Steps to Ensure Operational Resilience
The worldwide epidemic forced every organization in the globe to prioritize resiliency. Businesses of all sizes and types have had to adjust to remote work, redesigned physical workplaces, and updated logistics and supply networks as a result of the seismic changes brought on by COVID-19. They've also adjusted their operational procedures to deal with the dangers and impacts of the epidemic. The ramifications have been massive, demonstrating in the clearest possible way the direct link between operational efficiency and economic development.
But what are businesses to do now? In this guide, we'll explore what operational resilience is exactly, what it includes, why it’s important, and how companies can achieve it.
What is Operational Resilience?
The capacity of an organization to recognize, avoid, respond to, recover from, and learn from operational disturbances that may affect the execution of critical business and economic operations or core business services is known as operational resilience.
The core elements of operational resilience, such as identifying and comprehending crucial business services and impact tolerance, as well as completing the end-to-end mapping, scenario testing, and frequent self-assessments, are critical stepping stones on the route to resiliency.
Operational resilience can be defined as a set of initiatives that help organizations expand their business continuity and service management programs to better focus on the important stuff, such as the impacts, associated risk appetite, and tolerance levels for product or service delivery disruptions to stakeholders such as employees, customers, citizens, and partners.
These initiatives coordinate risk assessments, risk monitoring, and control implementation for the workforce, processes, facilities, technology, and third parties across a number of risk domains used in the business delivery and value realization process, including security, safety, privacy, operational continuity, and reliability.
What Does Operational Resilience Include?
Operational resilience includes a few key stages:
1. Anticipating Problems Before They Happen
A company must determine which events have the greatest chance of occurring and obstructing the company's capacity to operate.
2. Developing Strategies for Prevention
Once a risk has been identified, an organization may devise a strategy for dealing with it. Resilience can be measured on a scale of one to ten. A simple incident, such as a failure of an IT system, is frequently minimized by redundant hardware and automated processes. The physical destruction of a complete data center, on the other hand, is more difficult to overcome.
3. Reaction and Recovery
If and when an incident occurs, the company should follow the steps laid out in its resilience plans to return the operational functionality as swiftly and efficiently as possible. This includes looping in all necessary departments and executives.
4. Circumstance Adaptation
After an incident has occurred and been handled appropriately, it is critical to review the aspects of the plan that went well and determine whether anything needs to be adjusted in the future.
Why is Operational Resilience Important?
Resilience is ingrained in our lexicon, especially in today's difficult business environment. Resilience may be described as the capacity to bounce back from setbacks in its most basic form. Operational resilience, unlike risk, which has a probabilistic component and produces substantial uncertainty, must be viewed as an inevitability.
Cyber-attacks will succeed, systems will fail, and pandemics will arise. Knowing where your organization's vulnerabilities are and establishing your basic aspects can help your organization recover faster and reduce consumer harm.
How to Achieve Operational Resilience
There are steps that organizations and security officers can take to increase their operational resilience and prepare themselves for any unfortunate circumstances.
1. Examine Your Guidance
The board of directors is ultimately responsible for the approval and monitoring of a company's operational resilience architecture. As a result, it's critical that boards and top management understand exactly what's anticipated under the guidance. Firms must ensure that the guidance has been thoroughly evaluated and that all board members and senior management are aware of its contents from the start.
2. Approve Your Operational Resilience Frameworks
A company must ensure that its existing governance structures and committee structure contain operational resilience duties. An operational resilience framework should be aligned with a company's operational risk and business continuity frameworks, or a single framework including all risk categories might be created.
3. Incorporate Resilience
Operational risk, cyber and information technology, business continuity management, incident management, and communication strategies should all be addressed as part of the implementation of a proper Operational Resilience Framework, which should be a comprehensive, cross-departmental activity.
4. Decide Which Business Services Are Necessary or Important
In order to successfully protect against operational disruption and risk, a company must first determine which services are crucial or important to its operations. To properly define these services, a company should examine whether a disruption event impacting that service will have a meaningful impact on the customer. When determining whether a business service is crucial or significant, a company should evaluate the following questions:
- Is an interruption likely to create significant consumer harm or jeopardize policyholder protection?
- Would it jeopardize the market's integrity?
- Would it have an effect on a company's viability, safety, and soundness?
- Will it have a detrimental influence on the company's overall financial stability?
5. Determine Your Impact Tolerance
An impact tolerance is the highest level of interruption that an essential or significant business service can endure before the disruption becomes a risk to the company or causes consumer harm.
It's critical to distinguish between traditional overall risk appetite and general impact tolerance. The goal of standard risk management and risk appetite practices is to minimize a firm's risk by implementing controls that limit the effect and likelihood of a disruptive event occurring.
Rather than focusing just on constructing defenses to prevent risks from occurring, operational resilience focuses on enhancing a company's ability to cope with risk occurrences when they occur. Impact tolerances allow a company to estimate the greatest amount of disruption a service can sustain, allowing them to prioritize service restoration correctly after a disruption.
6. Map the Processes to Deliver Vital Business Services
A study of the technique and procedures involved in the delivery of vital or significant business services is required to guarantee that they do not exceed their impact tolerances. Identifying the following should be part of mapping out how the service is delivered:
- Key members of staff involved in the delivery of the service
- Facilities and technology necessary
- Any third parties or outsourced service providers involved in the provision of the service
The company can efficiently detect any sites of possible failure, dependencies, or major vulnerabilities by mapping linkages and interdependencies.
