09 impact of terrorism on sme's & business continuity eagle foc

The Impact of Terrorism & Critical
Incidents, Inc’ Business Continuity By

T: UK. (0) 843 155 0008
E: drmarkdyates@aol.com
W: www.securityexpert.biz

1
© Dr. Mark D. Yates. T: UK. 0843 155 0008. E:
drmarkdyates@aol.com

The Issue

The tragic events of Post Sept’ 11th, in particular
July 7th 2005 in London, should make all HR
managers think carefully about how prepared
their business is for this kind of event.

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© Dr. Mark D. Yates. T: UK. 0843 155 0008. E: drmarkdyates@aol.com

The Problem

 Statistics suggest that almost half (46%) of London businesses
do not have a business continuity plan in place.

 This means that those directly impacted, suffering a major or
even a minor loss may find it impossible to continue to trade,
particularly if they do not have terrorism insurance cover.

Source: Vanson Bourne research, October 2004
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Critical Incident Downside

80% of all businesses affected by serious incidents
never re-open, or close within 18 months.

Business interruption hits companies in

 Customer Relationships.
 Cash Flow.
 Reputation.
 Staff Moral.

Understanding incidents like fire, flood or computer failure,
highlight where long term damage is done. 4

Small Businesses Hit Harder

 The impact of any critical incident is likely to be more
pronounced for SME’s. The majority of SME’s operate in
specialised markets with limited product ranges & relatively
small customer bases.

 Any short interruption to business can have a disproportionate
effect, totally halting output & leaving customers high & dry.
Source: AXA Insurance.

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Insurance
 The impact of this inability to trade will vary depending on the
insurance arrangements in place.

 Both sums insured, and cover need to be adequate.

 Without cover for both material damage and business
interruption, including an extension to cover denial of access,
and with cover extended to cover terrorism, these problems
could result in the business having to close permanently.
Source: Business interruption.
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What Is Continuity Planning

 It’s about anticipating crises that could befall a business &
planning for them.
 It sets out clear roles & responsibilities.

 It states who takes charge of specific roles.

 It lists a series of contingencies.

 Details clear emergency procedures to ensure risks to staff are
minimised.

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Continuity Planning

 Requires an assessment of all critical areas of a firm.

 Business continuity management is a valuable management
tool.
 Understanding potential crises, their effects & knowing how to
overcome them is the basis for business continuity planning.
 It’s also the best way to create firm company foundations to
ensure it is robust, flexible & fit for tomorrows business.
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Continuity Planning - Staff
If staff are injured, either physically or mentally

 When will they return to work?

 Will they return to work at all?

 Are there any liability issues towards them?

 Did they lose personal property in the incident or the
subsequent clean-up operation?
 Will the act of terrorism impact their ability to recruit new staff?
immediate help, support and counselling for people more directly
involved needs to be addressed.
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Continuity Planning - Customers

 If customers were unable to contact a business in the aftermath
of the incident, might they move their business elsewhere?
 If so, is it short-term or long-term?

 What would happen to businesses if some customers find a
better service or product elsewhere?
 Is a business seen as a high risk target by its customers?

 Has the incident changed customers’ habits?
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Business Continuity

Put simply, business
continuity is about
anticipating the events or
circumstances that could
hinder the running of a
business, and planning to
make sure that the business
responds swiftly and
continue to function in the
event of an emergency.

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business continuity plan
A business continuity plan sets out clear roles and responsibilities,
for example those assigned to manage all liaison with

 Customers.

 Employees.

 emergency services.

It lists a series of contingencies that enable key business activities
to continue in the most difficult circumstances.
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threats to a business
Examples of threats to a business are...

 A vital computer system is unavailable.
 Critical process machinery is damaged.
 Loss of key employees.
 The building, or part of the building, cannot be
accessed, and...
 Suppliers are unable to deliver.

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Common Small Business Disasters

 Fire/Flood
 Computer telecoms failure
 Key equipment failure
 People issues – illness,
resignation, maternity leave
 Denial of access to premises
 Product defects
 Bomb – terrorism threats
 Legal regulatory action
 Utilities failure

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Emergency Procedures
 Importantly, a business
continuity plan also details
clear emergency procedures
to ensure that the safety and
well-being of employees is a
top priority.

 Because it requires an
assessment of all critical
areas of a firm, business
continuity planning is a
valuable management tool.
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Commercial Benefit Of A Continuity Plan
There is also the commercial benefit to consider.

 Companies with business continuity plans are more attractive to
do business with.

For example

 Large businesses that rely on the outsourced services of third
parties will prefer to work with suppliers who have a Business
Continuity Plan in place. 16


Business Continuity Plans

 Terrorism is only one aspect of threats that can adversely affect
a business’s ability to trade. AXA Insurance recommends that all
businesses should assess their vulnerability and reduce their
susceptibility by developing business continuity plans.

Source: Douglas Barnett, risk control strategy manager, AXA Insurance

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Terrorist Attacks

Major disruption

to businesses and
personnel.

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Business Continuity Bespoke Guidance

Business continuity need not be complicated. AXA
Insurance has developed bespoke guidance
documents on business continuity for SMEs,
copies of which can be found at
www.axa4business.co.uk

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Potential Hazards
 The list of potential hazards to maintaining a successful business
after a terrorist incident is endless.

 All businesses should give serious consideration to producing a
robust business continuity plan.

 For SMEs it is even more important as they may not have the
resources needed to fall back on.

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Other Disruptions
Disruptions (not limited to terror) but including

 Economic

 Pandemic

 Transport accidents

 Crime

 Weather

 Social and environmental or any other event that threatens us.
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Fail To Plan – Plan To Fail

 Early in 2005, KPMG and the CBI surveyed businesses of all sizes
across London on issues such as transport needs, skills shortages
and how prepared they were for an attack on the city. In the
SME sector 78% of businesses said they were prepared for an
incident, but less than a fifth said that they had a dedicated
team to handle a major incident, and barely a quarter of SMEs
said they had managed to test their business continuity plans.
Source: Alun Bowen, partner for middle market in London, KPMG
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Pressurised Workload
 While these findings show that some SMEs are aware of the
risks and are rising to the challenge of doing business in a major
city, their workloads are often so pressured that business
continuity planning and testing can slip off of the agenda. The
issue of business continuity must continue to feature highly on
the agenda, particularly as insurers are now seriously looking at
how a business plans for a major incident before insuring them.
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Testing Plans
 The recent events in London demonstrate the need for SMEs to
have more confidence that the plans that they have in place are
effective. Testing plans is an essential part of any strategy and in
a sector which is so fiercely competitive and failure to effectively
plan how a company will continue to operate in the event of a
serious incident could see the more prepared companies
running away with your business.

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IT Support Systems

Numerous IT Companies

specialise in support

systems for Business

IT continuity.

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SME Business Continuity
The proprietor, director or owner of an SME will have to work
out what solutions in business continuity are cost effective,
scalable and appropriate for themselves.

Business continuity should be about commercial advantage,
leading to enhanced performance and inspiring confidence, not
just about survival or picking up the pieces.

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Disaster Recovery

Most large organisations have some sort of disaster
recovery plan for their IT. But where is the equivalent
HR disaster plan? If people cannot get to work and the
phone system in their office has been cut off, what
should they do?

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Remote Working Facilities

On a daily basis thousands of 'information workers' commute into
City offices to sit at an office desk and communicate to the rest
of the world using email and the phone.

With the right technology they accomplish this from home or
another remote location. So the provision of remote working
facilities should be a major part of the disaster recovery plan for
all employees, not just a provision for a few flexible workers.
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Uncertain Times
We are all conducting
business in uncertain
times. Protecting the
future of the firm has to
be the number one
priority for every
business manager.
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Firm - Too Small For A Business Continuity Plan?

 The smaller your business the more important it is to have a
contingency plan in place. Any incident, no matter how small is
capable of impacting your business & profitability.

 The size of any continuity plan will depend on the risks facing
each business – it will be as large or as small as needed.

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The Real Problems
 Incorrect mind-set - it will never
happen to me.
 Procrastination – I’ll get around to it
next week.
 Ineffective delegation – I’ll get
someone in the company to look at
this.
 We’ll test our plan sometime soon.
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Managing a Crisis

Lightening Never Strikes Twice...

 A business continuity plan is all about ensuring
that a crisis is managed effectively - before it
escalates to a disaster.

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Business Continuity Summary

 80% of all businesses affected by serious incidents never re-open, or close
within 18 months.

 46% of London businesses do not have a business continuity plan in place.

 Less than 20% of London Businesses have a dedicated team to handle a
major incident.

 barely a quarter of SMEs said they had managed to test their business
continuity plans.

 Insurers are now seriously looking at how a business, plans for a major
incident before insuring them.

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Our Professional Service
Our Threat Management Unit will

 Design

 Produce

 Test

 Evaluate

 Manage...
Your Business Continuity Plan.

© Dr. Mark D. Yates. T: UK. 0843 34
155 0008. E:

Contact Us
For a business continuity planning consultation,
or details on corporate training...

Contact our UK office today
Link Business Marketing Ltd
T: UK 0843 155 0008
T: UK (0) 151 721 9078
E: drmarkdyates@aol.com
W: www.elinked.eu

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© Dr. Mark D. Yates. T: UK. 0843 155 0008. E:
drmarkdyates@aol.com

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