HLS 6080 Research Paper

HLS 6080 Research Paper Why SMEs often ignore the idea of having continuity plans Name Affiliation/Institution Course Why SMEs often ignore the idea of having continuity plans Introduction Having a COOP is a good business practice. A COOP makes it possible for organizations to continue with their essential functions despite a range of hazards and emergencies (Wooford, 2015). Regardless the nature of the risk, that is, whether natural, technological or human-made, a continuity of operations plan will allow a business to keep functioning. It is essential to have one’s mind in the right place during a crisis but only a few people manage to do that, and this necessitates the presence of a continuity plan. The management of a business cannot risk getting carried away with the effects of a crisis because it is at such times that their strategic plans and thoughts are needed. Large companies embraced the idea of COOPs mainly because they have more to lose than small businesses. To them, the idea of going out of business is threatening to not only their profit margins but also their reputation and thus currently, almost all large organizations have COOPs. However, the same cannot be said for SMEs which have not embraced the idea of having COOPs. Research shows that only a few SMEs have continuity of operations plans and even the ones that do never take them seriously despite their importance to their survival. This article will address the lackluster adoption of COOPs by SMEs, provide drivers that are pushing SMEs to develop their continuity plans, and also provide a guide that explains how SMEs can build COOPs. SMEs and COOPs SMEs currently employ a significant portion of the global population and thus their importance to the world economy should not be ignored. According to Bassinger News (2015), in the UK alone, SMEs had employed a total of 15.2 million people, and they make up more than 50% of the country’s registered companies. Reports from the European Commission SME performance review estimated that SMEs’ Gross Value Added in the UK is 49.8% or more than 450 billion pounds. The above is quite huge, and their withdrawal could indeed impede UKs growth and development. However, the SME sector is often vulnerable, and despite efforts by the government and other pundits, SMEs have not fully embraced the idea of developing their continuity of operations plans (Heng and Wong, 2015). Unlike corporate businesses, SMEs are likely to file for bankruptcy or run out of business after a crisis. Albeit the obvious fact that COOPs help businesses to plan for anomalies in the business world, SMEs are still adamant on their neglect of continuity plans. However according to Vargo and Seville, it is becoming increasingly difficult for SMEs to ignore the importance of crisis management. The above is because of several reasons that will be addressed later, and this means that soon all businesses will be legally required to have COOPs to help avoid significant economic downfalls that some countries often encounter whenever the global markets are torched strained. The implication of SMEs decision not to adopt continuity plans are indeed dire and not just to the owners but the entire country’s economy. The fact that a significant portion of the country is dependent on SMEs means that in the event of a crisis, a country’s economy will suffer and many people will be rendered jobless. The implication here is that the government will be forced to intervene and not just to bail out the companies but also to help support the strained families. Ultimately, a country ends up losing more than it can handle and is left with a hefty burden that will at a minimum take it several years to control. Assumptions SME managers/partners make and that drive their obvious lack of concern for business continuity plans * Lack of resources Managers of SMEs often assume that their businesses cannot manage to afford the time nor the resources (money) to have a continuity of plan developed for them (Wang, Walker, and Redmond, 2007). This assumption is indeed flawed because the only resource that is needed to develop a COOP is the brains of the individuals within the business. The management of SMEs has in the past and present pinned their lack of action on this reason despite the fact that it is almost never directly related to the issue at hand. Such managers have developed the habit of always seeking a way out of requirements that seem to consume their time and a small amount of the returns. The results have indeed been catastrophic with SMEs exposing a significant vulnerability when it comes to their survival. Lack of resources has never been a credible answer, particularly when the issue at hand is directly proportional to the survival of one’s company. * Lack of accurate impact estimation Managers in SMEs have often been caught unawares or unprepared mainly because of ignorance and belittling of business interruptions. Accuracy when estimating the cost or impact of an interruption is essential, but in most occasions, managers of SMEs often ignore this fact (Wang, Walker, and Redmond, 2007). The assumption that a business will either survive or be able to manage the impact of a disaster often comes to haunt a business. Survival of the interruption periods is solely dependent on the preparedness of a team. However, when managers ignore the idea of prior preparation and depend on their belief that the business will withstand the financial and customer backlash that will ensue then the chances of survival diminish. A business should be run on factual information and hence the importance of having a team that offers accurate data to the managers to help paint a clear picture of the impact of interruption. Assumptions such as one related to loss should never be entertained. * Lack of scenario or probability planning In corporatebusinesses, every single piece of information is taken seriously particularly if it could hurt the profit margins of the firm in the long-run. Problems or potential problems are never taken for granted and teams are often set aside to assess their extent of injury in the short and long-run. Conversely, in SMEs, managers often label problems, and those that seem out of their reach are ignored regardless of their potential harm to the business. SMEs have in the recent past developed the attitude of classifying problems as either big or small and handling them as they deem fit. However, unlike corporate businesses, few SMEs take their time to assess the probability of their classification being wrong. The implication of the above is that if anything out of the ordinary happens, many SMEs often find themselves clinging on thin threads that eventually let go. It is, therefore, essential that businesses develop scenario or probability planning for the sake of their survival. * Lack of prioritization Prioritization is indeed critical to the survival of a business. Corporate companies often plan for things that are yet to be encountered and hence their resilience during and after a crisis. However, the fact that SMEs lack probability planning means that they also do not prioritize and thus do not plan for future disasters. The above means that most are caught unawares if a crisis happens. Prioritization helps to ensure that immediate problems that a company faces are dealt with first while a plan is developed to cater for the imminent ones that are yet to happen. The lack of prioritization is indeed disastrous for SMEs and managers should indeed be called to act and adopt plans that cater for the current as well as future problems. Why SMEs should adopt and implement continuity plans * Increase in cyber security incidents Currently, there has been an increase in cyber security threats all over the world and despite a joint effort to eliminate this menace; it remains a huge threat, not economies all over the world (Humphreys, 2011). Corporate businesses have had to deal with numerous cases of cyber security attacks whose damages could reach billions of dollars. The above evidently necessitates the adoption and implementation of continuity plans. SMEs have also been under attack lately, and despite their adamant stand of not embracing continuity plans, it is increasingly becoming difficult to continue ignoring a threat such as cyber security attacks (Horváth and CISM, 2013). News about cyber security incidents often spread fast and tends to attract massive media coverage. The implication of the above is that a company will always be associated with that one event and unlike big corporate businesses which often manage to climb back to their esteemed states, SMEs often crumble. It is thus essential that managers consider adopting and implementing continuity plans to help the business curtail and manage the losses. * Changes in the corporate governance practices Corporate governance practices primarily dictate the behavior of businesses and ensure that companies adhere to the set rules and regulations (ACCA, 2015). Currently, information security in enterprises has continued to attract a lot of interest from the managers and overseers of corporate governance. Being a critical factor in information security, continuity plans are thus expected to be a mandatory requirement soon. SMEs have always found loopholes within the system and have thus been able to evade certain rules. However, with continuity of operation on the verge of being a law, it is only a matter of time before all SMEs fall in line. * ERM and information security risk management practices ERMs or Enterprise Risk Management practices mainly help organizations to develop plans that will help the organization to identify potential hazards and crises that will directly impact on the business. Additionally, they also contribute to managing the risks as well as providing measurement strategies that will assista company in assessing the severity of some risks and dangers. Corporate companies often use ERMs and information security management practices, but with each passing crisis or economic disaster, it becomes increasingly clear that even SMEs need to shield themselves from future risks. Currently, intellectual property bears more weight for companies than tangible assets. Information has become increasingly expensive to secure because of its importance to the corporate. Some SMEs have indeed gone out of business as a result of information security issues or theft, and while others have soldiered on, it is indeed becoming increasingly important to have a continuity of operations plan. Despite the challenges, this plan often allows a business to focus on critical functions that ensure its survival while also working to deal with the problem. * Regulatory changes For years, COOP planning had been the responsibility of ...