- Emphasis is placed on the key risks of doing business in Africa
Johannesburg, XX, [Date] 2013 – The level of interest by African organisations in Business Continuity Management (BCM) has risen in recent years. The report of a KPMG BCM Survey performed in 18 African countries in 2013, entitled “Business Continuity Management in Africa: Building resilience in a volatile environment”, reveals that a growing number of African leaders are concerned with key risks of doing business in Africa, such as, information systems and critical infrastructures disruptions, corruption, cyber attacks and fire dangers. As a result, IT disaster recovery planning is becoming a priority and crisis management and business recovery planning are also starting to form part of the agenda.
In Africa, most economies are growing at a rapid rate, compared to economies in more developed countries. Despite this, the continent is still plagued with old challenges in poor infrastructure, regulations and corruption. Added to this, in recent years, the continent has suffered from floods in West and Southern Africa, cyclones in Madagascar, earthquakes in Malawi and cyber-attacks threats. With significant investments into African markets driving rapid urbanisation and transformation towards modern societies that are more dependent on interconnected critical infrastructure, resilience planning to face natural disasters, cyber attacks, terrorism and other threats is a clear imperative to sustained and profitable operations.
“As business markets become increasingly more complex and competitive, to build on the opportunities and succeed, companies doing business in Africa need to consider internal, regional and global risks and build resilience to a volatile environment,” says Moses Kgosana, Chairman and Senior Partner at KPMG Africa Limited. “Africa’s fast economic growth has highlighted the need to pay more attention to risk management and ultimately to business continuity management as a corporate discipline.”
BCM is about a holistic process that identifies potential threats to an organisation and the potential impact those threats might have on business operations. The idea behind BCM is to provide a framework for building organisational resilience that safeguards the interests of key stakeholders by preventing financial losses and reputation or brand damage in the event of internal or external business disruptions.
BCM needs higher priority
According to the survey results, almost two thirds of the respondents have a BCM programme in place and 27 percent state that that have had their programme implemented for more than 5 years. Additionally, the survey noted that the people in charge of BCM programmes typically held high management positions, with the Chief Executive Officer having the ultimate responsibility over implementation in 50 percent of the organisations. Other common C-level executives who were responsible for the overall success of BCM programmes included the Chief Operating Officer (13 percent), the Chief Information Officer (12 percent) and the Chief Risk Officer (11 percent).
Although the appreciation of business resilience and the adoption of BCM programmes have increased in Africa, Business Continuity has not reached a state of maturity that it is being embedded in the organisational culture and only 26 percent of the organisations stated that they have a Business Continuity director that is fully dedicated to the function. In most organisations the role is assumed by another function, for example, an Information Systems Director or Risk Management Director with a partial dedication to the Business Continuity Manager role. In such cases it is possible and even likely that the BCM programme could become a second, or eventually a last priority, for the manager.
Added to this, the survey revealed that BCM standards adoption is still low in Africa, 61 percent of the organisations across Africa did not follow a BCM standard to support the implementation of their BC programme, less than 2 percent had their BC programme certified and less than 6 percent were planning to certify their BC programme in the next 3 years. The adoption of standards would allow organisations throughout Africa to follow international business continuity best practices and reduce current weaknesses in their BC programmes.
“We have found that many organisations in Africa either have not implemented the majority of the BCM components or have not reviewed them in the last three years. These businesses, for instance, don’t perform business impact analysis to identify critical business processes and adequate recovery strategies or have performed it so long ago that it does not cover recent business changes.” Says Cristina Alberto, Head of Business Continuity services at KPMG Angola and the author of the report.
In addition, these organisations often don’t have crisis management or business recovery plans, nor do these businesses perform regular BCM tests, exercises, reviews, updates and comprehensive awareness campaigns. This can be a direct result of the board’s ability to appropriately assign funding and resources to BCM responsibilities and the risk to these businesses is that they will most likely not be able to respond to an operational disruption in a coordinated manner or not have adequate recovery solutions in place.
“In these challenging times, Business Continuity should be a priority area on the corporate agenda. BC programmes cannot prevail without a clear and effective funding and resourcing allocation strategy that will enable the business to implement all required BCM components and keep BC alive in the organization culture. The only way to minimize risk and uncertainty is to be prepared to respond to a disruptive incident, keeping the business running.” concludes Cristina Alberto.
Notes to editors:
The survey reflects the viewpoints of about 150 business executives, was conducted between November 2012 and February 2013 in 18 countries through personal interviews and online responses, on their risk perception and their organisation’s business continuity management practices. This survey provides a reflection of the adoption and implementation of Business Continuity Management programmes in businesses that range from less than 100 employees (21 percent) to between 100 and 999 employees (48 percent) and those with more than 1,000 employees (31 percent) across markets and sectors, including; Financial Services, Telecommunications & Entertainment, Infrastructure, Government & Healthcare, Energy and Natural Resources, Consumer and Industrial Markets.
KPMG in Africa
KPMG has a clear commitment to serving our clients across Africa, supported by long-term investments, a robust pan-African strategy and business, with strong governance, and an unparalleled African footprint. We have an in-depth geographical and sectoral knowledge of the continent, allowing us to help our clients successfully navigate throughout their migration and growth in Africa.
KPMG Africa has a unified leadership team with representatives of all the major Regions, including Francophone Africa, which offers some of the most exciting development opportunities on the continent. KPMG Africa operates in all countries throughout the continent and has build up an unmatched coverage and reach in order to ensure that our 8500 KPMG professionals in Africa, can assist our clients wherever they take their business.
Whilst KPMG serves clients in all sectors across Africa, we are very cognisant of the 3 mega-trends of abundant natural resources, a one billion plus growing population and the urgent need for enhanced infrastructure that will collectively drive Africa’s future growth. As a result, we have made focused investments in the following high growth areas:
- Financial services
- Consumer Markets
- Energy and Natural Resource