New KPMG study shows a rapid adoption of business continuity management programmes in China over the past two years.
||While a majority of companies have continuity plans, many do not yet conduct systematic testing or measurement of those plans. |
||The economic downturn is heightening the risk of reliance on key vendors and suppliers in the event of a disruptive or catastrophic incident. |
Shanghai, 3 April 2009
A new KPMG study, entitled Business resilience in China, shows that a majority of companies in China now have established business continuity management programmes in place. The adoption of modern business continuity approaches has been particularly dramatic in the last two years, in light of key events including the 2008 Sichuan earthquake and Beijing Olympics.
. In addition to presenting survey findings on the resilience of companies across China, the report features four case study interviews with executives responsible for managing this critical issue.
While the increased awareness of business continuity should help to create more resilient organisations, the KPMG report also revealed some potential shortcomings. Twenty-four percent said that their programmes had never been tested and even where testing occurred, the frequency was often low. Thirty-four percent of respondents said that their BCM programmes were tested once every year with an equal number stating that testing was conducted infrequently or with no defined frequency.
"The lack of testing and measurement is potentially a critical issue, because in these volatile economic times, continuity plans need to adapt to operational and personnel changes," says Ning Wright, partner with KPMG China in Shanghai. "Business continuity programmes rely on clear communication and coordination between people, and with many companies currently experiencing increased staff turnover, redundancies or organisational restructuring, it is important that businesses regularly review their preparedness measures and be ready to adapt to changing circumstances."
Another concern raised by the survey was that many of the respondents felt that their employees were not receiving sufficient training on business resilience and continuity issues. This highlights a huge risk for these organisations, as having the right processes and programmes in place may count for nothing if their own personnel do not know what roles and tasks they need to assume in the event of a major disruption.
In the current downturn, understanding the interdependencies and vulnerabilities of key vendors and suppliers is event more important. "Many international organisations own or outsource operations in China and the preparedness of these operations can form a critical part of their global resilience," says Ms. Wright. "Twenty-eight percent of respondents in our survey said that no external organisations were involved in their business continuity testing, illustrating that a large number of organisations continue to misguidedly view business continuity preparations as a solely internal process."
When asked which external organisations were involved in BCM exercises and tests, the participation of technology service providers figured highly at 48 percent, followed by supply chain partners (33 percent) and emergency services (20 percent).
The appreciation of business resilience and continuity as critical issues is illustrated by the people in whose hands the BCM processes reside. According to the survey, the key people in charge of BCM programmes held relatively high management positions. Eighteen percent of respondents said that their executive board was responsible for overseeing implementation of the programme, with 25 percent indicating their general management was the primary owner of the process.
To read KPMG China's new report, click here or visit www.kpmg.com.cn. In addition to presenting survey findings on the resilience of companies across China, the report features four case study interviews with executives responsible for managing this critical issue.
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