then the BCP committee can more readily see what needs to be done to maintain the core and if possible the desirables, under several possible disruptions. Customers and suppliers should be kept informed, both prospectively, and as events unfold, to manage their expectations, and to help them coordinate their own BCPs. Indeed, some customers demand that their suppliers have a BCP.

Experts agree that it is a question of when, not whether, another flu pandemic will come. But whether it is A(H5N1) a.k.a. the current bird flu, or some other flu virus, and how severe the pandemic will be we cannot yet know, nor can public health authorities comprehensively plan for it. Nonetheless, firms and other organisations can develop the contingency plans for such possibilities known as BCP. I argue that BCP, although not a panacea, is a prudent response to the risk of disruption.