Businesses focused on need to beef up security

By Roger Blitz Financial Times 

Lyndon Bird is uncomfortable saying it, but the business that helps industry to prepare and cope with large, unexpected incidents is benefiting from one of those periods of growth when terrorism dominates world attention. 

More than 20 years in the business continuity industry has taught him not to expect these growth spurts to last long.  “There was a period when the IRA campaigns were a major concern, but that died away and people were less concerned about it,'said Mr Bird, who runs Continuity Planning Associates, a consultancy. 

The attacks on New York on September 11 caused another big upturn in business, but even that lasted only six months. This latest surge in demand following the London attacks may be another blip, but the signs are that businesses are taking seriously the need to beef up their security to ensure they can keep going should there be another attack. Medium-sized businesses have been making up the bulk of the 75 per cent increase in inquiries since August 1 at Continuity Forum, an independent group offering support, advice and best practice. 

Larger businesses have, in part for regulatory reasons, already spent millions on security and continuity planning.  “There has been more concern expressed by medium-sized organisations and these are the ones who had not been taking business continuity seriously,'said Mr Bird. 

Russell Price, of Continuity Forum, said:  “[Medium-sized companies] are now taking a greater interest, they are struggling in some respects to understand what they should be doing.'Smaller businesses remain unwilling or, more likely, unable to invest in business continuity and security. Mr Price said one retailer in Russell Square found that a lot of his passing trade vanished after the Metropolitan Police sealed off an area containing his business because of forensic examination of one of the four bomb explosions on July 7.  

“Many small businesses are on the edge. This might be enough to put him into receivership,'Mr Price said.

Many inquiries from small and medium-sized businesses are about insurance, but Mr Price said since September 11 there was a reluctance from insurers to provide cover.  “The insurance companies are making it clear in policies that terrorism is excluded and that cover for other areas, such as loss of IT systems, might not be available.'Inquiries from SMEs are naturally focusing on the more affordable items of security and continuity, such as CCTV, glass-protective film and, for entertainment premises, security guards. The costs start to mount for protective barriers and specialised security.

The temptation for some businesses is to spend security money for the sake of it, rather than taking what Mr Price calls a more integrated approach to risk.

“A lot of companies are spending money to make them feel better rather than adopting a strategy to protect themselves. There needs to be a more strategic management of risk through the business continuity management process  “It's not just terrorism. In fact, the vast majority of businesses are more likely to be seriously affected by IT, personnel, power and water damage issues.'Besides, the costs may be not as great as they once were.

“Only the largest and most profitable companies could afford to do it, but now there is much more available to people,'said Mr Bird.  “Organisations are more able to negotiate competitive and more sensible back-up arrangements for accommodating their IT systems and services. The industry, the suppliers of services, people who supply alternative accommodation and desks, the front office-type services, they have become more available to people then they were,'he added. 

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