Business continuity adds decision-making clarity in recession

London, 26 November 2008

Business continuity management (BCM) can help UK businesses manage through the downturn, according to Marsh, the world’s leading insurance broker and risk adviser. By conducting a business impact analysis, firms in the manufacturing and retail sectors in particular can gain more clarity on their current situation and secure a competitive advantage.

Martin Caddick, Leader of Marsh’s Business Continuity Management team, explained: “The natural reaction from companies affected by recessions or experiencing a downturn in their business is to ‘batten down the hatches’ and try to ride out the storm as best they can. This may include calling in debts earlier and trying to secure longer credit terms with their own suppliers, for example.

"It is a common misconception that BCM only has merit in managing a crisis situation or an interruption to service or supply. A proactive approach to BCM enables companies to develop a deeper understanding of their position in the market, their key dependencies and what creates most value to their business. Armed with a clearer picture of priorities, strengths and weaknesses, businesses can then afford to take a bolder approach and fight back against deteriorating economic conditions.”

Marsh recommends that firms undertake a business impact analysis, to include:

• A clear understanding of what creates most value for your business or is most critical to your success, such as your reputation, your financial strength, or product lines.
• A structured analysis of your business, identifying key interdependencies and points of vulnerability, for example, in the supply chain or customer relationships.
• Identifying what investment is needed to assure the levels of service or production that are required to sustain your firm, such as in fuel and transport costs, or multiple supplier strategies.

Martin Caddick continued: “Risk profiles change in recessions and companies in the manufacturing and retail sector with extended supply chains are particularly vulnerable to the vagaries of market conditions. A business impact analysis encourages honest and open dialogue across organisations that depend on each other, which is also critical to the recovery of the economy as a whole.”

Notes to editors

In April 2008 Marsh published its research, The Upside to Business Continuity, which examined the views and perceptions of Business Continuity and Risk Managers from organisations across Europe on issues relating to BCM.

The survey identified that, over the last 12 months, 50% of respondents found that they had a better understanding of their business, and 37% found they have improved their risk-intelligent decision making as a result of their business continuity management programmes.

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