10) It’s not sufficient to only backup and archive data off-site. Contractors must also conduct drills and consider
the possibility of system incompatibilities of software,
hardware, operating systems, or changing vendors.
We’ve heard numerous stories of companies that thought
there was adequate backup of key records at secure
off-site locations, but could not access these records
due to such incompatibilities when faced with business
restoration following a disruption.
Immediate Next Steps
Has your company conducted a vulnerability assessment,
completed scenario planning, conducted drills or exercises
of its system backups, or revised its written emergency preparedness and response procedures/protocols?
If not, then here are a few simple, immediate next steps to consider implementing to help your company be better prepared
for both avoidable and unavoidable business disruptions.
1) Undertake an insurance and risk management review
(see exhibit on opposite page).
2) Institute a planning team:
• Make it a team sport and a contact sport
• An interdisciplinary approach should yield
3) Identify vulnerabilities:
• Assess the potential for disruptions
• Determine the expected frequency
• Quantify the likely and worst-case scenarios
4) Inventory existing internal resources and determine
available external resources.
5) Assign functional champions for implementing process
improvements and monitoring progress.
6) Develop, disseminate, and drill on the new plan.
Disruptions do not have to be full-fledged disasters to be
serious distractions to business operations. The focus of this
article was to highlight the critical importance for all companies to consider their vulnerability to business disruptions.
In addition, our goal was to encourage companies of all sizes to
thoughtfully evaluate the likely frequency, severity, and direct
and indirect consequences (including the ripple effect of interdependencies) of such disruptions.
Implementing a Zero Disruptions vision and strategy is not a
program or initiative; it’s a journey that requires a starting point
and desired endpoint. Contractors must commit to the Zero
Disruptions journey and systematically undertake a comprehensive review of their operations at all locations.
Moreover, a crucial step in the Zero Disruptions journey requires companies to conduct robust scenario analyses and
desktop simulations to identify possible consequences of identified vulnerabilities.
The benefits of doing so may make the difference between
profitability and unprofitability, and may determine whether
your company survives or fails following what could be a pre-ventable or controllable disruption. ;
CALVIN E. BEYER is Vice President and Manufacturing
Practice Leader at Zurich North America Commercial
Middle Market in Schaumburg, IL.
He has 23 years’ experience in the insurance industry in
risk assessment, strategic risk improvement, and risk management best practice development in the construction
and manufacturing industries. He is a frequent presenter
at CFMA national and regional conferences, and is an
established author for CFMA Building Profits.
Cal is a member of the Twin Cities Chapter, a Spring
Creek alumnus, and served on the Executive Committee
and as National Secretary.
BRIAN J. COONEY, CCIFP, is the Vice President and
Chief Financial Officer of Barriere Construction Co., L.L.C.
in Metairie, LA.
Brian has been a frequent speaker at industry conferences
on such topics as Zero Disruptions, emergency management, and equipment preventive maintenance and replacement cost analysis.
Brian is CFMA’s past National Secretary and has served
as Chairman of the Heavy/Highway Committee and the
Succession Committee. Locally, Brian is a founding member of the Southeast Louisiana Chapter. In addition, he
received CFMA’s Debra Hahn Memorial Award in 2005
and was the 2009 recipient of the Danny B. Parrish Outstanding Leadership Award.
Phone: 504-581-7283 ext.141