Retailers are spectacularly ill-equipped to cope with major disruption to their businesses, according to a Chartered Management Institute report.
While some retailers such as Sainsbury have been proactive on the risk management front, many were sitting ducks if things went wrong, claimed the CMI.
Research by the CMI, the Continuity Forum and Veritas Software, revealed that just 37% of retail organisations had a business continuity plan and just 11% used the British Standards Institute’s guidance on business continuity planning to help them plan for disaster.
Only 15% of companies surveyed said they insisted that businesses to whom they had outsourced key activities such as warehousing and IT shold have a continuity plan.
While compliance with the BSI standard was not obligatory, pressure was mounting on companies to develop credible risk management plans in order to reduce insurance premiums, said a CMI spokesman. “Some companies will no longer insure you if you cannot demonstrate that you have a business continuity plan,” he said.
Retailers such as Sainsbury were already asking suppliers what contingency plans they had, and may in future make this a condition of doing business with them, he said.
While many retailers and food manufacturers had clear procedures in place for product recalls or IT failures, they were less prepared to deal with the departure of key executives or problems with their own trading partners, he said.
“In any companies, people do not share information.
“When key people leave, they are in a real mess.”
According to the research, the biggest issues raised by companies included loss of IT, loss of telecoms, fire, loss of skills, and damage to the corporate brand.
While some retailers such as Sainsbury have been proactive on the risk management front, many were sitting ducks if things went wrong, claimed the CMI.
Research by the CMI, the Continuity Forum and Veritas Software, revealed that just 37% of retail organisations had a business continuity plan and just 11% used the British Standards Institute’s guidance on business continuity planning to help them plan for disaster.
Only 15% of companies surveyed said they insisted that businesses to whom they had outsourced key activities such as warehousing and IT shold have a continuity plan.
While compliance with the BSI standard was not obligatory, pressure was mounting on companies to develop credible risk management plans in order to reduce insurance premiums, said a CMI spokesman. “Some companies will no longer insure you if you cannot demonstrate that you have a business continuity plan,” he said.
Retailers such as Sainsbury were already asking suppliers what contingency plans they had, and may in future make this a condition of doing business with them, he said.
While many retailers and food manufacturers had clear procedures in place for product recalls or IT failures, they were less prepared to deal with the departure of key executives or problems with their own trading partners, he said.
“In any companies, people do not share information.
“When key people leave, they are in a real mess.”
According to the research, the biggest issues raised by companies included loss of IT, loss of telecoms, fire, loss of skills, and damage to the corporate brand.
No comments yet