Panic or Profits? BCP and Trading

Swine Flu puts business continuity in trading forefront.

In response to the ‘swine flu’ pandemic, more and more institutions are investing in business continuity plans that generate real value for the business. Thierry Charvet, marketing director, Orange Business Services - Trading Solutions, looks at options that reduce risk and add to the bottom line.

Business continuity planning (BCP) never goes away. But it does grab the headlines every time a newsworthy threat to business or society rears its head. Most recently the H1N1 ‘swine flu’ pandemic has forced businesses to re-evaluate their plans for managing the impact of a widespread outbreak of the virus on their organisations. But while the threat is serious, and awareness is high, the implementation of comprehensive BCP strategies is patchy at best.

A report by The Chartered Management Institute from mid-2009 reveals that only 52% of UK organizations have a clear business continuity plan for their operations with only 64% of managers responding that BCP is considered important in their organisation. This represents a significant fall from last year’s figure, which stood at 76%. Despite recognising the threat, 53% of organisations still have no plans to help them cope during a pandemic. What’s more, two out of three companies either don't know what to do in a disaster or remain unsure if their plan would work.

Perhaps these figures aren’t as astonishing as they look. After all, the flu pandemic coincides with the most severe economic downturn of the past 50 years and financial institutions have been more focused on the bottom line than ever before. But here’s the good news. A coherent BCP strategy is more than just a cost centre; it can add real value to the business which is why it is important to spend time with customers and discuss how to mitigate risk for any type of pandemic or disaster that may occur. Making the most of mobile.

Take the example of a typical trader working in a large city which plans to close transport networks and restrict travel during an outbreak of the virus. If he or she is equipped with email on a smartphone then work can continue from home, up to a point. But things really get interesting once that device automatically records voice conversations, paving the way for business to continue as normal. The most advanced solution is a laptop equipped with a soft phone that is integrated with all of the trader’s daily contacts and enables the user to make calls through their computer over the internet or through a virtual private network (VPN).

The beauty of this approach is that it is a natural extension of most flexible working strategies. We all know the value of mobile working, but until recently it’s been difficult to apply these advantages to trading floors because the communications technology is so much more sophisticated than the average business. Now, thanks to this latest wave of voice recording and soft phone solutions, institutions can both maximise the returns on their mobile working investment and protect the business from disruption.

Careful planning, intelligent investment

Of course the risk of a flu pandemic doesn’t reduce other existing dangers. To protect your business successfully against the threat of natural disasters and terrorism, to name but two, you still require careful planning and intelligent investment. But even here smart thinking can better protect the business and reduce costs. A good example is the way in which many businesses now share a disaster recovery site. Here, it’s important to consider the location carefully. In the past, many institutions have invested in back up offices within close proximity to the existing workplace. But when disruption occurs there’s the danger that security perimeters will also block entry to the new site.

That said, there’s more to selecting a secure back up site than just distance. Location is everything and a site close to as many reliable transport connections as possible is essential. This is especially critical in the early days after a crisis when employees need to relocate and may be disorientated and anxious. Businesses should also consider taking a staggered approach to relocation. Many institutions have identified the most valuable 20% of the workforce and invested in a continuity plan that ensures that these employees can relocate and continue working with little or no disruption to their activities. The second phase of their business continuity plan kicks in over the following two to three months as their BCP partner expands these facilities to enable the entire workforce to be housed in a new work location.

This is also a good example of a smart service level agreement (SLA) that guarantees a business can continue as smoothly as possible, without over investment. Other critical SLAs include ensuring that a BCP partner guarantees to test and prove a disaster recovery strategy both on a regular basis and when required by a regulatory authority. France is a good example where the Autorité des Marchés Financiers (AMF) is authorised to audit business continuity with little notice and many financial institutions are now including the responsibility for compliance in their BCP contracts.

Putting people at the heart of business continuity

But while process and planning are important, perhaps the most important evolution in BCP in recent years has been the growing focus on the people involved. Rather than treating employees as just another part of the process, firms are increasingly considering the human factor when it comes to disaster recovery. For example some financial institutions have put in place best practices such as teams on standby to deal with the psychological issues that arise when disaster strikes. They will be present on the trading floor and available for private meetings to ensure that traders, however resilient, have a safety net if the pressure of the situation becomes difficult to bear.

Another example of this approach in action is an institution that plans to use a hotel as its disaster recovery site. As well as providing a more welcoming environment for employees, it also offers a flexible base for a coherent public relations strategy. At least one conference room can be nominated as a press relations area, where the institution plans to keep the press and public fully aware of the latest developments, above all aiming to ensure that the ‘business as usual’ message is clear at all times.

No clouds on the horizon

Finally, it’s worth noting that technology is keeping pace with the latest thinking in business continuity planning. Distributed and cloud computing enable organisations to replace a single point of failure with systems that provide guaranteed failover. Service-oriented architecture (SOA) replaces monolithic infrastructures with closely integrated but independent systems. In addition, communications protocols such as Multiprotocol Label Switching (MPLS) combined with the facilities brought by the session initiation protocol (SIP) make it easy to create "virtual links" between different trading sites so that calls can be rerouted quickly to another office if necessary.

Put simply, all these technologies mark a decisive shift in the role of business continuity planning. They offer outstanding resilience, but they also provide employees with the platform and tools to work more flexibly and efficiently. With intelligent investment and careful planning, institutions can kill two birds with one stone by addressing the imminent threat to their business and putting in place an IT and communications infrastructure for growth.