Measuring how well your company will survive a catastrophe will soon be easier, as the British Standards Institute's PAS 56 moves towards becoming a recognised standard. In just over a year, and following consultation, the standard will acquire the status of a code of practice, similar to the Highway Code or the Health & Safety Code.
As we reported in April, PAS 56 is currently a specification for a code that outlines best business continuity practices for industry. The BSI committee of experts that drafted the original PAS 56 specification will meet before the end of 2004, will spend six to nine months developing a draft code and throw it open for six months of consultation. After that, the code will be published, according to the BSI's head of risk market development Nicki Dennis.
At a business continuity conference hosted yesterday by disaster recovery company Sungard, Dennis said that initial feedback on PAS 56 was positive but criticism centred on the fact that it posts too high a standard. Dennis said: "It goes beyond best practice, it's aspirational, it goes off the scale." She commented that this was precisely the point: it's a benchmark, and "companies can place themselves at 60 per cent or 80 per cent of PAS compliance as they wish".
According to Dennis, the standard is growing in importance. Insurers are starting to demand that companies have business measures in place before they will accept the risk of insuring the organisation. For instance, said Dennis, in flammable materials industries, "insurers insist that the company has a process in place to ensure that the company has the best chance of surviving. They only want to fund you in the event of a disaster for a short time - say, six months rather than three years - so you must have good plan."
Pressure for the adoption of a code of practice is working its way down the supply chain too, said Dennis. "If you supply Tesco, you have to have a business continuity plan." She added that it's also good for your shareholders, demonstrating this at the conference with a graph from researchers Knight & Pretty showing the impact of catastrophes on share prices. Those with "a positive approach to business continuity" commanded significantly higher prices over time.
In some industries, such as financial services and utilities, pressure for the adoption of business continuity plans are part of the package: both regulations - such as Basel II for financial organisations - and the nature of doing business demand continuity.
Two industries, financial services and IT, already lead the way in terms of rate of business continuity plan adoption, according to Dennis, the former for reasons stated, and the latter because "they have to think data recovery. Companies such as Sungard are adopting very good business practices," she said.
Dennis added that the adoption of PAS 56 standards in an organisation "is not particularly expensive but it does take time. However, the battle for hearts and minds is a worthwhile investment."