Business Resiliency in Unpredictable Business Climate Converting One - - PowerPoint PPT Presentation

Business Resiliency in Unpredictable Business Climate – Converting One Dimensional BCM Practice to Multiple Dimensions

Tony Yen

Deputy Head of Corporate Risk and Broking, Willis (Taiwan) Limited

Abstract

• Global risk dynamics from natural catastrophe to man made disaster has made

business challenge even more volatile these days.

• From the history of BCP, how can hi-tech companies & industry leaders think off better

continuity objectives in achieving greater, smarter enterprise sustainability.

• Just early this year, 0206 Meinong earthquake had strike southern Taiwan hi-tech

manufacturing cluster with hard lessons learned.

• How do we know if next disaster come with same magnitude hit us again, business

leaders with different discipline from hi-tech will do the recovery differently

• From our Semicon experience, the BCP practices always be an unique single

dimension movement. Can we change to other dimensions from planning angle to testing angle to justify our BCP readiness

• Also, are we really giving BCP activities a measurable ROI index as another new

dimension to measure its readiness and effectiveness

• When we are measuring BCP as individual company KPI, what is the common

recovery objectives the industrial cluster should be clearly defined before company start up their BCP/BCMS exercise

Global risk landscape in changing days

Global Risk Landscape

• According to WEF

published Global Risk Report 2016 11 Edition

• Climate change

mitigation & adaptation failure has been identified as one of the top 10 global risk concerns with increasing likelihood and impact by global leaders.

Global Risk Landscape – Macro Trend in terms of Likelihood

Global Risk Interconnection Map 2016

Global Risk Concerns by Region

Technology sector 2016 risk score in 5 megatrends

Regulatory uncertainty arising from the explosion of the data economy, active antitrust law and unpredictable political cycles affects TMT

• rganizations.

Business strategies, commercial arrangements and day-to-day

• perational

decisions are all impacted.

Regulation &Legal Risk

Lengthening supply chains and precipitating greater

• perational

complexity turn TMT companies vulnerable. Exposure to global and regional events, both natural and sociopolitical, threaten infrastructure, human resources and

• perational

security.

Operational Complexity & Vulnerability

A growing shortage of skills and talent across the TMT sector is making attraction and retention of key people a critical success factor. Simultaneously, the pressures created by employment regulation and demographic change are reshaping talent management.

Global Talent & Skills Race

The pressure to stay relevant in the TMT sector demands a continuous

• utput of

innovation and diversification. The threat from nimble market entrants and an evolving demand profile is driving firms to innovate and reassess their structures and business models.

Business Model & Strategy Pressures

Irresistible technological progress and escalating consumer expectations are forcing heavy IT investment in. This expenditure is felt no more acutely than in the management and protection of data, which is simultaneously becoming TMT firms’ greatest asset and vulnerability.

Digitalization & Technological Advances

Megatrends are defined as global, macro forces that impact business and the marketplaces that they operate in.

Willis Towers Watson Technology, Media & Telecom Risk Index – 2016 Megatrend

The 50 Risks in 5 Megatrends

The 50 Risks in 5 Megatrends

The 50 Risks in 5 Megatrends

The History of Continuity & Sustainability Thinking

A Brief History – Initiation of Business Continuity

BCMS – ISO 22301

544 – 496 BC 1940s WW II 1950 – 1960 Cold War 1970s Royal Dutch Shell

Strategic Planning of Resilience

• The initiation of Resilience Concept – Mulberry Harbor A & B

A Mulberry harbor was a portable temporary harbor developed by the British in WW II to facilitate rapid

• ffloading of

cargo onto the beaches during the Allied invasion of Normandy.

The BCM Development Roadmap in Taiwan Semiconductor Manufacturing Community

• Insurance Companies Concerning Business Interruption Exposure in

Semiconductor Fab Since 1990s

• Post Experiences due to Major Semiconductor Fire Losses in 1990s
• Client Awareness in Supply Chain Resiliency Since 2000s
• Catastrophic Events Awake Semiconductor Companies After Major

Earthquakes in 2000s

• Shareholder/Senior Executive Awareness Since 2006
• CSR Promotion & Sustainability Awareness in Late 2008
• Best Practice & International Standard Releasing in 2010~

Beyond One Dimensional BCM Practice

The Concept of Dimensions in BCMS

Topology:

• a magnitude that,

independently or in conjunction with other such magnitudes, serves to define the location of an element within a given set, as

• f a point on a line, an
• bject in a space, or

an event in space- time

Plan Who

When

Whom What

What

How

The Difference of Dimensions in BCMS

Dimensions in BCMS:

• A. Risk Cultural,
• B. Continuity Objective,
• C. Organizational

Competence,

• D. BC Plan Maturity &
• E. Response Simulation &

Validation.

Risk Culture +Readiness / +Maturity

• Readiness / -Maturity

• A. Risk Culture – What Characterises a Good Risk

Culture?

• According to a recent report from the Institute of International Finance

(IIF), a positive risk culture includes:

– Committed leadership – Horizontal information sharing – Vertical escalation of threats or fears – Continuous and constructive challenging of the organization’s actions and preconceptions – Active learning from mistakes – Incentives that reward thinking about the whole organization – An effective governance structure

• Access to authority
• A Chief Risk Officer (CRO) with extensive influence
• Communication of risk tolerance to the organization and external parties

– Evidence of management objectives linked to risk management

• bjectives

Organisational Culture The values and norms of behaviour within the organisation generally support effective management of risk Risk, Appetite, Strategy & Policies The company’s attitude towards risk is clear and appropriate Leadership Commitment Leadership throughout the organisation have a focus on risk appropriate decision-making communication and behaviour Roles and Organisational Structure Roles, responsibilities and rewards are determined in keeping with effective risk management Process & Controls Risk controls and process are appropriate, clear, timely and effective Reporting & Management Information There is effective reporting and documentation of risk activity Technology & Infrastructure IT systems are designed in a way that supports effective risk management Tools & Methodology The approaches to manage risk are clearly understood and appropriate to the need

• A. Risk Culture – Critical Components

• Cost versus RTO & Impact

Time to Recover Cost Impact

Busin Business Imp mpact Curv Curve Co Cost t of

• f Rec

ecovery Curv Curve

Acceptable downtime

• Max. cost of

control

One week Worst Case Impact Extreme High Cost

• B. Continuity Objectives – Your Return-On-

Investment

• C. Organizational Competence

Crisis Mode Normal Mode

Competence

Controlling Capability Loss of Confidence 100% 0% 100% 0% Size/Scale of Incident Insignificant Catastrophic

Based on personal past experience Based on historic losses & lesson learned Based on BCM Project Expectation

 Scenario Independent  Misinterpret

Probability

 Strong Commitment  Measurable

Performance

• D. Plan Maturity – 100 Times EQ Results 100 Scenarios

• E. Response Simulation & Validation

Reading

Learning Impact Improvement

Lectures Conferences Group Exercises Case Studies Simulation Real Experience Changing Mind-set

State-of-the- art Risk Management Establishing Practice & Method for Risk Based Operational Excellence Building & Implementing Property Conservation Practice & Awareness

Conclusion

Risk Culture +Readiness / +Maturity

• Readiness / -Maturity
• Business resilience is

an art to strengthen corporate readiness facing unpredictable challenges.

• Strategic thinking with
• ut of box innovation is

crucial element helping semiconductor industry leaders shaping business position more sustainable.

• The strong will and

ambition to keep business sustain is the corner stone for immediate actions.

Thank you