Last week, I was explaining to a client how a Business Impact Analysis (BIA) is the foundation to Business Continuity Management (BCM). Without a good BIA, you have a very shaky arrangement to keep your business keeping on during and after a crisis or business disruption. Sharing Charlie Maclean-Bristol’s insights on doing a BIA in the Philippines for a manufacturing client.
Charlie wrote: “I have been talking about doing a Business Impact Analysis (BIA), on the building manufacturing plants in the Philippines, where I am presently working. Someone asked me why I was spending so much time developing the BIA template and planning the BIA workshop. Surely, ‘as a consultant you have a standard presentation and template which only needs to be slightly adjusted to each client’. All consultants have a standard way of carrying out elements of the business continuity lifecycle. I have found with manufacturing, to make the BIA meaningful, it required a substantial adjustment of my methodology. I also had the additional dimension of conducting it within a different culture, with people whose first language was not English so this also required further thought. This week I thought I would share the lessons learned over the last few days of conducting a BIA workshop on manufacturing in the Philippines.
Normally when I do a BIA I like to conduct a workshop to capture the information; I am not a great fan of BIA interviews. During this project we decided in advance to go for a series of interviews followed by a workshop for the BIA phase. Our approach per plant was to get all the managers together on the first day and explain what we were doing, why it was important and how we would gather information. I felt at this stage it was very important to state that we were not auditing them, but asking them questions to understand what they do. Having the country manager’s buy-in was fundamental and him sending an email out beforehand, stressing the importance of business continuity, was essential in ensuring they engaged with us. We conducted a tour of the plant which took the remainder of the first day.
The following two days were spent interviewing managers from all the different departments. At this stage I was not trying to capture the BIA information but purely trying to understand their processes. A key matrix was produced to try and understand the facts and figures of the plant and the best data to capture. Should we capture the day’s stock at the various stages of production or tons of stock? Often we came up with a number of different answers speaking to different managers! The issue also came up regarding what stage you assess the plant with normal holding of stock. With the problem of defining what is normal, minimal holding or to take stock out of the equation altogether and just concentrate on each stage’s ability to produce? If we didn’t watch it we would end up with three BIA’s for different stock holdings! We ended up with taking the minimum stock, which they try not to go under.
On the fourth day was the BIA workshop. All plant managers attended. I was pleasantly surprised that they all turned up and stayed for the whole workshop. Before the workshop you never know, culturally, whether managers will dip in an out of meetings, spend most of the time looking at their phone (however interesting you think your workshop is) or have to attend to an urgent operational problem and escape.
Normally we would get each delegate to fill in a workbook for their own department and the workshop would be framed around helping them understand how to fill it in. Occasionally we have to go back to them and query the information if the workbook was filled out incorrectly, which is not too difficult if they are local. In this case, I felt it would be very difficult to collect information retrospectively, so we did the work on screen with the answers being typed straight into the BIA tables. This was effective as we came to a common agreement on stocks and all those attending contributed to inputting the data. Where this became more difficult was when we had 18 different activities; each one required to fill in their manning numbers which took ages and those that had done their numbers were nodding off!
When I first learned how to do a BIA 10 years ago, there was a great emphasis on capturing the cost of an incident as part of the BIA process. I saw people with very elaborate spreadsheets showing the impact of cost over time, which looked very impressive. Trying to do the same myself, I reached the conclusion that in most cases trying to capture the cost of an incident over time is meaningless and doesn’t tell us anything useful. There are too many variables within what we are trying to capture; turnover loss or profit, or in this case delayed income.
This is the first time in a while where I thought it would be meaningful to capture financial information. At present it is a ‘sellers market’ for my clients’ product so the market will buy all their production. We know how much they can produce at each plant per 24 hours, how much margin there is on each product and we can work out the loss or profit per 24 hours downtime. We have identified a number of threats and once the cost of possible solutions are identified, we can see if it is cost effective, looking at the number of days the incident will be shortened by, to put these in place to reduce the risk.
My final lesson is to ensure that your BIA is comprehensive and you don’t forget to capture key bits of information especially if you are going to ISO2230, as it may be very difficult to go back and capture it!”