SMEs Underprepared for Business Continuity
Source: Chen, Huifen, Business Times, 12 May 2009
The vital necessity to put BCPs in place urgently hasn't sunk in yet, reports CHEN HUIFEN
IN THE past two weeks, the authorities have moved swiftly to minimise the chances of an outbreak of swine flu in Singapore, with two alert level upgrades - then a downgrade yesterday.
Quote from Dr Goh Moh Heng
Dr Goh: Some SMEs do give business continuity management a thought but their approach is to implement it on the fly as the situation develops, and that's the wrong way to do it
Amid the flurry of activity, you would expect every organisation here to have woken up to the need to put business continuity plans (BCPs) in place in case the virus hits.
Of course, most have. But not all are treating the threat so seriously, it would seem.
Contingency consulting firms say there has been an increase in enquiries, but most have come from government agencies and larger firms.
Although a handful of SMEs have shown interest, it would seem the sector is a laggard.
'There is an increasing trend for SMEs, like multinational corporations, to start to see the benefits of BCP in uncertain times,' says Control Risk's director of crisis and security consulting in South-east Asia, Bruce Hayes. 'But in terms of preparedness, SMEs are lagging MNCs and governments.'
Nathaniel Forbes, founder of Forbes Calamity Prevention, puts things more bluntly: 'SMEs simply don't prepare for disasters. In 14 years in Asia, I've had only one SME as a client. It was a travel agency in Hong Kong that was forced to prepare a BCP to keep a client - a multinational bank that threatened to cancel its contract if the travel agency didn't get a BCP quickly.'
Naturally, a lack of resources ties SMEs' hands; and the challenging economic climate doesn't help. Fighting fires sparked by declining sales or escalating costs will clearly be seen as more important than preparing for a scenario that has yet to happen.
Quote from Dr Goh Moh Heng
As Business Continuity Management (BCM) Institute president Goh Moh Heng points out, some SMEs will have given BCM a thought, but their approach is to implement it on the fly as the situation develops. 'And that's the wrong way to do it.'
Dr Goh recommends sitting down and thinking through a company's critical functions, planning what to do if there is a flu outbreak - and documenting this plan, so everyone knows the role they are supposed to play.
'First, identify what's critical to your business,' he says. 'Normally, the managing director or CEO of the SME will have to decide: if there's an outbreak, what are the business functions we must do and what are those we need not do?
'The principle is this: find out what you need to do. Because there could be 70-80 per cent of the things that you will not need to do. What is the barest minimum you need to do? This must be decided straightaway. Once you've decided, the next question to consider is: well, we may not have access to our office, so what should we do? These are what we call the Business Continuity strategies.'
For SMEs, a Business Continuity strategy does not require a big-bang approach like it would for an MNC. Dr Goh says simple strategies such as working at the MD's house, hosting a back-up server in the CEO's home office and conferencing via Skype are possible solutions that will fit SMEs' operational scale. A simple rehearsal can be carried out so that the SME can identify parts that may be missing from the plan.
Ron Chua, a business continuity management consultant with Marsh Risk Consulting, says: 'The key steps are to implement measures that literally stop Influenza A(H1N1) at the door, prevent contamination from the work environment, reduce the concentration exposure and risk, and increase the availability of staff through a combination of work-from-home, shift work and cross-training to create redundant skill sets.'
For manufacturing companies, manpower planning is vital. Many of them depend on foreign workers, either commuting daily from Malaysia or living in Singapore. They will have to identify and decide what worker pool they can rely on under different scenarios - such as if the source country of foreign workers is also hit by a flu outbreak, or if borders are closed.
Similarly, with most raw materials coming from outside Singapore, SMEs in the manufacturing industry have to give their supply chain management some thought. Mr Forbes says that, in addition, a copy of each customer's contact details should be printed and stored at the boss's home.
According to the Singapore Business Federation (SBF), the adoption of formal BCM/BCP standards among businesses here has been slow, although national standard SS540 (formerly known as Technical Reference 19, or TR19) has been around more than three years.
SBF chief executive Teng Theng Dar points out: 'Formal and national BCM standards such as SS540 and BS25999 are relatively new, and it will take time for companies to formally adopt either standard or both.'
Still, it is not too late. To encourage take-up among SMEs, Spring Singapore has set aside $30 million to support up to 70 per cent of cost incurred in obtaining BCM certification. The government has also said SMEs that provide essential services will be given preferred status in government procurement exercises. It is also considering making disaster-ready certification a mandatory requirement for those supporting the public sector.
So far, SBF has received more than 70 enquiries from companies (predominantly SMEs) about SS540, says Mr Teng. 'And we have reached out to more than 300 companies through a national BCM programme launched on Dec 1, 2008.'
If anything, the turnout at yesterday's briefing on 'Influenza A(H1N1) and Business Continuity', organised by SBF and the Singapore National Employers Federation, is an indication of rising awareness among SMEs of the importance of BCM. The Rock Auditorium at Suntec City, where the event was held, was packed with more than 1,000 executives, mostly from SMEs. But whether they take the next step of planning and enforcing remains to be seen.
Urging swift action, Mr Forbes notes gravely: 'It's never too late to start planning for any disaster, including an infectious disease epidemic. Sooner or later, there's going to be a disease epidemic in Asia - as surely as the sun will come up tomorrow. Six years ago, it was Sars; two years ago, it was bird flu; this year, it's pig flu. Do you see a pattern here? How many more diseases do you need to see before you're convinced that Mother Nature is serious about thinning out the population?'