Business consultancy KPMG recently conducted the first South African business continuity management (BCM) survey, focusing primarily on respondents from the manufacturing and financial services sectors, with a number also from other sectors, including mining, retail and social services.
The size of these respondents was measured by an annual turnover, with most of them being in the R100 million to R30 billion range.
BCM relates to the management of risks of interruptions to a company`s business processes, which is achieved by identifying the risks, understanding the business impact, and then deciding on and implementing strategies to mitigate these risks.
Some of the key highlights from the survey were that 76% of the companies surveyed have business continuity plans in place, which is 7% higher than that of businesses in the UK.
While this seems good, only 45% of the organisations were satisfied with the level of training given to staff on business continuity, meaning that these plans may not be executed as planned.
More than half the companies (57%) spend R1 million or less on business continuity, and 9% have no budget for this at all. The survey also revealed that at least 40% of companies would experience over R50 000 worth of loss per hour should a disruption occur.
A large majority (64%) indicated that funds are allocated to business continuity on a case-by-case basis, based on individual needs, while only 26% based funds allocation on the importance of data and systems.
Hardware failure was considered to be a major concern for 81% of respondents, while slightly fewer (78%) were concerned about software failure. Despite a number of disruptions being caused by power outages in the past year, only 31% of respondents indicated that this was a major concern area.
Just under half of the companies surveyed (49%) have significant highly complex systems with no manual alternatives, while 71% make moderate to significant use of third-parties and service providers, and are heavily dependent on these external processes.
"As companies` systems and operations become more complex and interconnected, so does the scope and extent of the business continuity plans. This also means that companies not only share risk from their own business, but also the risk from their suppliers and partners," says Graham Teare, director at KPMG Information Security Services.
"A supplier that loses a number of key staff may have a huge impact on its customers, who are reliant on the supplier for maintaining stock levels to cater for increasing demand."
He says there is a need to have closer collaboration with suppliers, vendors, customers and regulatory bodies to ensure the business continuity plans are adequate, although this increases the cost of developing and maintaining these plans.
"It is vital that companies ensure their asset inventory is up to date and that any changes to systems, operations, processes are incorporated into the business continuity plans to ensure they are up to date and cater for the businesses` changed processes," says Teare.
"Failure to do so creates unnecessary risk and may result in businesses taking much longer to recover, due to the application of outdated practices."
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