If there’s one key takeaway that businesses learned upon going through the global COVID-19 pandemic, it’s that one always needs to prepare for the worst. Even after the threat of the virus started to dissipate, other disasters threatened to destabilise the recovering global economy. Some of the most pertinent examples include the Suez Canal blockage in 2021 and the Russian invasion of Ukraine in 2022.
The impact of such crises on the global supply chain is extensive and will be felt in the long term. Both investments and the markets they’re made in could buckle under the strain of multiple disasters, causing unprecedented volatility that’s never good news for the business sector.
That said, it’s in the best interest of both local and global companies to come up with business continuity plans to withstand the economic volatility brought about by natural disasters on a global scale, pandemics, wars, geopolitical instability, and other catastrophic events. Here’s what businesses should know about continuity, plus four strategies to achieve it amidst a volatile economy.
By prioritising business continuity strategies, businesses can better cope with global catastrophes and unexpected crises, leading to sustained recovery and success when the economic situation stabilises.
In the face of adverse conditions, businesses need to have robust plans that allow the continuation of their most critical processes. A business continuity plan is a vital set of strategies that allows companies to weather the storm and thrive after the worst is over.
Unfortunately, business continuity plans and risk management are often not the priority in an organisation. In fact, during the COVID-19 pandemic, it was revealed that few companies were prepared for such a global catastrophe to occur.
According to a survey by Gartner done in March 2020, only 12 percent of 1,500 respondents were confident about their readiness to face the impact of the COVID-19 virus. Moreover, 26 percent believed that the virus wouldn’t affect their businesses. These numbers illustrate an alarming lack of focus on risk management and business continuity, and they may explain global businesses’ haphazardness when rolling out emergency measures for their operations.
Knowing that global disasters could strike any time, businesses may now know the value of being safe rather than sorry. Companies are best off preparing their businesses to operate in volatile times—and, above all, assuming that economic volatility might occur sooner rather than later. Below are four strategies for achieving business continuity and further mitigating the economic effects of ongoing and future global catastrophes:
One of the first things a business must do even before a disaster happens is to identify its key operations. These comprise vital business functions that are required to keep a business alive amidst a crisis. Determining what a company’s key operations are will allow its members to focus on what’s important. Zeroing in on key operations by way of business impact analysis will help businesses utilize their resources towards prioritising these vital functions.
In preparing for the worst-case scenario, companies must be asking the right questions. How big is the potential loss of revenue? Will there be increased operational costs amid a disaster? What are the fines and penalties that the business may incur in case it can’t fulfil its financial obligations?
Aside from the financial impact of a volatile economy, businesses have to think about the people aspect of their operations as well. How will they serve their customers during the crisis? How can they support their employees through the tough times ahead?
The process of business impact analysis will paint a complete picture of the business’s threats and opportunities. It will reveal process dependencies along with openings to use resources such as digital infrastructure to mitigate the negative impact on the organisation.
In the wake of the COVID-19 pandemic, companies now understand how important it is to have digital infrastructure in place to maintain connectivity and keep operations going even if employees are separated by distance.
In the Philippines, infrastructure solutions provider Aboitiz InfraCapital has taken the lead in bridging the digital divide with projects such as the Unity Digital Infrastructure common tower venture and the installation of small cell sites all across the country. The Unity project aims to provide a shared cell tower for different mobile network operators (MNOs) to boost cellular signal and improve connectivity throughout the country. Meanwhile, the small cell sites increase the density of mobile signals for faster 5G deployment.
Thanks to these advancements in the digital infrastructure sector, workers can work from home utilizing cloud computing, video conferencing, and other tools to keep in touch with their colleagues and maintain productivity.
The next step a business must take after conducting impact analysis is to assess the risk that a particular crisis poses to the organisation. It’s important to identify threats and determine the implications for particular processes. For example, how will a geopolitical conflict impact a company’s personnel, supply chain, sales channels, and capital? In case of major natural disasters, does the company have access to backup servers and other related technologies to allow core business operations to continue?
Every company is different, which means that each business must develop its own specific risk management and mitigation strategies according to its own needs. Good starting points include the following:
In an economically volatile environment, decisions must be made quickly and efficiently. That’s why it’s ideal for companies to form business continuity management teams before further disasters unfold. Core leaders in this team must be trained to manage teams amidst a crisis. Moreover, they have to be fully knowledgeable and fully prepared to prioritise critical business functions.
In general, the team should include the following:
The team may also include an administrative assistant who supports the team and makes sure resources are available and ready for use. In addition, different leaders from critical departments should also be represented in the team’s business continuity plans. In fact, leaders from each department should undergo business continuity training and learn drills for more effective implementation when a crisis occurs.
To ensure that any company is prepared for a disaster, their strategies for business continuity must be tested and adjusted to fit specific threats. The different teams and departments should be agile and flexible enough to respond to the changing conditions of their environment.
As with most business processes, regular evaluation and updates are needed for the best chances of success. Businesses need to incorporate innovative technologies to ensure that they are ahead not only of the competition, but of future disasters at all times. After all, business continuity is about staying competitive even in the direst situations. An organisation that is adequately prepared for the worst can gain the market advantage, particularly after the crisis is over.
While economic volatility looms ahead, businesses can’t afford to be unprepared. They need to prioritise business continuity strategies to cope with global catastrophes and unexpected crises. That is the only way to gain a chance at sustained recovery—and sustained success in their respective industries—when the economic situation stabilises.