BCM – A New Paradigm for Nigerian OrganisationsAdelakun Oluwafemi Adeshola MBA Risk management, AIOR, ARMA

Business continuity management (BCM) is a relatively new concept that in the area of business protection. However, organizations do not exist in a vacuum and organizations must seek to understand where its application will bring value as well as fits with other activities to support the achievement of organizational objectives. The subject and importance of business continuity management has received significant attention and awareness especially in developed economies of the world; however, it has received little or no attention in developing economies of Africa and Asia and as such many business leaders especially in Africa still do not recognize the starting point in developing these capabilities.

Business Continuity Management is a management process that identifies potential impacts that threaten an organisation and provides a framework for building resilience and the capability for an effective response which safeguards the interests of its key stake holders, reputation, brand and value creating activities.

Business Continuity Management (BCM) is a process that provides a framework to ensure the continuity or uninterrupted delivery of critical business operations and functions. It provides a basis for planning to ensure an organization’s long-term survivability following a disruptive event. BCM serves as a risk mitigant complementing a wider risk management framework, with direct focus on the management, prevention and containment of business continuity and operational risk. It involves instituting or developing strategies to continue the operations of your business despite a significant interruption (to its buildings, IT systems or employees) with the ultimate objective of restoring the business to pre-disaster levels.

No organization can have complete control over its business environment and as such all organizations from all sectors will at some point encounter possibility of disruptive incidents that have short and long standing impact on normal operations to the very destruction of the organization. Organisations are faced with a variety of threats and vulnerabilities as business disruptions can include natural disasters such as flood, tsunami, fire outbreaks, power outages, system failures, man-made disruptions and as such organisations would look beyond industry specific and a single class of crisis and disruptive event.

Unfortunately, most corporation both in public and private sector still live with this ‘it cannot be us syndrome’ i.e. ‘it will not happen to us’. The reality is crisis or disasters cannot be timed or precisely predicted and can strike without prior notice, which has the potential to erode huge amounts of government and stake holder’s wealth and investments. This was practically the case with September 11, 2011attacks in the United States which necessitated a revolution of Disaster recovery to a more proactive and strategic approach of Business Continuity Management

THE CASE FOR BCM - Its relevance to the Nigerian Business

For Nigeria, the relevance of BCM should increasingly become an issue of concern for proactive, forward thinking and strategic organisations. Many Nigerian organizations ignore business continuity management or are ignorant of the need for this initiative for a number of reasons considering that, Nigeria as a whole is not prone

to natural disasters such as earth quakes, tsunami and hurricane, forgetting that crisis or disruption is not limited to natural disasters. It is important to note that business disruption are not limited to natural disasters, but its causes are multifaceted including human generated interruptions. The British standard (BS25999) identifies a range of internal and external risks that could negatively impact on the operations of organizations; including fire outbreak, system failure, power outages, flooding, industrial action and strikes, succession failures, communication failure and any other events.

For instance the flood experienced in Nigeria over the past three (3) years is an indication that time and season are changing, the unimaginable is becoming imaginable, and the unanticipated is becoming reality. However, Nigeria in recent past has not witnessed such a degree of rain storm. Reports had it that most offices became inaccessible especially in Lagos, properties were destroyed, lives were lost and business activities became paralysed. In 2010, the flooding displaced more than two million people and inn 2011 over 102 people were believed to have died from the flood. In 2012, NEMA figures show that 7,705,000 people were affected by the flood between July 1 and October 31 2012 with death figures of 398 people. In Kogi sate for example, the most recent flood disaster rendered more than 600,000 people homeless. Property worth more than 2billion naira was lost and business and commercial activities were paralysed especially those involved in fishing and rice farming. The education sector was equally affected as some primary schools were shut down due to the sinking of school infrastructures and facilities.

This event will have a life time impact on business and families affected. Most importantly, businesses locate on the island close to the sea metropolis should begin to strategically think of the worst case scenario as experienced in Japan drawing inference on the fact that the Japan earthquake erupted from the sea.

Again, the trend and frequency of bombings in Nigeria in recent times should be a wake up call for Nigerian organisations. Yes some businesses might say they are not affected by the bombings as they are not located in the northern region. This is very short sighted because no one knows when Lagos or their region will be the next city of attack. It is therefore necessary to take a proactive approach to planning and preparing. Between October 2010 and March, 2013, Nigeria had witnessed over twenty different bomb attacks and explosions by terrorist in different locations with notable attacks on the United Nations office, police headquarters, Kaduna attacks as well as the Christmas day bombings in Abuja. For example the bomb attacks in the northern region of Nigeria will have a life time impact on business, lives and families affected. Also communication network Giant, (MTN) was equally affected, its network mast were been bombed which significantly interrupted its service delivery as it became a crisis they had to deal with. Not only were they losing customers to competitors, they incur substantial losses, reputation and brand damage. These losses were as a result of the absence of business continuity strategy. However, if business continuity management strategies were in place, this would have reduced the impact of such event. Not only has Nigeria recorded loss of lives and property as a result of these events, but these events have strategic implications for businesses and the nation as a whole. From the international community, Nigeria is gradually becoming a terrorist environment and this has a direct implication for foreign investments.

Furthermore, the recent Dana crash as well as its emergency response clearly shows the absence of BCM in the aviation industry and lack of coordination amongst

emergency agencies in Nigeria. This should indeed be a wake up call for the air force being a major stakeholder in the aviation industry and the Nation as a whole. The crash and its responses thereto send a negative signal to the public and to the international community on the effectiveness and preparedness of the air force, emergency agencies and the aviation industry at large. This then becomes imperative for the Nation to embrace Business continuity management, plan for different kind of disaster with a view accord importance to continuity planning in the budgets.

The wide-spread of eminent incidents, frequent bombings and terrorist attacks as well as the recent flooding in Nigeria have served to heighten the priority for embracing BCM initiatives, underlining the substantial risk of major operational disruptions to business and operations. The impacts of these crisis events should provide some impedance for a more recognition and acceptance of BCM initiative as a strategic function both in the public and private sector.

BCM is beyond just dealing with big impact; low probability events. It has become an essential enabler of organisational resilience as part of business as usual (daily operation) with direct attention and focus on identifying and protecting sources of value and value creating activities within an organisation.

Why Implement BCM Strategies?

The answer is that, sooner or later, all business will eventually experience some kind of disastrous events that will challenge their continuity. More often than not, crisis events and operational disruptions have severe impacts and implication for businesses which are often irreversible and this is why it is critical for businesses to make planning for BCM a key focus for management and operational strategy. When crisis ensue, organisations are exposed to losses ranging from financial losses, legal losses, reputational losses and loss of human resource which ultimately cannot be hedged via insurance.

Although, insurance on the short term will provide compensation and support in loss events, it does not provide or guarantees organisational resilience. However, long term issues such as reputational damage, loss of market share and customer confidence are not indemnified by such insurance. There are certain risks that cannot be protected by insurance, but can only be managed by contingency planning and preparedness.

Businesses therefore need to develop and implement BCM strategies in all facets of their operations as this will not only minimize their exposures and provide reputational resilience, returns on BCM planning efforts will also be maximized.

Not only that Nigeria in recent times have begun to witness terrorist attacks and crisis event which has put some business to a halt and claimed intellectual resources, threats such as fire outbreaks, physical attacks, deliberate cyber-attacks are more significant to business disruption and should be begin to put pressure on Nigerian business leaders to strategically integrate BCM initiatives into their overall corporate strategy with a view to preparing for the worst case scenario, as the worst is yet to happen. As a matter of fact, companies can never be in control of their business environment and as such, it is reasonable and logical to say that all organisations will at some point face business continuity risk. Unfortunately, most corporation still live with this ‘it cannot be us syndrome’ i.e. ‘it will not happen to us’. The reality is crisis or disasters

cannot be timed or precisely predicted and can strike any organisation without prior notice, which has the potential to erode huge amounts of stakeholder’s wealth and investments.

It is now clear that Nigerian organisations then need to have a holistic approach to business continuity management, considering that the unpredictable nature of events which can cause disruption continues to be a threat to which Nigerian enterprises cannot afford to dismiss. Organisations then can either try to prepare ahead to deal with an event or be caught off guard and suffer the consequences. Finally, unless businesses prepare in advance, disaster and disruptive events will inevitably shut down business operations’. It is unlikely that a firm without an effective BCM strategy will react positively in a crisis event and the probability of its survival and recovery is next to zero.

Adelakun Oluwafemi AdesholaMBA Risk management, AIOR, ARMAfemi.adelakun@uptimeconsult.com