Business continuity plans pay off
Category Business Continuity Management - BCM - Retail
Importantce of Retail BCM
Browsing through the newspapers recently you may have stumbled across an advertising campaign of a very different kind to the ones we are accustomed to seeing from Tesco.
It was, of course, the advertisements placed by the retail giant to reassure customers that everything had returned to normal in the wake of the fuel scare. The sale of contaminated fuel through its forecourts across the South East of England prompted flurries of complaints from car drivers experiencing mechanical problems, not to mention a weighty amount of media coverage.
Incidents like these are no respecters of name, heritage or status, which is why all businesses, big or small, young or old should be using Tesco's recent experience as a prompt to revisit their business continuity plans and disaster recovery processes.
Whilst it may not be exciting, or the sort of thing which senior industry figures want to spend too much time on, the problems of Tesco proved one thing; that putting time aside to put a business continuity or disaster recovery plan in place is time well spent.
I would imagine only a few people will be aware of the plans which Tesco had in place to deal with an incident such as this. However, with the headlines tailing off significantly over the past couple of weeks after the initial burst of excitement - you would have to surmise that they got their plans right.
For any retailer finding itself in a similar situation, with its reputation under fire after failing to meet customer expectations, those plans need to click into place as swiftly as possible to mitigate the damage to the business.
Customer complaints and fears need to be managed as swiftly as possible and staff need to be briefed to ensure they know how to handle complaints or questions. And it needn't all be doom and gloom; a problem dealt with quickly and appropriately can actually help cement a relationship with a customer and generate goodwill.
Of course, in retail it's the supply chain which will always come high up the list of priorities. Continuity arrangements in this aspect of the business must be instantly visible, viable and based on a realistic assessment of what could happen. In these days of increased outsourcing, complex arrangements between suppliers, distributors and logistics companies and warehousing, this is not as straightforward as it sounds.
A key consideration for keeping that supply chain going - or arranging alternative sources of supply - is the availability of people with the right skills within the organisation. Imagine having the best processes and contingency plans in place only for them to fall apart because the two or three key people required to enact the plans aren't in the right place, don't have adequate communication networks or on holiday without appropriate cover in place.
Colleagues of mine who deal in what we call Business Continuity Management (BCM) always point to the financial services sector as the example of what's coming next in terms of best practice thinking for wider ranging disasters.
Financial firms' BCM thinking now involves collaborative efforts between rival firms in terms of liaising with the civic authorities, other members of the business community and even the marketplace as a whole - as incidents which put business continuity at risk necessitate decisions to be made which affect liquidity, debt repayment, share prices and Stock Market confidence as well as operations.
By working together - and running expansive simulations - the financial community can be better prepared as a whole for the fall-out of any unforeseen incident. The fear has always been that a major terrorist attack which struck at the heart of the financial sector would have a major knock-on effect on the UK economy and this has dominated recent BCM thinking.
The challenges which Tesco encountered recently, the scares with bird flu, the wider ranging impact of the London bombs of July 2005 and the disaster fashion retailer Asos suffered when its stock was wiped out in the Buncefield oil depot fire are a wide range of examples which illustrate what different types of incidents can do to the retail sector in terms of the resulting consumer confidence.
Such contingency plans are now a sign of the times. No-one - not even Tesco - can afford to bank on public support to get things back on track if an issue arises.
Helen Dickinson is Head of Retail at KPMG
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