Business Continuity Plans Still Not Fully Tested

by Stewart Douglas

Story link: Business Continuity Plans Still Not Fully Tested

Over one third of businesses have not tested their business continuity plan a survey of risk management, which could adversely impact upon corporate performance, accord to a study into risk management and business practices released today.

The business continuity plan, designed as response to emergency unexpected situations to enable normal business to continue, is viewed within the insurance industry as a vital component to successful crisis management and risk handling.

In the research backed by HSBC and the Institute of Directors, almost 40% of those asked said their business continuity plan had yet to be tested, which shows a slight decrease from the same study last year in which 43% of those questioned had yet to examine the effectiveness of their plans for times of emergency.

Whilst the study shows a decrease in the percentage of those still yet to test their continuity plans, many analysts are suggesting that this is still ‘worryingly’ high, particularly in light of the severe flooding earlier this summer.

The survey also looked into the perceived threats to business, which ranked the loss of senior staff and complicated litigation as the main risks amongst those surveyed, despite the fact that many business had still not considered fully the implications of their continuity plan for such events.

Almost 70% suggested that the loss of senior staff would have a significantly detrimental effect on their business operation and their bottom line, whilst it was highlighted that, on the whole, companies with a turnover in excess of £5 million were much more likely to have a business continuity plan in place to enable continuation of business operations in times of hardship.

Whilst the insurance industry advises in favour of business continuity plans, many businesses are still failing to fully considered the impact of any plan they may have in place, leading to an increased risk of inefficiency and loss during crisis situations.