The havoc that last month’s Superstorm Sandy wreaked on New York businesses served as a reminder of the importance of emergency readiness. The Economist reported that small restaurants, retailers, the offices of major companies such as Goldman Sachs, as well as transport and utility suppliers were all affected by the super storm. The storm interrupted the operations and supply chains of a range of businesses and public service providers and revealed shortfalls in business continuity plans. The facilities of New York and Westchester County electricity supplier ConEdison were designed to tolerate tidal surges that were 0.5m less than what the storm provided. Consequently, close to one million customers were without power following the storm, and nearly 80,000 were without power still nine days afterwards. New York hospitals also lost power despite moving back-up generators above ground due to fuel and pumps being inaccessible. Last year’s devastating Tsunami in Japan and severe floods in Thailand highlighted the need for global supply chains as business’ usual means of sourcing goods were disrupted. The Economist pointed out that with networking comes increased risk as once independent activities become bound together, disruptions have flow-on effects. While cloud computing has been embraced recently as a way to store (more) data, the Economist pointed out business’ vulnerability to cyber-attack, which despite precautions taken post-Y2K, is still a significant enough risk to warrant firms considering “having a committee explicitly focussed on understanding IT and network risks and ensuring they are properly managed.”
The New York Times reported that the continuity plans of 23% of large firms do not include their entire supply chain, providing a false sense of comfort for the enterprise which might underestimate the impact of disruption to suppliers further down the chain. It is important for organisations to start by understanding their critical business functions, determining what can cause those functions to fail, gauge how long they can afford to be out for, and then build a contingency and recovery plan to cope.
Geographically, the latitude of super storm Sandy in the northern hemisphere occurred roughly at the equivalent of Melbourne Australia in the south. A cyclonic storm at that latitude (outside the tropics) is unheard of, yet the incident in NY shows the potential of what can happen to a city that is not designed to cope with such an onslaught from mother nature. It begs the question as to whether organisations in the venues, events and sports industries are prepared? Do you understand your critical business functions? What are those functions dependant upon? What would happen if that dependency was temporarily unavailable unexpectedly? How would you know? What is the plan?