Business Continuity Risks and Recovery

Transcription

1 Prepared for Annual Conference Novotel North York, Toronto April 9, 2013 Business Continuity Risks and Recovery Prepared by Aon Risk Solutions Walid Khayate, ABCP, M.Eng, M.Sc.A, Eng.

2 Contents 1. The World Today 2. Why Business Continuity Planning is important 3. Risks that can affect your company 4. Recovering from a disaster 5. Messages and Conclusions 1

3 The World Today Everybody has moved to a leaner, single-sourcing, fewer-supplier approach. Hey presto, what s going to happen? You are going to increase risk. - Tim Lawrence, managing consultant at PA Consulting The potential threat from natural disaster in Canada rose from 55% in 2010 to 81% in 2011 in a recent survey of 100 technology firms 2 We live in an interconnected world where geographical disasters and political unrest can impact businesses anytime, anywhere and any place

4 The World Storage of API Fill & Finish Transit In-house Supply Chain Manufacturing of API 3 Packaging & Labeling Customer Storage of finished goods & Distribution

5 The Real World Supply Chain 4

6 Business Continuity Planning Is Important 60% of companies face annually an unforeseen breakdown of 1h to 24h duration (Veritas, 2003) 40% of companies that do not have any business continuity mechanism and facing an incident, close down (KPMG, 2008) Objectives of a continuity management program: 5 To minimize business interruptions and to optimize service recovery To protect your customers, your suppliers and your reputation To protect your key personnel, your critical resources, your critical processes and credits

7 Business Continuity and Emergency Planning Do not confuse business continuity with emergency planning Crisis management Time 6 Emergency plan activation Actions to protect human beings and ensure their health and their safety *BCP: Business continuity plan BCP* activation Plan to minimize outage = resume services & activities as soon as possible at an acceptable level

8 Business Continuity Risks 7 Natural System/ technical Supply Systems Man-made Political Events Earthquakes, floods, storms (i.e., thunder, hail, lightning, electrical, snow, winter ice), tornadoes, hurricanes, volcanic eruptions, natural fires Hardware/software outages, programming/system errors Communication outages, power distribution (i.e., blackouts), burst pipes Bombings, explosions, disgruntled employees, fires, purposeful destruction, aircraft crashes, hazardous/toxic spills, chemical contamination, malicious code Terrorist attacks, espionage, riots or civil disturbances, strikes

9 What Really Causes Businesses To Fail 68% Human error Fire, power failure (lack of maintenance) 25% Technology failure System crash, loss of key data 5% Natural disaster 2% Intentional causes 8 Many companies fall into a trap of planning only for failures on a grand scale when it is the smaller interruptions that cause most losses

10 Top 10 Crises in 2011 Tepco Natural disaster News Corp Phone hacking scandal Penn State Misconduct allegations Blackberry Major outage Dow Chemical Olympic sponsorship Netflix Change in business model Sony Data breach HP Change in board members Qantas Labor dispute ECB Eurozone crisis 9

11 Recovering From a Disaster Case study Canadian media company (newspaper) Objective: Avoiding the loss of a daily edition of their main newspaper in case of disaster (mainly flood and fire) 10 From a facility point of view, 5 strategies have been put in place: Relocate to an Alternate Location Work from Home Shift Work to Unaffected Location Reciprocal agreement Stop Work

12 Recovering From a Disaster Case study 11

13 Recovering From a Disaster Case study BCP project costs($k): Consulting : $100 Human recovery site (rental cost): $90 per year Human recovery site (office equipment): $150 Human recovery site (IT equipment): $320 Forwarding phone service (50 numbers): $6 per year Mirror site: $750 Most expenses after a disaster are covered by a Business Interruption insurance policy 12

14 Recovering From a Disaster Case study 13

15 Disaster Recovery Standards and Policies Country Canada UK USA Australia CAN/CSA Z CAN/CSA Z CAN/CSA Z1600 Standards and Policies BS (2006) -2 (2007), BSI NFPA 1600 (2009) Asis SPC HB221 (2004) HB291 (2006) AS/NZS 5050 (2010) 14 Japan Singapore SS 540 (2008) Business continuity Guideline (2005), Ministry Economy Trade and Industry Business continuity Guideline (2005), Cabinet office Israel SI (2007) S.Africa SABS ,-2,-3 Austria ONR ) Denmark DS 3001 (2009) Netherland NEN 7131 (2010)

16 Messages 15

17 Business Continuity Starts With Preparing Give me six hours to chop down a tree and I will spend the first four sharpening the axe. Abraham Lincoln By failing to prepare, you are preparing to fail. 16 Benjamin Franklin

18 Conclusion Continuity Management Benefits Faster recovery Higher chance of success Speed of execution Retain clients Protect company s market share and equity Overall Advantages Protect and enhance your reputation in the market Reduce potential losses, lawsuits and damages

19 Natural Disasters and Canada Looking Forward Natural disaster coming to Canada Global warming Earthquake Climate change % Earthquakes recorded in Canada each year Of canadians live and work in zones of high or moderate risk of loss from an earthquake

20 Natural Disasters and Canada Looking Forward Survey conducted during the 2010 World economic forum Source: World Economic Forum, Global Risks 2011, Sixth Edition

21 Global warming

22 Global warming

23 Natural Disasters and Canada Looking Forward Forest Fire Flood Ice storm Ground stability Dryness and heatwave storm Hurricanes Distribution

24 Questions For further information: Walid Khayate, ABCP, M.Eng, M.Sc.A, Eng