How to tackle business interruption

ABC of BCM - Tackling business interruptions

Jun 28, 2019 | Sami Moilanen

According to Aon’s 2019 Global Risk Management Survey, business interruption is seen as the 4th biggest risk facing organizations globally. In some industries business interruption risk is ranked even higher with only quite loosely defined risks ‘economic slowdown’ and ‘damage to brand’ topping the business interruption risk. In the Nordics, the business interruption was evaluated as the biggest risk in business. Why is business interruption then such as big risk?

According to Aon’s 2015 Global Risk Management Survey, majority of companies who fail to recover from a disaster within one month are likely to go out of business. Continuity plans enable early recovery and corrective measures that are the key for continuity of operations. Studies also indicate, that the average impact of a system shut-down is one-half of a percent of market share every eight hours, and that it takes three years to recover that percentage of market share!

Business risks are no longer isolated by industry, geography or country. Economic slowdown, regulatory changes, cybercrime, terrorism, increased competition, damage to reputation, and other critical risks are complex, inter-related, and global in consequence. Large-scale natural disasters such as hurricanes, typhoons, and wildfires, not only devastate local communities - but also cause ripple effects across increasingly global supply chains. In fact, the combined economic losses in -17/18 due to weather related events were $653 billion (Weather, Climate & Catastrophe Insight: 2018 Annual Report).

Continuity planning starts with business impact analysis. Business owners should understand the interrelations and dependencies in processes and supply chain to be able to prioritize and create recovery plans.  By a systematic approach to analyzing the business assets, supply chain, product, and customer dependencies risks can be quantified, and more accurate decisions made.

Aon’s approach to business continuity management is not rocket science. We get to the point and assess the impacts of risks. We will quantify the total cost of risk and visualize the business impacts and dependencies to help you know your business even better. We will also help you create recovery plans for the biggest business interruption scenarios and can help you in developing a well-functioning and cost-effective business continuity management system. It’s all about building resilience to protect value!

We at Aon are here to bring value and help you in the best way possible. Maybe you want to know the level of risk management, -preparedness and continuity of your suppliers, maybe you want to improve the continuity of your own operations, or perhaps you are growing and want to assess the new acquired business or set optimal insurance limits. In any and all cases, if you have any questions regarding business continuity – please do not hesitate to contact us! Let’s discuss and see how we can help you.

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