Top 10 business continuity issues for 2011

Having survived a successful World cup and emerged relatively intact from a recession that is still causing havoc in the major economies of the West, South African business enters 2011 with cautious optimism.

While a positive outlook may be warranted, well-governed businesses cannot ignore the real risks that will face South African companies in 2011, a year in which IT leaders especially can expect to shoulder more responsibility in terms of risk identification and mitigation.

“Whether it's an economic recession, crumbling infrastructure, social unrest, or any combination of these or other events, 2011 in South Africa is likely to be the year business continuity plans are put to the test,” says Allen Smith, CEO of ContinuitySA.

“We're facing threats of unrest, as well as political, social and economic instability not seen in the last 15 years.

“Unfortunately, due to the poor economy, many companies are skimping when it comes to business continuity management; some are even ignoring their corporate governance responsibilities altogether, despite new legislation. This is dangerous as 2011 is not the year to take such an enormous risk.”

Smith believes the following will be the top 10 issues businesses will face in 2011, which will cause them to test the efficacy of their business continuity plans.

1. Recession

While there may be substantial talk of beating the recession, the reality is it will take some time and careful management before the economy stabilises. The year ahead may well bode well for the economy, but the recovery is expected to be patchy at best.

We must also consider the global economy and its effect on South Africa. Ireland is the latest on a fairly long list of European problem children, which will have a ripple effect on the African continent.

2. Government performance/service delivery

All the talk and political manoeuvring aside, the lack of basic service delivery from government will continue to escalate and even expand to all segments of society. Government's inability or unwillingness to act will be met with more social unrest and the radicalisation of the poor. From a business perspective, blockades and injury could prevent employees and customers from accessing your premises, or it could prevent your staff from getting to customers.

Then there are the health risks posed from poor services in built-up areas. A breakdown in emergency services seems unlikely, but can't be discounted.

And what more can be said about corruption?

3. Militant unions and more social unrest

Following on from above, 2010 saw the beginning of more militant union activity. Given the success of the unions in 2010, companies should expect more of the same in 2011. Even ignoring the economic realities of these activities, the corresponding social unrest will probably increase as radicalisation and/or criminalisation takes hold among the millions of unemployed, unless government finds a way to deal with the real issues facing the people.

4. Electricity concerns

Eskom is still a concern, and as the economy grows it will simply not be able to meet the electricity demands placed on it. The good news is that there are projects under way to alleviate the pressure, but one needs to consider the capacity to supply of electricity in context. Disruptions, blackouts and rolling blackouts may become a daily feature as they have been in the past.

5. Water contamination and flooding

Water is also a concern, not only the availability of water, but the availability of clean drinking water. Additionally, Gauteng's rising water table is a major concern, especially for those who build data centres and document archives in their basements. This is largely due to acid drainage from decades of mining, and is a problem that may be difficult to resolve.

6. Foreign nerves

With talk of nationalisation and the shenanigans happening in Zimbabwe, plus the points above, potential foreign investors are bound to be somewhat nervous about the risks of investing in South Africa. The BRIC (Brazil, Russia, India and China) emerging markets seem far more stable and investor friendly. The high levels of corruption will not alleviate this nervousness either.

7. The year of measurement

The new regulations and corporate governance best practices that will come into effect in 2011, including the new Companies Act, will make it a year of measurement. It will no longer be enough to make a best effort at corporate governance; compliance officers will need to measure compliance according to accepted standards and ensure their companies make the grade.

8. Supply chain continuity

Ensuring your business is secured is no longer enough to meet business continuity management standards. 2011 is the year companies include their supply chains in their business continuity and disaster recovery initiatives, measuring every internal and external component of their business to ensure they can continue operations in an emergency.

9. Cloud computing silver bullet

Cloud computing is all the rage these days, and analysts expect 2011 to be the year a significant number of companies adopt this concept. Smith acknowledges the benefits of cloud services; however, he warns that simply assuming your service provider is backing up your data or making accurate mirror copies is a mistake. Assume nothing and take the responsibility to ensure your data is secured.

10. Global climate change

We're used to hearing of climate threats, but sustainability is becoming more important and will soon be legislated. Preparing for unexpected climate surprises and ensuring your company makes every effort to build sustainable business processes is no longer politically correct, but a necessity. Do it before you're forced to.

“It doesn't matter whether you're a large or small company,” notes Smith. “If you need to operate to generate income, you have no choice but to understand the risks your company may face in the future and implement the relevant programmes to ensure you are able to deal with them, while continually measuring and improving your risk mitigation performance. The alternative is to simply hope for the best and this is no longer good enough.”