CVS Blog - Part 4

Systemising Your Business – Part 2

When you are systemising your business, and producing procedure manuals have you ever used Process Maps? Have you ever used them to systemise a client’s business?

A survey carried out some time ago produced the estimate that people carrying out administrative functions or providing services spend about 40 to 50 percent of their time dealing with waste; correcting things that are wrong, chasing down misfiled or misplaced things, querying incomplete instructions, re-inventing the wheel, and so on. These go on in even the best organised businesses.

Just imagine that you could reduce these wasteful habits in your own business. How much more productive would you be? Compiling process maps can provide an analysis of a process and highlight areas of inefficiency and waste; leading to methods to deliver improvements.

Process mapping, or flow charting, is an extremely powerful technique. It depicts, visually, how each step in a process leads to the final product or service output. It is one of the most effective improvement techniques you can use.

Terence Kierans CAVB (Certified Australian Virtual Business)
Principal, Cyberspace Virtual Services
PO Box 93 Quinns Rocks, Western Australia 6030
http://www.virtualservices.com.au – Experience the Difference
http://vacertified.com/client-info/ – First in the World to be VA Certified (and you can benefit)
http://www.avbn.com.au – Australian Virtual Business Network—You Deserve the Best
2007 Thomas Leonard International VA of Distinction Award Nominee
Contented Member of ‘A Clayton’s Secretary’
Use our skills to help you succeed
Tel: 61 8 9304 6983 Fax: 61 8 6230 5156 Mobile: 61 414 25 1091 UK Residents: 07092391723

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Why a Business Impact Analysis (BIA)?

Briefly it is to enable you to determine the impacts resulting from possible disasters and interruptions that could affect your business; the risks you have assessed previously.

It would also enable you to ascertain critical processes, their priority in the recovery phase, and anything dependent upon those processes so can set a goal for overall recovery

You cannot develop a strategy for your Business Continuity Plan if you cannot determine the extent of the impact on your business of risks occurring.

The purpose of the BIA is to:

Determine those functions of your business that are critical to its operation together with those particular processes / applications each function accomplishes.
Put a figure on the potential loss to you and your business for each of those processes if they cannot be conducted for a given period of time.
Research the probability of losing each function and assign a risk factor— low (L), medium (M), high (H) or severe (S).
Any process rated H or S must be further evaluated in order to determine alternative strategies.
Finally, you need to decide upon what you consider to be an upper limit of for any outage that could be caused by the occurrence of an H or S risk function so as to reduce the effects to M or L

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Risk Management—the Five Ws

You can’t prepare for a possible disaster if you don’t know how much impact on your business the different situations could have. So, before planning for recovery we need to know what we would be recovering from – the risks that are out there.

In order to manage these risks we must first decide:

What are those things that can happen?
What external issues can impinge on your business?
What is the likelihood of these risks happening?
What is the cost to your business when it happens?
What are the costs involved in preventing them happening?

After determining what can happen — items 1 and 2, then items 3, 4 and 5 are used to compile a table (Table 1) to guide you in managing the outcome of items 1 and 2 occurring.

What are those things that can happen?
Communications outage; fire; flood; hard drive crash, power outage—to name but a few.
However, the risks to which a large finance organisation may be exposed differ widely from those relating to a small business.

What external issues can impinge on your business?
These could include government legislation; legal problems, or strike action.

What is the likelihood of these risks happening?
Here you need to assess a probability for each risk; best expressed as a percentage per year.
As an example, the possibility of a power failure is more likely in a bushfire or storm than at other times. So the probability of a power outage can also depend on your physical location as well as the average weather pattern.

What is the cost to your business when it happens?
Several calculations are involved here, including the probable duration of the crisis as well as the problem itself.
If you rely on external communications to conduct your business the cost to you if this event took place would be high. Not only in lost revenue but also the possibility of losing clients.

What are the costs involved in preventing them happening?
Prevention, as a business cost, is not necessarily better than curing it when it happens. Again, other factors such as the probability of happening also need to be taken into account.

Risk Analysis
To focus on each risk, and supply an overall picture, the use of the following table is suggested:

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Analyze Your Business

80% of businesses affected by a major incident close within 18 months.

90% of businesses that lose data from a disaster are forced to shut within two years.

Formal analysis of your business is the essential foundation for Business Continuity Management (BCM). This analysis will provide you with an understanding of your business and what is critical for its continued operation.

Ask yourself these basic questions:

What are the principle business objectives of your business?
What are the deliverables (products / services) of these objectives?
When are the objectives to be accomplished?
Who is necessary to the achievement of these objectives?
How will these objectives be achieved?

You may, or may not, have a Business Plan and / or Mission Statement. If you have, then they should provide the answers to these questions. If you haven’t then now is the time to produce one.

There are critical activities and their dependencies that enable the achievement of your business purpose. These are the focal point of your Business Continuity Plan (BCP).

The components of these critical activities include:

People
Facilities
Persons with a financial interest in your business
Your suppliers
Your clients / customers
Functions
Processes
Materials
Telecommunications
Technology
Data

Bear in mind that there are external organizations too that can have an effect on your critical activities. They can include:

Government bodies (regulatory and non-regulatory).
Your competition (not necessarily in the same line of business as you).
Trade Unions.
Professional organizations.

There are two distinct and complementary processes to a further understanding of your business and the identification of its critical activities and dependencies. They are the Business Impact Analysis (BIA) and the Risk Assessment. These will be examined in future blogs.

The author acknowledges the Business Continuity Institute as a source for much of this information.

Terence Kierans CAVB (Certified Australian Virtual Business)
Principal, Cyberspace Virtual Services, Western Australia
www.virtualservices.com.au – Experience the Difference
http://vacertified.com/client-info/ – First in the World to be VA Certified (and you can benefit)
www.avbn.com.au – Australian Virtual Business Network—You Deserve the Best
2007 Thomas Leonard International VA of Distinction Award Nominee
Contented Member of ‘A Clayton’s Secretary’
Use our skills to help you succeed
Tel: 61 8 9304 6983 Fax: 618 6230 5156 Mobile: 61 414 25 1091 UK Residents: 07092391723

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Facing Fears in Business

The 5 Archetypes of Facing Fears in Business

Are you procrastinating in business? Do you keep coming up against “brick walls” that stop you growing your business? Maybe you are flat out, with your wheels spinning and not making the money you should be. I think we all find ourselves in these situations at times. Very often, the reason this happens is because there is a fear we are holding onto that we are not even aware of. As entrepreneurs, if we don’t deal with this fear and move on, our businesses will never reach the stage they should.

To read the entire article and find the rest of the quote “Before you can have a mind-shift you first need to ….” Please also make sure you leave your comments below the article. I’ll read and respond to every one personally!

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and join the conversation over here.

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Systemising Your Business – Part 2

Why a Business Impact Analysis (BIA)?

Risk Management—the Five Ws

Analyze Your Business

Facing Fears in Business

The 5 Archetypes of Facing Fears in Business

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