Risk management includes the processes if assessing the risks, risk treatment as well as risk communication. Risk management is the basis of a comprehensive business continuity management as it offers an analytic basis along with an economic justification for decisions regarding the allocation of resources. Risk management is a continuous process or making business decisions in how potential risks are viewed and treated. In concept, risk management decisions are extremely complicated.
The complication appears because these decisions must overcome the uncertainties that surround the unlikely events with an adverse impact on the organization. Using risk management for contingency planning is able to provide a company with a considerable amount of savings through the smart use of insurance as well as the implementation of cost-effective strategies targeted at loss reduction (Engelman & Henderson, 2012, p. 4).
Promoting Self-Interest by Negotiating Rapid Recovery
It goes without saying that it’s all in the manager’s hands when it comes to recovering from emergencies and other business downfalls. By its very nature, recovery needs a leader that has all required resources to manage the business and to recover quickly from any business emergency. When department managers engage in promoting self-interests for the employees of the department, they do so regardless of the interests of other departments in the company (Cohen, p. 33).
This can be viewed as a political tactic to promote one department in the company while the rest remain unnoticed. Promoting self-interest of the workplace may not be the greatest solution in terms of department recovery as every employee will only be interested in achieving his or her goals without paying much attention to the state of the department and whether it is need of a recovery. A manager should help the employees to create mutually beneficial relationships in the department demonstrating a long-term importance of such connections. There is a chance that promotion of self-interests for business recovery will be beneficial, however, it will not have positive effects in the long run.
Challenges in Setting Recovery Time Objectives
It is generally not practical for an organization to instantly recover all operations after the disruption. Recovery Time Objective is the prospective point in time when the operation must be resumed in order to avoid any issues connected with the company’s ability to achieve its objectives. Different critical operations may have different RTO, and one critical operation may have a staggered RTO to allow operations to recover gradually. For example, an operation may have 40% capability within three days and 100% capability within eight days.
One of the main challenges in establishing the Recovery Time Objective is the fact that there may be unprecedented threats or crises that can lead to a disruption of the business process. These threats include destruction of a building, destruction of the processing area, outages in communications due to natural disasters, lack of the processing staff due to strikes or transportation problems.
These specific events that have a negative impact on the processing exist beyond the Recovery Time Objectives as the required time for their elimination cannot be calculated or planned through. Instead of establishing a RTO in such cases, it is better to make sure that the threats can be avoided. For example, an organization that has good security controls can avoid many security breaches. The security of this organization will also be impacted by the general crime rate in the area and the exact characteristics of the organization (Engelman & Henderson, 2012, p. 36).
RTO Longevity
The maximum tolerable period of a disruption is based on the impact resulting from interruption reaching a threshold, or maximum tolerable level. It may make sense, in many cases, to set an objective for partial or complete recovery. For example, if a team of people is deployed to a temporary location equipped with the resources they need, it may take some time for them to reconcile the information and make other preparations before executing any relevant activity the usual way (Drewitt, 2013, p. 69). In this case, the Recovery Time Objective may be shorter or longer depending on the given circumstances.
Business with High Levels of Interdependence
Business process interdependence is a characteristic that usually refers to the level to which a business process is self-contained. This means that it does not require any use of other processes. The process interdependence may significantly complicate the outsourcing of the business process as interdependencies among the organizational processes can limit the organization’s ability to separate one process from the others. Interdependencies often appear from the functionality of a certain process, and then determine the amount of enterprise-wide involvement needed to manage the outsourcing relationship (Saxena, 2007, p. 74).
A business that involves any type of supply chain has relatively high levels of interdependencies. The production of the product depends on almost all operational groups that function continuously. For example, if the manufacturing became disabled, then the assembly line will also be disabled, test and quality control will be disabled and so on.
References
Cohen, A. (2015). Fairness in the Workplace: A Global Perspective. New York, NY: Palgrave Macmillan. Web.
Drewitt, T. (2013). A practical guide to developing and implementing a business continuity management system. Cambridge, UK: IT Governance Publishing. Web.
Engemann, K., & Henderson, D. (2011). Business Continuity and Risk Management: Essentials of Organizational Resilience. Brookfield, CT: Rothstein Associates Inc. Web.
Saxena, S. (2007). Business Process Outsourcing for Strategic Advantage. New Delhi, India: Excel Books. Web.