After every natural disaster, people are deprived of basic services like water, food and electricity. On the other side of the coin, the utility industry is always on the receiving end of succumbing to any kind of disaster, be it natural or man-made. In this scenario, this sector needs a comprehensive business continuity management strategy to serve people even during a crisis.

The services provided by these public utility companies are fundamental to the economic and social well-being of a society. Therefore, the continuity of public service sectors such as energy distribution is a critical issue that must be considered by senior management and competent authorities.

The Business Continuity Management strategy helps you prepare for the worst. However, that worst may not happen many times. So why do we need a separate policy and committed resources for a prophecy?

Risk Management vs Business Continuity Management

Business continuity is an integral part of risk management. Organizations cannot ignore the possible external effect on operations. Sometimes internal risks can surprise and affect both organizational and operational levels.

BCM is often confused with a disaster recovery plan, which is mostly limited to technology and data protection. However, it has more to do with a top-down approach, where continuity management is required at every stage of various operations in an organization.

A blackout can be subsidized with risk planning and emergency measures. But it is very difficult to measure the extent to which this disruption can trickle down into multiple operations in the organization.

Let’s review some of the potential natural and man-made hazards that can disrupt the operations of utility companies, specifically energy supply companies.

Potential natural and man-made hazards for power distribution companies:
• Cyclones and flash floods: Most of the Middle East, Malaysia, and other coastal countries are prone to tropical cyclones, which cause flash floods. Power distribution companies in these areas may experience infrastructure damage, property loss, and may need to relocate operations while continuing to provide services.
• Power outages: Generator and grid failures are often predictable outages and connected cities can be left in the dark without power and gas supply.
• Fire – Electrical short circuits or any man-made negligence can expose businesses to fire accidents. Many vital records can be burned and even affect your IT
• Physical and cyber attacks: Physical attacks are very rare. However, utility companies are vulnerable to internal conflict and terrorist attack. Here, there is a probability of human and property loss to some extent.
Whereas, cyber attacks are unavoidable due to hackers and anti-administration groups. Although data theft may not directly affect power supply, it can disrupt billing and other operations. This, in turn, can fluctuate cash flow and throw balance sheets off balance.
• Pandemic: Epidemic diseases like Ebola are highly unpredictable. However, rumors and fear can result in unfavorable incidents within the organization.

All of the above incidents can damage the organization’s reputation, property, and data, demotivate staff, and disrupt supply and demand operations.

Right now, any energy company is expected to make
• Timely restoration of work
• Monitor business and operational risk
• Manage technology outages, employee unavailability, facilities down, critical vendors interrupted
• Manage network reliability and a host of interconnected business processes that support this goal
• Holistic approach to business resilience and disaster recovery
• Understand the risk and impact of disruption on business processes

Now, the question is, “are you ready and equipped for any incident?”

If yes, please check if you can meet the above parameters.

If not, then:
• Hold some initial board meetings
• Check the soundness of internal Business Continuity Management
• Consult an external expert for Business Impact Analysis (BIA) and
• Provide the internal BCM team with some test cases or crisis simulation workshops.

Some of the case studies of power distribution companies in the Middle East and other countries have reported the need for automation of Business Continuity Management. Many companies aim to bring all of their BCM processes and records together in a centralized environment to proactively monitor and mitigate business interruption threats at the click of a button through BCM software.

This important initiative towards BCM is also a step towards compliance with regulations issued in accordance with Section 3, Part 1, of the National Disaster and Emergency Crisis Management Authority (NCEMA) Rule 7000:2012. These regulations are formed to regulate the water, wastewater and electricity sectors in the Emirates to develop BCM and BCP in accordance with NCEMA 7000:2012.

Some of the NCEMA 7000:2012 Regulations include:
• Define your own organizational criteria and trigger the execution of a Business Continuity response in accordance with the respective Business Continuity Program in the event of an Outage
• Define a scope of BCM in terms of mission-critical functions and processes
• Establish a BCM Committee to address organizational, functional and operational issues
• Support a business continuity coordinator
• Conduct BIA – determine and document RTO and RPO for all mission critical functions and processes
• Identify threats and assess the impact of the threats, the vulnerability of those impacts, the probability of identified threats and, finally, calculate and evaluate the risks.
• Measure BCM with internal audits, management reviews and measurement against KPIs.
• Provide awareness and training and conduct test cases and exercises.
• Above all, organizations should religiously review and update their BCM on a regular basis.

conclusion

To conclude, utilities are responding well to localized emergencies. However, challenging economic environments and changing scenarios force companies to set aside their long-term concerns. Looking at the changing landscape, it is the right time to review Business Continuity Management and show the urgency of continuity preparedness.