26 Mar 2009, David Benyon, Operational Risk & Regulation
LONDON - The risk of failed business continuity management (BCM) is set to increase in the recession, as some firms collapse and others discover unforeseen interdependence due to outsourced areas such as technology and supply chains.
UK consultancy the Business Continuity Institute (BCI) estimates that UK firms lost approximately £11.1 billion - 0.8% of UK GDP - in 2008 due to major disruptions caused by BCM failures. As more interconnected firms go out of business, this cost is expected to rise.
"In the current economic downturn, customers and suppliers will inevitably go out of business and it is vital that an organisation understands its dependency on critical suppliers," says Lyndon Bird, technical director of the BCI. "Disruptions to the supply chain will be one of the main business continuity concerns for 2009 and will run way into 2010."
UK standards institution BSI British Standards this week released its new self-assessment tool for firms seeking BSI accreditation for their business continuity management.
"In tough economic times such as these, it is more important than ever for businesses to have the business continuity management systems in place that will help them stay afloat should operations be disrupted," says Mike Low, director of BSI British Standards. "BCM can be used to determine and invest in critical areas of the organisation, protect reputation and enhance stakeholder confidence."