Final report

m21q8

RSMKuwait-BusinessContinuityandCrisisManagement.pdf

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BUSINESS CONTINUITY & CRISIS MANAGEMENT

Thursday, 23 July 2020

AUDIT | TAX I CONSULTING

Content

1 Introduction

2 What is BCM and Crisis Management

3 BCM and Risk Management

4 What we know on pandemic crisis

5 What is the impact of crisis

6 What we know on current and expected economic trends

7 BCM Recovery Cycle

8 What should we do post crisis

9 What we expect to see in 2020 and 2021

10 What needs to exist and be operating effectively

11 Q&A

Reports that say that something hasn't happened are always interesting to me, because as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns—the ones we don't know we don't know. And if one looks throughout the history of our country and other free countries, it is the latter category that tend to be the difficult ones

Donald Rumsfeld

What is BCM

and Crisis

Management

What is BCM?

 Business continuity (BC) is defined as the capability of the

organization to continue delivery of products or services at

acceptable predefined levels following a disruptive incident.

(Source: ISO 22301:2012)

 An enterprise-wide program designed to sustainably increase the

resilience of critical business processes of an organization, reacting

appropriately to adverse events and enabling the resumption of key

business activities in a timely and effective manner

Three major plans that are developed as part of BCM

Business

Continuity Plan

IT Continuity &

Disaster

Recovery Plan

Crisis

Management Plan

Business Continuity Management Lifecycle

What is BCM

and Crisis

Management

What is Crisis Management?

 Crisis management is the process by which organizations deal

with disruptive events that could cause serious damage, be it

financial, health & safety, reputation etc.

 Crisis management is a vital organizational component to ensure

sustainability of organizations during such situations.

 Organizations need to take a rapid approach to ensure effective

crisis management and handling the threat sequentially.

Detection

Notification

Preparation

Response

Recovery

Crisis Management Lifecycle

COVID-19

Challenges

Financial Operations Technology

These are some major challenges that organizations have faced during the pandemic due the lack of continuity planning

COVID-19

Challenges

Financial Operations Technology

 Organizations had issues in managing their cash flows due to sudden reduction in budgets/revenues

 Cost management challenges

These are some major challenges that organizations have faced during the pandemic due the lack of continuity planning

COVID-19

Challenges

Financial Operations Technology

 Inability to manage employee working arrangements (shifts, hours, allocations) accordingly due to lack of

human resource continuity planning

 Vendor/Supplier/Sub-contractor related disruptions

 Ineffective communication with external parties like clients, gov’t bodies, vendors/suppliers, media, etc.

These are some major challenges that organizations have faced during the pandemic due the lack of continuity planning

COVID-19

Challenges

Financial

These are some major challenges that organizations have faced during the pandemic due the lack of continuity planning

Operations Technology

 We have seen many organizations were not able to conduct business operations because working from

home infrastructure was not planned

 Lack of hardware / software for remote working leading to inability perform daily operations

 Security matters were not considered when new technologies were adopted urgently

What we know

on the

Pandemic

10.7 Mill Cases reported worldwide,

as of 02 July

5.4 Mill Recovered worldwide,

as of 02 July

-0.8474 Change in US treasury

bond yield since Wuhan

lockdown on 23 January

515,000 Total deaths reported

worldwide

-6% Change in MSCI World

Index of global stocks since

Wuhan lockdown on 23

January

-2.3% Global GDP Tracker

(annualised)

Anatomy of the

Crisis

Source: RSM US LLP

Covid-19 outbreak • Loss of confidence

• Increase in uncertainty

• Lower capital and longer-term investment

• Negative wealth effect

• Digital modernisation deferred

Shutdown of normal life and

manufacturing initially in Asia and

then globally

Fiscal

policy

response

Maintain household income via:

• Plugging holes in private balance

sheets

• Increase social safety-net

spending

• Job creation via infrastructure

spending

• Job protection strategies

Monetary

policy

response

• Resumption of low interest rate

regime

• Forward guidance to increase

confidence and suppress long

end of yield curve to stimulate

investor activity

Demand

shock

Financial

shock

Supply

shock

Shutdown Exogenous

shock

• Loss of output from Asian economies

• Loss of income directly and indirectly

dependent on goods from Asian supply chains

• Loss of Asia’s demand for foreign goods

and “foreign” goods produced in Asia (eg

iPhones/tech)

• After initial stockpiling, loss of US/UK

domestic demand for goods due to

uncertainty

What is the

impact of

COVID-19?

 Staff Lay-offs

 Paid/Unpaid Leave

 Reduce operational hours

 Flexible working arrangement such as work

from home

 Work rotation

 Reduce/Halt output

 Closure of branches/locations

 Move to online and delivery services

 Cut capital spending

 Reduced procurement spending

 Cost cutting

 Delay projects impacting payments

These are some apparent actions that organizations have taken and we have observed them in the short term.

Crisis Management Cycle BCM

Recovery Cycle

Business As Usual

P e rf

o rm

a n c e

First lockdown

accouchement

12 March

Recovery Efforts – Current Focus

Business As Usual

• Emergency/Crisis Response Plan

• Business Continuity plans

• IT continuity plans

Second

Lockdown

announcement

26 March

Third Lockdown

announcement

22 April

Crucial Crisis Response Effort

Time

What to do

post crisis?

Phase 1 – Assess the crisis

 Assess the current situation (market

condition, recovery efforts, government

directions)

 Take the necessary decision to declare

crisis is over and ensure the return of

employees

Phase 2 – Post crisis recovery

 Assess the actual impact to the organizations

and develop the necessary strategies and

action plans to ensure full recovery

 Establish effective Communications with

stakeholder

Phase 3 – Maintenance

 Develop the necessary documentations

and plans following the crisis to enhance

resilience, and ensure continuous

activities

It is important for organization to take a phased approach to ensure recovery are successful and effective

We have addressed some actions that you can take in the upcoming slides.

Phase 1 – Assess the crisis

 Monitor market conditions and arrange staffing requirements

 Ensure the safe return of employees to office and continue to take precautionary measures

 Communicate positive messages to your employees and thank for their efforts

 Ensure flexibility with leaves and working arrangement

 Identify payments that has been delayed or pending repayments from clients/customers

 Re-assess technology needs and requirements at this point in time

 Revisit your Strategy

Question is, can we deliver all our services/product to our client?

What to do

post crisis?

Immediate Actions to Take

 Establish Workforce and

workspace plan

 Establish return to office criteria

and checklist

 Establish HR plans pertaining to

employee welfare and well being

Return/Re-activation Strategies

Requirements for

the returning

Hygiene & other precautionary

measures

Employee return to work

Technology requirements and

changes

Support for reactivation

Business support

Budget & funding management

Workspace planning / analysis

Scenario planning

Rolling forecasts

Revise Strategy (Finance,

investment etc.)

Phase 2 – Post Crisis Recovery

 Conduct an Impact and Damage Assessment on the organization. e.g. Impact on reputation,

financial, operational, etc.

 Assess any insurance coverages that can be claimed

 Develop and Communicate strategies and plan to your stakeholders on returning back to

normal operational capabilities. Involvement of PR highly recommended

 Conduct lessons learnt from the crisis and identify improvement plans.

 Document Post-Crisis report

What to do

post crisis?

Immediate Actions to Take

 Independent review of the business

action plans and communications

strategies and plans

 Review effectiveness of

crisis communication

plan and strategies

 Establish business action plans,

strategies and communication

channels

 Monitor current financial

position and establish

plan to limit losses

What to do

post crisis?

 Communicate re-opening strategies with KFAS centers and

external parties

 Build communication plans to protect brand and image with

customers/ visitors/ stakeholders

 Increase in digital marketing for communication

 Establish effective communication with the contributors

Communication plan & strategies Develop phased approach to the “New Normal”

 Determine the scale, pace and depth of immediate crisis

action required to sustain the operations

 Centers and employees will need to act on broader

resilience plans amid uncertainty about the future

 Consider new approaches to carry out activities/business.

Refocusing resources. Concentration on re-training and

rebuilding workforce capabilities and productivity

 Support and promote innovation. Better insight/foresight in

the pursuit of resilience, efficiency and to embrace new

opportunities.

Phase 3 – Maintenance

 Develop comprehensive BCM program to address crisis in the future

 Enhance and fine tune certain operational policies and procedures to adopt

a more resilient perspective

 Conduct BCM awareness training to employees to increase awareness

 Conduct live simulations/scenarios to enhance preparedness to face such

crises in future

 Ensure continuous stress testing and testing of BCM Plans

What to do

post crisis?

Immediate Actions to Take

 Develop/ Enhance BCM

Framework

 Enhance current operational

policies and procedures

Employee mental health and wellbeing

Employers must be mindful of employee mental health upon returning to work.

Kuwait has established a national counseling program (CoronaCare) that provides free

counseling sessions to those affected by the COVID-19 pandemic, i.e.:

 Medical health professionals on the frontline

 COVID-19 patients

 Individuals in institutionalized quarantine

 General public

What to do

post crisis?

Technology

post crisis

 Organizations have adopted the working from home arrangement during the

pandemic

 This arrangement involves providing users with certain IT

services/systems/devices to perform work. E.g. Laptops, IP telephones,

Hand held devices, VPN etc.

 Due to the fact that operations have alternative working arrangement, users

has been given additional privileges on systems to conduct daily

operations.

 Access rights producing segregation of duties conflict (e.g., Creation and

approval process by one person)

 System privilege access

 Administrative rights on systems

During Crisis

Technology

post crisis

These are some steps that your organization can take when the crisis is over and return to office is possible

Technology Post-Crisis Consideration

 Remove VPN accounts

 Review VPN access logs

 Disable access through mobile devices

 Ensure all tokens and dongles are returned back

 Ensure laptops are returned back

 Review all access rights granted to users and align to current situation

 Remove administrative and high privilege accounts that are no longer

required

 Re-route telephones back to primary office

Immediate Actions to Take

 Prepare an IT action plan for

returning to office

 Identify requirements for alternative

working arrangement based on the

workforce and workspace plan

 Communication to all employees

on IT action plans

Post COVID-19

What we would expect to see in during the remaining of 2020 and 2021

 Governments continue to support

business

 Country policies are changing to address

current situation

 Job market slowdown and lower

employment rates

 Consumer prices increase

 Budget cuts in governmental sector

leading to reduction in projects

 Less spending of disposable income

Economy

 Social distancing will continue to apply

 Companies stress on hygiene in

workplace

 Increase in expenditure for hygiene

products

 Increase in safety & hygiene awareness

Health

 Alternative working environment is a

norm (e.g., Rotation, Work from home,

Less working days a week etc.)

 Prudent spending on expansions

 Companies adopt digital means including

analytics

 At times, requirements for additional

cybersecurity requirements for working

from home conditions

 Reassess the need for full capacity

working on-site

Day-to-day operations

What Needs to

Exist and Be

Operating

Effectively

What Needs to Exist and Be

Operating Effectively

No Items

1 BCM Governance and Structure 

2 BCM Program Framework 

3 Business Impact Analysis 

4 Threat Risk Assessment 

5 Resilience strategies 

6 Testing 

7 Training and Awareness 

8 Business Continuity Plans and Operational Recovery Plans 

9 Incident Management Plans 

10 Crisis Management Plan 

11 Compliance and Monitoring 

12 IT Continuity plan and disaster recovery plans 

13 Cyber Security Incident response plans 

Conduct GAP

Assessment and

maturity assessment

Typically Clients request

Develop BCM

Framework program

and plans

Establish workforce

and workspace

return plans

Independent review

of business action

plans (Operation

and IT)

Independent review

of business action

plans and strategies

Enhance operational

procedures (HR,

Finance, Operations

etc.)

Independent review

of communication

plans and

improvement

Establish return to

office criteria and

checklist

Support on HR

recovery action plan

Conduct

independent post-

crisis assessment

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