Integrating business
continuity and risk
management
While historically treated as separate 
disciplines, the effective alignment of BCM 
and RM can prove extremely beneficial, 
believes Richard Waterer
A
global financial meltdown,
continued terrorism attacks and
pandemic health scares have tested
business resilience to the limit in the last 12
months. While executives are demanding
that exposure to risk is reduced and
resilience boosted, at the same time they
are insisting that cost is kept to a minimum Outside of the financial services sector, • A combined programme not only creates
and return-on-investment maximised. Both the quantification of risk impact can less demand on business managers’ time,
seemingly conflicting objectives can be also be subjective and imprecise, and but is more easily accepted across the
achieved if companies are willing to look exposures are evaluated according to broad board. It simply makes better commercial
at integrating the vital disciplines of risk perceived revenue impacts. Furthermore, sense.
management and business continuity. risks identified at a divisional level in an
The consequences of the last 12 months organisation are often aggregated up, Clients driving the changes
have been huge: suppliers and customers resulting in the specific nature and root The shift to integrating BCM and risk
have gone out of business; lines of credit cause of many risks being lost completely, management is being led by a range of
are increasingly hard to come by; and and necessary local controls being missing. forces. One example is global supply
businesses are beset by concerns about Conversely, BCM programmes often lack chains and outsourcing. It is now more
their cash-flow and resources. Such a impact because the nature of risks varies common than ever for businesses to
conflagration of forces is causing many greatly across a value chain – and business extend their supply lines and increase their
businesses to radically change how they continuity often fails to adapt to these interdependency. Corporate governance
respond to crises and limit their future varying risks. Sometimes the necessary requirements are also tightening for both
exposure to future shocks and disruption, localised process that BCM concerns itself BCM and risk management. Two recent
whilst not creating extra financial burdens. with can take the eye away from future examples in the UK would be the changes
Business continuity management and potential threats and risks. that the UK’s Financial Services Authority
risk management are traditionally treated as Risk and BCM programmes can often be is bringing about as a consequence of the
separate entities. However, the advantages expensive, and demand time and resources global credit crunch, as well as legislative
of aligning the two disciplines are now from the business. In some extreme cases changes brought about by the Solicitors’
being given serious attention by many they can actually detract from each other. Code of Practice.
farseeing corporates. This makes a potent case for change. But Existing BCM and risk management
how realistic is it to combine the power of measures have also been shown, in the
When 2+2=5 two in the real world? Although BCM and face of the credit crunch and systemic
The historic separation of BCM and RM can RM have their own distinctive identities, the risk concerns, to be incomplete and there
have a number of adverse consequences benefits of splicing and sharing both bring a is often a challenge in measuring the
in the long term. Risk management wealth of real world benefits: return on investment from enterprise risk
programmes can fall short because high • The quality of a company’s analysis will management (ERM) and BCM programmes.
impact and low probability issues are often be far better – more complete and better
filtered out when they are being evaluated balanced. An intelligent approach
at a corporate level by the risk committee. • A more comprehensive, balanced blend Bringing BCM and risk management
The feeling that “it is just too unlikely to of controls can now be determined, together needs careful thought. Some
happen to us” can mean that no further leading to much greater efficiency of risk companies may find, for operational
thought is given to managing the exposure investment and more effectiveness of reasons, that it is difficult to integrate them
in the event that it should materialise. corporate controls. completely, especially if one programme
3  Continuity  November/December 2009
Cont Nov/Dec 09_insides.indd 36 27/11/09 14:14:32
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