In today's marketplace, you can't afford to do without your communications technology. Preparing for a potential breakdown can save a company from irretrievable damage says Dave Lazenby.
The fast-moving and flexible nature of business and customer service means that telecommunications and data networks have become crucial to successful business operation. Without an effective, reliable communications system, your company is isolated from its lifeblood of customers and suppliers.
Unforeseen circumstances can damage communications technology. These include terrorist attacks, tampering by unqualified people, fire and flood. Disaster doesn't strike every day. But it only needs to happen once to put a company out of business if it is handled badly.
Recent research from the Business Continuity Institute shows that 20% of companies will suffer a major disruption through fire, flood or storm, power failures, terrorism or hardware/software problems. 80% of those that don't have a business continuity plan fail within 13 months.
Results of a recent survey by research analysts, Performance Concepts, showed that 34% of organisations consider a breakdown in their telecommunications network "a disaster" after just half a day.
Everyone is vulnerable
Certain businesses, such as those within the catalogue, internet or financial sectors, are especially reliant on telephone interaction. They would feel the impact of a damaged communications system very quickly and intensely. For virtual businesses, protecting against communications failure is perhaps an even bigger issue because they are still in the process of building up consumer trust. It is essential that they present an image of reliability, both to their current and potential customers, and to investors.
The internet has delivered better choice and lower prices across the globe, and competition in the provision of goods and services is now intense. In almost every marketplace, customer relationship management (CRM) has become one of the few remaining differentiating factors. Call centres and web-enabled contact centres, are set up to deliver a very high level of customer care, often 24 hours a day.
Consumers have come to expect this level of service. If an organisation is suddenly unable to deliver it, they are likely to take their business elsewhere. Call centre managers can calculate the potential cost of "downtime" per agent in terms of the potential revenue generated by missed sales enquiries, but the real cost of lost communications to a business is likely to be much greater. The cost of recruiting new customers is notoriously high; no company can afford to lose loyal customers. In the event of a communications system breakdown, you also need to take into account the long-term risks. Your brand image could be damaged irreparably if you do not rectify the communications problems within a very short space of time. This can have a negative effect on share value, which makes it very difficult for a company to "bounce back".
Following a disaster, the company that recovers in the shortest possible time has mitigated its losses to optimum level. Interestingly, despite the finding that a high proportion of businesses without continuity plans are doomed to failure should their system collapse, the Business Continuity Institute found that those who successfully restore their businesses actuality see the value of their company rise.
Plan communications continuity
The Turnbull guidelines require all publicly listed companies to have procedures in place for managing "operational risk" by December 2000. This includes planning for business continuity should their communications technology fail. FTSE listed organisations are efore obliged to protect themselves against in their communications systems. Other rould also do well to adhere to Turnbulll's
businesses effectively prepare themselves for the possibility of a communications system breakdown and ensure that they are well placed to recover from the disaster quickly and cost-effectively? Approaches differ, often depending on the size of the organisation concerned. For example, research has shown that some companies, particularly small to medium sized enterprises (SMEs), are often reluctant to invest in business continuity, but are willing to transfer the risk to an insurance contract. However, simply insuring a communications switch may not be resolve all the issues thrown up by a telephone system failure.
In a communications disaster, replacing the system as quickly as possible is imperative. Unfortunately, one of the main drawbacks to the traditional insurance policy is that it can take a considerable amount of time (up to six months) to settle the claim, by which time an organisation's customer base and brand image may be damaged beyond repair.
A better option is to develop a business continuity plan which allows the organisation to respond to the problem, and thus the needs of their customers, in this time-critical situation. A company may be reluctant to invest in a comprehensive disaster recovery plan, preferring to plough money back into the business in order to grow. However, without a continuity plan, the entire business is at risk should the telephone system break down.
Dave Lazenby is marketing rnanager,BT CommSure, www.bt.com/commsure .
BT CommSure recently launched a new business recovery service, Rapid Response, which can be tailored to protect between 25 and 2,000 extensions in a general office environment and between 20 and 500 call centre agents.
Under the Rapid Response agreement, offered in conjunction with Cornhill Insurance, if an organisation suffers a disaster that results in loss of telecommunications, a dedicated disaster recovery team will be on-site within 12 hours, using temporary equipment to restore communications as soon as possible. This enables the organisation to continue serving their customers and communicating with suppliers and business partners while the insurance claim is being settled, or while a permanent solution is installed. There is an alternative option - the permanent replacement switch. Should equipment be destroyed, a temporary CommSure switch will be fitted, followed by a permanent replacement from BT's Meridian range.