Eskom’s implementation of planned power outages, paired with the collapse of a coal silo at Eskom’s Majuba power station, highlights that effective Business Continuity Plans (BCP) are becoming increasingly critical for the survival of local businesses and ultimately the growth of the economy.
This is according to Greg Comline, General Manager of Global Continuity South Africa - a group company of JSE-listed Metrofile Holdings Limited - who says it is essential for local businesses dependent on power supply to implement a BCP to avoid financial, reputational and legal repercussions in the event of planned or unplanned power outages.
“As we see an increase in load shedding, we have seen an increase in the number of sub-stations that have been affected by the power fluctuations and this often causes even longer periods where power is not available.”
He explains that not only do power fluctuations impact daily operations but they can also lead to damage of critical company data, which gives rise to another leading cause of business disruption known as data corruption. “Data corruption can result in transmission and storage errors causing unintended changes to the original data.”
The main function of a sound BCM plan is to enable a business to avoid disasters or continue functioning at a sustainable level following a major disruption to critical daily operations, says Comline. “This is done through the identification of certain businesses processes that must be recovered within a certain time frame in order to continue supplying critical products and services during adverse operating conditions, or alternatively to ensure that business processes are not interrupted by disastrous events.”
Comline points to key processes that must remain functional to ensure continuity of service which include but are not limited to: revenue collection; communication with staff, suppliers and clients; service delivery; logistics and procurement.
However, he adds, it is also important that the BCP is tested regularly to ensure it will be effective in the event that it is required. “The last thing a company needs is an ineffective BCP when disaster strikes as this will not only delay services and operations indefinitely and impact the bottom line, but also frustrate customers and employees, whereas the implementation of an effective BCP will assist to develop an embedded resilience within the organisation.”
Business owners need to protect the company from being crippled by financial damage and ensure that the confidence of stakeholders and customers remains unshaken in the event of a business interruption, says Comline. “The repercussions for businesses without an effective BCM solution can range from loss of revenue and clients to tedious litigation and penalties. There are also personal consequences for the business leaders as they could face Director or Officer Liability cases on the basis of negligence or criminal liability.”
Unfortunately, no insurance policy is able to keep a business running - it can pay for damages caused, but it cannot answer the phones, communicate with clients or satisfy stakeholders when a major unforeseen interruption renders the business incapable of continuing mission critical activities, says Comline.
“In a time when disruptions to business operations can occur at any moment, all businesses have a responsibility to clients, employees and stakeholders to ensure a tested plan is in place which allows the organisation to continue functioning at an operational level even in the event of a disaster,” concludes Comline.
