SA Companies still lagging in Business continuity management

While increased regulation and a focus on corporate governance has resulted in many South African companies implementing better risk management practices, one area that remains a concern is business continuity management.

This is according to Manuel Chikwanda, Manager: Risk Engineering Services at Lion of Africa Insurance, who spoke at the recently held FPASA-organised (Fire Protection Association of Southern Africa) Fire Technology Seminar on the necessity of business continuity management.

“Business continuity management is an all-encompassing management process that identifies potential risks to an organisation and provides a framework for effectively dealing with such a situation. In South Africa, although practiced by a few corporations, it is mostly still seen as an IT disaster recovery process when, in fact, all corporations that practice risk management should make use of it,” states Chikwanda.

Chikwanda says that there is an increasing need for business continuity, which comes as a result of frequent and irregular catastrophic events from natural phenomena and human error. "This shows that business faces more risks than before.

“Many corporations feel they have more control over a situation than what they actually do. For example, prior to the massive oil spill off the Gulf of Mexico, BP had issued several assurances that they had a plan in place to deal with an oil spill, even though their plan fell far short. Some risks may seem too unlikely to happen to an organisation, but may arise from a series of unfortunate events, such as with the nuclear power station at Fukushima, Japan, which was not affected by the massive earthquake but rather by the tsunami that followed,” explains Chikwanda.

Chikwanda says the benefits to organisations that practice the principles of business continuity management include proactive risk identification and mitigation, and compliance with statutory and governance requirements. For insurance purposes, companies are more likely to have access to cheaper finance than if they were to seek recovery finance after a catastrophe.

“One of the biggest benefits, however, is that organisations that take advantage of widespread catastrophes through business continuity management can turn them into opportunities for growing market share. This is at the expense of competitors with no business continuity management, as they are likely to struggle to satisfy their customer base through the period of turmoil,” he says.

The seminar, held over two days, aimed to address the various ways that businesses and corporations can assess and manage and protect themselves against imminent threats, such as fire.