IMPACT OF COVID-19
- We estimate global Gross Domestic Product (“GDP”) to contract by -4% from 2020-21 (~USD 3.5 trillion), with a bull-case scenario of -1% (~USD 870 billion) and a bear-case scenario of -7% (USD 6.1 trillion)
- From travel bans to citywide lockdowns and business / service suspensions, the pandemic has wreaked havoc on companies, especially those in aviation, hospitality (particularly food and beverage), tourism, and the broader consumer retail market
- Hence, the pandemic has seen many companies come to the harsh realisation that their existing BCPs are far from adequate and in some cases, non-existent
BCP
- A BCP is a plan that outlines the procedures and systems to be put in place by an organisation to prevent – and ultimately recover from – potential threats to the business
- A good BCP strategy requires: (1) solid design; (2) meticulous implementation (including testing and communication); (3) regular evaluation; (4) should be developed and overseen by a team that represents key functional areas of the company; and (5) have support from the organisational culture
- A best practice BCP design should include: (1) threat identification; (2) risk assessment; (3) business impact analysis; and (4) risk procedures
- When implementing BCP, firms should start with desk-top walkthroughs where key functional team members look for gaps in the plan and consider “what-if” scenarios, this may include the use of: (1) communication protocols testing (e.g. annual fire drills and call trees) and (2) disaster simulation testing
- Evaluation-wise, BCP should be tested under realistic conditions and reviewed on a regular basis, at least annually, and a robust documentation process must be put in place to make sure any future adaptations to protocols can be anchored to a relevant historical reference point
- In order for governance and oversight to be effective, organisations must develop reporting frameworks / tools that can be readily digested by senior management, with adequate key performance indicators (“KPIs”) and data visualisation in place
- From a cultural perspective, three key pillars required to deliver an effective BCP: (i) devolvement of power; (ii) taking ownership; and (iii) velocity of response
CORE PRIORITIES
- In the short-run however, in light of the ongoing pandemic, there are four core priorities which organisations should look to focus on: (1) mitigating infection risks; (2) controlling costs; (3) protecting revenues (i.e. insulating existing income streams or finding new leads) ; and (4) maintaining workplace productivity / staff morale
