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Weekly Updates"It's not a matter of if, but when."
That phrase is fast becoming the mantra for the potential of an avian influenza pandemic. It's also a line popping up increasingly--and with greater urgency in recent months--with respect to business continuity planning.
Given the seriousness of disruptive emergencies like 9/11 and 2003's Severe Acute Respiratory Syndrome (SARS) outbreak and major Central Canada/eastern seaboard power outages, organizations have been thinking about emergency planning for the past several years. But how serious are they in planning for a pandemic?
Industry representatives say while big organizations are planning, smaller ones aren't. And at least three major organizations--Canadian Manufacturers & Exporters (CME), Ontario Chamber of Commerce (OCC) and Public Safety and Emergency Preparedness Canada--have generated guides to help organizations stay in business during a pandemic.
The numbers
Business continuity is essential, and almost no organization would be untouched by a pandemic. But organizations often need a push to start the planning process.
Darren Jones, CMA, national director of technology risk for Protiviti Independent Risk Consulting, says the trigger for decision making is usually either an incident that affected the company or a heightened level of concern.
"Managers hear some of the statistics and it gets them fearful about the impacts," says Jones. "We advise companies to establish their pandemic preparedness as part of their overall business continuity management approach."
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Last year, CME developed its Influenza Pandemic: Continuity Planning Guide for Canadian Business. The driving force behind planning was the World Health Organization's recommendation that countries undertake "urgent action" to prepare for the continuing spread of avian influenza, known as the H5N1 virus or just "bird flu." By the end of 2006, it had infected 258 people and killed 153.
Pandemic flu is a global outbreak; while 8,000 Canadians die yearly from seasonal flu, a bird flu pandemic could claim up to 58,000 lives and last for a year or more, afflicting a third of Canada's population and affecting up to 35% of the workforce at any one time, costing the country billions of dollars in business disruptions. Worldwide, a full-blown pandemic could kill anywhere between 2 million and 50 million people.
The threat to business is in continuing operations. "As with any risk that threatens the viability of business operations, continuity planning is critical. All business will be affected by an influenza pandemic," CME's guide says.
Businesses will need to plan for up to 50% of staff absences during a pandemic peak for two weeks or more at any one time, with employees either being sick or at home taking care of family members. Essential services (information, telecommunications, financial services and energy) will be directly affected, with spin-off effects in other sectors (cancelling of orders, supply chain disruption and fluctuating business service demand). Some businesses will simply be disrupted by demand, others (in particular the leisure, restaurant and hotel industries) may see demand plummet.
The U.S. Congressional Budget Office has estimated that a pandemic would cost up to 5% of GDP; in Canada this could mean an impact of up to $60 billion; it's estimated that transportation and warehousing could see a 17-67% decline in demand; arts and entertainment a 20 to 80 per cent decline and manufacturing a 3 to 10% decline; conversely, health care could experience a 4-15% increase in demand.
Self-analysis a must
Gordon Cherry, CME's director of Trade and Commercial Policy, says CME has held workshops in Ontario and Alberta on preparing for a pandemic.
The most common question from business focused on "whether there is a resource for SMEs [Small and Medium Enterprises]--a short, easy-to-use template that small companies can take and apply to their operations and get it over with," says Cherry. "We've published an SME checklist and are currently working on a template product for SMEs for business disruption, including a pandemic."
Any business continuity plan will be big on self-analysis, and CME's guide begins with a series of questions:
* "Who will maintain your business?"
* "How can you adapt your existing continuity of operations to take into account the pandemic impact?"
* "How will you cope when businesses/suppliers you rely on are affected?"
* "How will you adapt to disruptions in the supply chain for raw materials, goods and services?"
* "How can existing return-to-work and travel policies be adapted to control viral spread among employees?"
* "How will you limit the economic impact of the pandemic on your business?"
The guide's creation was spurred by research that found that no guide existed.
"In fact, the only comprehensive guide that existed in the world was a publication issued by the government of New Zealand (and) no guide specifically designed for Canadian business," says Cherry. "We took the initiative (with Industry Canada) to produce the guide. Many large companies now have a plan in place for business disruption like a pandemic, especially global companies like Alcan. Most (smaller) companies simply do not have the time or resources to develop a plan specifically for a pandemic."
Pro-active at Alcan
Lili-Ann Mitchell, Alcan's senior advisor, program development corporate security, says planning was driven by a "high level executive mandate and a desire to protect our employees and shareholders' value. [It was part] of our Business Resilience objectives."
The Montreal-based company, Canada's largest aluminum producer with 65,000 employees and 470 operations worldwide, faces business continuity issues that include border closures and traveler restrictions.
The company implemented an Avian Influenza Special Committee, began constant global monitoring of avian flu, prepared a plan that included readiness for medical, security, HR and communications, disseminated information to staff and created an internal support network.
And other companies have approached Alcan for advice. "We have been solicited by many organizations for benchmarking exercises, which demonstrates the current trend," says Mitchell.
Business impact analysis
Companies should look to develop one overarching plan, says Darren Jones at Protiviti. "Too many plans covering too many emergencies lead to more confusion in the recovery process. The plan's essentials around crisis management, business resumption and recovery should all be similar, with parts in it that can be applied to specific situations."
Most important is a business impact analysis, Jones adds. "The business impact analysis looks at what are absolutely the essential processes that have to take place in Day 1, Day 2 or Day 5 when the company has to operate in this crisis management state."
For its part, CME is maintaining close contact with the federal government's private sector working group on pandemic preparedness and other associations to maintain readiness. That approach underscores the work of the U.S. and Canadian governments on issues such as ensuring minimal disruption to trade and reduced impact on border crossings. And it complements the efforts of the federal government's Public Safety and Emergency Preparedness Canada (PSEPC). PSEPC's website outlines "A Guide to Business Continuity Planning," with key points on planning for a pandemic.
At the local level, organizations like the Ontario Chamber of Commerce (OCC) are getting involved. According to Amy Terrill, OCC's director of communications, "we have been working on the plan [launched in January 2007] for some time. Our planning tool kit pulls into one very concise document the rationale for business continuity planning. We did a study following the SARS outbreak in 2003 across the province through our membership and found that a very large percentage--almost 80%--are not prepared for any kind of a major health catastrophe."
John Cooper is a Whitby, Ont.-based freelance writer.
RELATED ARTICLE: Further reading: CMA Canada's Business Continuity Management Guideline
Last year, CMA Canada, in partnership with the American Institute of Certified Public Accountants (AICPA) and the UK-based Chartered Institute of Management Accountants (CIMA), published a Management Accounting Guideline entitled Business Continuity Management. The guideline examines the components of a sound BCM strategy, helping readers identify the steps necessary to develop and/or strengthen their organization's business continuity management framework. It also includes examples of best practices.
CMA Canada members can download the Business Continuity Management guideline for free by visiting http://www.cma-canada.org/index.cfm/ci_id/1395/la_id/1.htm.
RELATED ARTICLE: What a Business Continuity Plan (BCP) must do:
1. Establish governance: decide who will be in charge during a pandemic (usually executive level representatives, with input from senior management and organization's security officer, Chief information officer and heads of business units). Identify essential employees and critical inputs needed to maintain operations. Prepare and train your ancillary workforce.
2. Business impact aanalysis: identify the company's mandate, critical services and products. Determine the impact of a pandemic on the company. Focus on establishing the priority of services or products for continuous delivery or rapid recovery; identify internal and external impacts of disruptions.
3. Plan for business continuity: prepare detailed response and recovery plans to ensure continuity. Plans must detail the processes that will ensure that critical services and products are delivered at minimum acceptable levels and within tolerable down times.
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