Business Continuity Management, a new challenge for the facility manager?

15 June 2007

This article is reprinted from EuroFM Insight Issue 3 - Business continuity has always been of vital importance to companies. It concerns, after all, the very survival of the undertaking. Business Continuity Management (BCM) has since its emergence in 2002 made steady progress and become an ever greater factor in the process of primary daily activities. The opportunities presented in these developments should give the facility manager food for thought.

Before we are able to assess opportunities and likely menaces we should, first of all, know exactly what BCM is. There is some ambiguity in the search for a proper description. Various descriptions emanate from different angles, most are unclear or incomplete.

This article uses the following description: Business Continuity Management is a management process for gaining insight into potential risks and for appropriate measures to be taken by (listed) companies to avert such risks and, in addition, preserving interests of the shareholders and the company’s image, as well as safeguard valuable company activities.

We may discern a number of risks. Static risks are inherent in active processes and techniques. For example: fire, storm, burglary, theft, terrorism and epidemics. Matters well-known to the facility manager.

Our thoughts go out to activities involving in-house emergency services, hospital emergency- response plans, security and working conditions. BCM also takes cognizance of dynamic risks (i.e. risks inherent to entrepreneurship):
....risk of loss (financial and image) caused by defaulting debtors.
....risk of depreciation due to market developments (share prices, interest rates, exchange rates, price
fluctuation)
....risks of internal (system) control failure and corporate governance.

Corporate governance.
Industry and commerce finds it more and more difficult to avail itself of all that the market may offer and,
simultaneously, manage or avoid risks. Ignoring this thesis could result in considerable damages to both the company and the environment. Familiar examples are Enron and, more recently, Ahold. These risks will affect both the company and her owners (share holders). Limiting risks, and where possible avoiding them altogether, requires sound policy enforced by proactive measures. Needless to say, it is of the utmost importance that this policy be maintained by proper supervision. We call that policy: corporate governance.

BCM’s assent.
Before revealing the opportunities provided for the facility manager, it would be interesting to reflect on BCM’s assent. What has contributed to this assent?

An increasing requirement for ‘incontrol’. To which is added, strengthened legislation (SOx and the code on corporate governance) forcing listed companies to develop a sound policy, proactively managed and
controlled through correct implementation. Non-listed companies too, though not bound by legislative policy, can no longer avoid BCM. They, also, want a reliable and stable image toward their clients and will therefore, in most cases, opt (in the main) for the code on corporate governance introduced in The Netherlands.

The Sarbanes-Oxley Act (SOx) is applicable to all businesses affiliated to an American stock exchange. This Act contains several rules and frames to which these businesses need to conform. Purpose thereof is the guarantee and verifiability of proper management and to prevent scandals, such as the wellknown Enron scandal.

The Netherlands has developed a similar law; its rules and regulations are recorded in the code-Tabaksblat, the Dutch ‘corporate governance code’. The code is named after Morris Tabaksblat, Chairman of the Governance Corporate Governance Commission, which was presented in December of 2003. This
regulation applies to all securities/shares quoted on the stock exchange in The Netherlands.

A second important development is a growing claim culture, for which companies need (and want to) cover
themselves. There is a need for assessment, analysis and requisite measures to avoid these risks, if for no
other reason than to guarantee continuity and to limit, and possibly avoid, any hazards.

We may, in addition, also discern another two developments: the global spread of viruses leading to pandemics (among which, bird flu) and the increase of (international) terrorist threats. Many facility managers may have already encountered such developments. Quite a number of organizations have tightened their security and revised and updated their in-house emergency services and Hospital Emergencies Relief Plan.

More and more general and technical services companies get engaged in BCM. Thus providing an important internal reason for facility management issues. The expansion of real estate and ICT involves the facility manager to an increasing extent into safeguarding the company’s continuity and the provision of necessary measures during calamities.

Hoe does BCM (with all its resultant activities and work involved) in fact, affect the facility manager? Does it
provide opportunities for more added value to the primary process? Or does it, in reality, endanger the facility
manager’s position?

New opportunities
Listed risks, critical business processes and measures to be taken in cases of calamities are set-out in a
Business Continuity Plan (BCP). This plan engages the whole organization and requires input from all sections and departments. The BCP will describe preventive, repressive measures and means for ensuring continuity. Preventive and repressive measures are often already recorded in a company emergency plan. The company emergency plan (including, among other things, the in-house emergency services and evacuation plan) is further developed in the BCP and integrated with existing continuity of service measures.

The BCP embraces all likely risks and excludes none. This is assumed on the basis that all risks may occur at some time or other, that the company is prepared for such calamity, and can, therefore, guarantee continuity. Critical business processes and likely consequences of a disruption are required to be put on record. It also has to clearly state which process has priority for a restart after a calamity. Required actions and measures will be worked out and recorded.

It may be apparent that the facility manager will in the near future have a central coordinating role in this process. Besides support for the primary process (realizing backup site/shelter, rehabilitation and power supply) the facility manager ensures inter-sectional coherence, and integrates measures in the Business Continuity Plan.

Whether this role is actually allocated to the facility manager, and could be successful, depends on a number of factors. For instance, the complexity and range of the organisation may be of dominant influence, as well as the relevant facility manager’s own abilities. There will be a growing demand on his knowledge, capabilities and capacities.

The Code on corporate governance (code- Tabaksblat) states, among other things, that: ‘Responsibility has to be shown for the setup, functioning and quality of the internal risk managementand control systems.’ This implies that the facility manager is obliged to make proper, substantiated choices on, for instance, access control mechanisms, visitor procedures and other activities related to safety and continuity.

Such developments require an evergrowing knowledge and professional skill by the facility manager. He must be well-acquainted with all critical and potentially perilous points to be able to respond suitably and adequately. Facility management therefore requires a constant and proper response to the primary process, which in itself, demands a wide and in-depth knowledge of BCM (and related legislation). This, no doubt, presents a challenge and requires specialist knowledge of the primary process and legislation.

Facility Continuity Management
There are divided opinions within Business Continuity Management concept about the role the facility
manager. I am of the opinion that BCM should be part of the future facility manager’s duties, and that it is
indispensable for optimal advice and support to the company. Therefore, current knowledge and skills related to risk management need to be extended with topics on continuity. The in-house emergency plan would no longer be a single issue, but will become an integral part of the Business Continuity Plan. In
short, the future facility manager will have to keep abreast and be one step ahead by broadening and gaining insight into the facility management area in general and that of risk-management in particular.

Prospects for the future lie in guaranteeing continuity. The facility manager has, in this regard a central,
coordinating role for establishing complete, correct and integrated data. Getting him involved in BCM business economics aspects is not recommended, as the average facility manager is short on knowledge, skills and affinity with financial matters, impact analyses and risks of inflation. Mapping the pitfalls of
depreciating stocks and shares should remain the function of line management.

Whatever facility discipline entails, not everything can, and should be, arrayed under facility management.
Facility management is a specialty and requires a well considered delineated field.

It is, in any case, a new and excellent challenge for the facility manager on issues of coordination, consultation and facilitation. And a new option to guarantee and continue giving value to the primary process.
Facility Continuity Management: upto-date business continuity and risk management!

Tessa Bakker is an FMI editor and works as interim- and project manager at Humanagement