07, 2020 / 03:25 PM / by NECA / Header Image Credit: NECA
This Tool is designed to support your enterprises during the COVID-19 crisis. Chiefly that means by designing a bespoke "Business Continuity Plan" (BCP) for your business. The tool will enable you to:
1. Assess the level of risk and vulnerability of your business; and
2. Develop an effective risk and contingency system for the business.
This tool aims to establish the risk profile of your enterprises and the level of vulnerability to COVID-19 in terms of its impact on your People, Processes, Profits and Partnerships (the "4Ps").
The tool is mostly targeted at smaller enterprises with limited resources and structured in two parts.
1. The first part is a risk assessment that you can quickly do. It establishes the level of risk/vulnerability to your enterprises.
2. The second part of the tool is a six-step process - using an illustrative example of a fictitious SME - to assist you develop your own Business Continuity Plan.
Part 1: Establish your risk profile - Self-assessment
Indicate your answers to the yes/no questions below with an X. There are four sections composed of a total of 61 questions structured around the "4Ps" â€žPeople, Processes, Profits and Partnershipsâ€Ÿ. You can estimate your vulnerability level by adding up the number of times your answer was "yes" in each questionnaire.
Answer YES if you are not sure or don't know.
I People: Risk Matrix
II. Processes: Risk Matrix
III. Profits: Risk Matrix
IV. Partnerships: Risk Matrix
From this exercise, you will have identified which of the 4P's (people, processes, profits and partnerships) your enterprise is most vulnerable too (and which aspects or variables in particular). To calculate your total vulnerability, add up the times you answered "yes" in the four vulnerability self-assessments. Insert this sum in the cell below.
Interpretation of your score: your risk profile
This score does not rate whether your enterprise is good or bad. It is simply a benchmark of your enterprise and its vulnerability to COVID-19 that helps in the identification of areas where your enterprisesâ€Ÿ overall resilience to the COVID-19 crisis could improve. Most importantly it will tell you where you are most at risk â€“ your workers, your supply chains, your reliance on third parties.
Your enterprise is highly vulnerable to the negative impacts of the COVID-19 crisis. Your enterprise is quite likely to be severely impacted, which may cause long-term disruption in the event of a deterioration of the situation. Your next plan of action should be to identify whether you are most vulnerable to internal or external threats and take measures to reduce risk and vulnerability to COVID-19.
Despite having taken some action to increase preparedness, your enterprise remains vulnerable. Understand whether your threats are internal or external and make sure to prioritize your elements of vulnerability when establishing your business continuity plan.
You are on the right path towards becoming more resilient, but there are still some areas where you could reduce your vulnerability. Make sure to establish your business continuity plan in a way to manage risk of your internal and external threats.
Part 2: Develop a six-step COVID-19 Business Continuity Plan
The following are the six steps needed to establish your business continuity plan (BCP):
Step 1: Identify your key products or services
What are your most important products or services? Consider the following criteria:
Step 2: Establish the objective of your BCP
What do you want to achieve by establishing your BCP?
Step 3: Evaluate the potential impact of disruptions to your enterprise and workers
How long can interruptions last before becoming unacceptable? What are the resources required and the suppliers, partners and contractors needed to conduct key operations?
Step 4: List action to protect your business
Use the 4Ps framework to do this. Actions to minimize risk to your: People, Processes, Profits and Partnerships (the "4Ps").
Step 5: Establish contact lists
More of your activity will be non-physical (WhatsApp calls, zoom meetings etc). Make sure you have accurate and update lists of all your key stakeholders.
Step 6: Maintain, review and continuously update your BCP
The following is an example of how a small business owner put together a BCP for her business
How a small business owner developed a BCP to mitigate the impact of COVID-19
Caro Corona is the owner of company producing canned sardines in Lagos, Nigeria. She sells her products directly throughout Nigeria and to larger firms who export. Caro relies on consistent orders from three companies for about 80 per cent of her business. These companies due to their connections to the export market send regular orders. As COVID-19 cases spread in Nigeria, Caro developed a BCP to protect her business. She has a total of 60 workers.1
Caro completed the COVID-19 Risk Assessment test and realized her risk profile was high. She dealt with multiple suppliers on a daily basis. Her workers worked in close proximity. She was reliant on the port staying open for much of her sales. The rest of her sales mostly went to other Nigerian cities and she needed reliable transport links. Caro realized she needed a BCP.
Step 1: Caro identified her key products
For Caro, her main products are different types of canned sardines. Sales of these products are the sole means of revenue generated. Her client base is relatively small. She has three main customers who constitute 80 per cent of sales. The cost of non-delivery to these customers would have very negative consequences on her business.
Step 2: Caro established the objective of her BCP
The goal was to develop simple internal processes for her business that would provide key protections for the "4Ps": people, processes, profits and partnerships. This meant:
Step 3: She evaluated the potential impact of disruptions to her enterprise and workers
She assessed the impact of disruptions to her key operations. What operations are required to produce and deliver her products and what is her tolerated downtime: how long can key operations be out of action before it becomes highly damaging to the viability of the business. She identified what operations were required to produce and deliver her products and where the risks where located? This involved a short stakeholder mapping exercise. There are five main stakeholders that are critical to her business: Workers, customers, suppliers, support services and regulatory authorities.
This exercise showed Caro how dependent her businesses is on external actors remaining healthy and in the case of her suppliers, support services and customers, able to stay in business. She quickly realized that she could potentially go bankrupt within four to six weeks if she was badly disrupted. She assessed "what would be the impact of not conducting her key operations?" She looked at each of the stakeholders above and realized that any disruption to them would mean a disruption to her business.
She assessed her main potential disruptions as follows:
She thought about the events that were outside her control and how they could impact her suppliers and what were within her control that she controls to some extent. On the negative side, she was highly dependent on others, chiefly her suppliers and she has no influence over government restrictions that may come. On the positive, the demand for tinned/canned products was rising.
Step 4: Caro took actions to protect her operations
Step 5: Caro established contact lists
Step 6: Caro maintained, reviewed and continuously updated her BCP
She reviewed and updated her plan every week to: