Investing in business continuity management
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Investing in Business Continuity Management. ISSA 2003 Rick Cudworth International Service Line Leader for Business Continuity Management KPMG LLP. Agenda. What has changed? Why should I invest? How do I determine priorities? What are my options? How do I maintain my investment?

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Investing in business continuity management

Investing in Business Continuity Management

ISSA 2003

Rick Cudworth

International Service Line Leader for

Business Continuity Management

KPMG LLP


Agenda

Agenda

  • What has changed?

  • Why should I invest?

  • How do I determine priorities?

  • What are my options?

  • How do I maintain my investment?

  • What is my return on investment?


What has changed

What has changed?

  • September 11, world-wide terrorism, anti-globalisation

  • Increased regulatory pressure

  • Corporate governance

  • High dependence on information availability

  • Customers expectations

  • Employees livelihoods


Why should i invest

Why should I invest?

  • Market

  • Brand value

  • Market share

  • Position

  • Customer loyalty

  • Cross-selling

  • Agility

  • Innovation

  • Reputation

  • Shareholders

  • Employees

  • Customers

  • Regulators

  • Financial markets

Business Continuity protects reputation and shareholder value

  • Costs

  • Customer turnover

  • Productivity

  • Backlogs

  • Recovery costs

  • Lost data

  • Litigation

  • Compensation

  • Results

  • Revenue growth

  • Cash flow

  • Share price

  • Competitive advantage


How much should i invest

How much should I invest?

Best

Resiliencein place

Good Recovery

facilities

Basic

Plans and

procedures

Cost of Recovery Solution

DonothingBest endeavours

Time to Recover


How do i determine my priorities

How do I determine my priorities?

Mission Critical

Better

24 hour recovery

Best

<2 hour recovery

Payment and settlement

Portfolio VaR

ATMs

Trading

Daily management information

Market risk management

Exchange Positions

Slower

Faster

Minimal

>5 day recovery

Basic

3-5 day recovery

Accounts payable

Manage Compliance

Project tracking

Manage tax

Non-Mission Critical


How do i determine my priorities continued

How do I determine my priorities? (continued)

  • Capabilities to recover first

  • Next wave of capabilities to recover

  • What capabilities need not be recovered

100

80

  • Regular mid-office/ back-office functions in place

  • Commence entrepreneurial trading (at reduced trade volume)

60

% of business recovered

40

  • Close manage and control positions

  • Key decision parameters are likely to be:

    • Cost (upfront and ongoing)

    • Time to implement

    • Flexibility

20

0

4 hours

Week 1

Week 2

Month 1

Month 3

Day 1

Day 2

Day 3

2 hours


How do i determine my priorities continued1

How do I determine my priorities? (continued)

  • React:

  • Manage:

  • Transform:

  • Is it sufficient to react to a disaster?

  • Is ensuring the availability of operations sufficient ?

  • Should business continuity capabilities be providedacross the extended enterprise?

React

Manage

Transform

Value

Recoverability

Availability

Competitiveness

Information assets

Competitive position

Physical assets

Risk

Facilities/ processes

Extended enterprise

Impact

Customer satisfaction

Customer

All stakeholders

Focus

Event

Downtimetolerance

Days

Zero downtime

Hours/ Minutes


What are my options

What are my options?

Hot , Warm , Cold ?

Determine recovery strategies that are right for your business

People

  • Promote continuity culture

  • Invest in training and awareness

  • Reduce reliance on key individuals

  • Demonstrate leadership, commitment and clarity of thought in business continuity

Technology

  • Invest appropriately

  • Choose scaleable solutions

  • Embed business continuity within the SDLC

Facilities

  • Flexible and scaleable

  • Share costs

  • Split-sites

  • In-house or Outsource (Syndicated or dedicated)


How do i maintain my investment

How do I maintain my investment?

Provisioning with maintenance and governance

  • Process driven

  • Efficient

  • Cost effective

  • Long term value

Cost effectiveness of BCM programme

Provisioning with maintenance

but without effective governance

  • Project driven

  • Inefficient

  • Expensive

  • Short term value

Provisioning without effective maintenance and governance

Time


How do i maintain my investment the testing element

How do I maintain my investment? – The Testing Element

Testing

  • Emergency Response

  • Crisis Management

  • Command Centre

  • Call Tree

  • Desktop Walkthroughs

  • Simulation Exercise

  • Live Test !

Types of Test

Risk Profile

Reward

  • Ensures the organisation has developed viable business continuity arrangements that work.

  • Ensures the business continuity arrangements meet the needs of the business.

  • Ensures the organisation has identified and trained personnel for their business continuity roles and responsibilities.

  • Low Risk

  • Low Risk

  • Low Risk

  • Low Risk

  • Low Risk

  • Medium Risk

  • High Risk


How do i maintain my investment the cultural element

How do I maintain my investment? – The Cultural Element

  • Practice managing the incident

    • Managing the immediate problems from capability loss

  • Practice recovering the business

    • Recovery/ restoration of all critical activities

    • Restoration of all data

  • Embed BCM within Change Management and Operational Risk

Making BCM a part of everyday normal business operations – managing risk so that I am always there for my customers and stakeholders.


What is the return on my investment

What is the return on my investment?

  • A Business Continuity programme can help drive:

    • Effective risk management

    • Lower cost of data management

    • Contained insurance costs

    • Lower economic cost of capital

  • A recoverable, resilient and robust operational structure will result in improved shareholder value and company performance.


British bankers association guide to business continuity management

British Bankers Association Guide to Business Continuity Management

The Guide contains:

  • Forward by Sir Howard Davis

  • Step by step approach

  • Real life examples

  • Addresses difficult challenges

The BBA guide provides some helpful tips to delivering a successful Business Continuity programme


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