Business continuity management in the utility sector - rising

Every time a natural disaster occurs, people are deprived of basic facilities such as water, food and electricity. On the other hand, the utility industry is always accepting any type of disaster, whether man-made or natural. In this case, the department needs a comprehensive business continuity management strategy that can serve people even during a crisis.

The services provided by these utility companies are critical to the economic and social well-being of society. Therefore, the continuity of utilities such as power distribution is a key issue for senior management and relevant authorities to consider.

Business continuity management strategies can help you prepare for the worst. However, the worst case may not happen many times. So why do we need a separate policy and committed budget resources?

Risk Management and Business Continuity Management

Business continuity is an integral part of risk management. The organization cannot ignore the external influences that may be made to the operation. Sometimes internal risks can have surprises and impacts at the organizational and operational levels.

Many times, BCM is mistaken for a disaster recovery plan, which is primarily defined as technology and data protection. However, more is a top-down approach that requires continuity management at every stage of the various operations in the organization.

Power outages can be subsidized through risk planning and emergency measures. But it is difficult to measure the extent to which such disruptions may penetrate into multiple operations of the organization.

Let us examine some of the possible natural and man-made hazards that may disrupt the operations of utility companies, especially power companies.

Natural and man-made hazards that may exist in distribution companies:
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  • Hurricanes and flash floods - Most of the Middle East, Malaysia and other coastal countries precede tropical cyclones, causing flash floods. Distribution companies from these regions may suffer from infrastructure damage, property damage, and may need to relocate their operations while continuing to provide services
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  • Power outages - Generator and grid failures are usually predictable blackouts, and connected cities may dim without power and gas supplies
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  • Fire - Power shorts or any human negligence may expose the company to a fire. Many important records may be burned or even affect their IT
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  • Physical and cyber attacks - Physical attacks are very rare. However, utilities are vulnerable to internal conflicts and terrorist riots. Here, there is a possibility of loss of people and property to some extent.
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  However, due to hackers and anti-administrative groups, cyber attacks are inevitable. Although data theft may not directly affect the power supply, billing and other operations may be interrupted. In turn, this may cause cash flow to fluctuate and balance the balance sheet
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  • Pandemic - Epidemics like Evela are hard to predict. However, rumors and fears can lead to unfavorable accidents within the organization.

All of the above incidents may damage the organization's reputation, property and data, causing employees to lose motivation and disrupt supply and demand operations.

At this moment, any power company should perform well.
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  • Recover work in time
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  • Monitor business and operational risks
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  • Processing technology is interrupted, employees are not available, equipment is unavailable, and critical suppliers are interrupted
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  • Manage grid reliability and a large number of interconnected business processes that support this goal
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  • The overall approach to business resilience and disaster recovery
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  • Understand the risks and impacts of disruptions on business processes

Now the question is, "Are you ready and ready to deal with any incident?"

If yes, check if you are able to meet the above parameters.

If not, then:
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  • Hold some preliminary grading board meetings
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  • Check the strength of internal business continuity management
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  • Consult external experts on Business Impact Analysis [BIA] and
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  • Provide some test cases or simulation crisis workshops for internal BCM teams

Some case studies from distribution companies in the Middle East and other countries report the need for business continuity management automation. The goal of many companies is to integrate all BCM processes and records into a centralized environment that can actively monitor and mitigate business disruption threats with the click of a button through BCM software.

This major initiative for BCM is also a step towards complying with the regulations issued by the National Emergency and Disaster Management Agency [NCEMA] Standard 7000:2012 Part 3, Part 1. These regulations are designed to regulate water, wastewater and electricity. The Emirates Aviation Division develops BCM and BCP according to NCEMA 7000:2012.

Some NCEMA 7000:2012 regulations include:
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  • Define your own organizational standards and trigger the implementation of business continuity responses in the event of an outage based on their respective business continuity plans
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  • Define the scope of BCM based on mission-critical processes and functions
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  • Establish a BCM committee to address organizational, functional and operational issues
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  • Appointment of Business Continuity Coordinator
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  • Execute BIA - Identify and document RTO and RPO for all mission critical processes and functions
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  • Identify threats and assess impacts, the vulnerability of these impacts, the likelihood of identified threats, and the final calculation and assessment of risks
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  • Measure BCM through internal audit, administrative review and measurement of KPIs
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  • Provide awareness and training, and conduct test cases and exercises
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  • Most importantly, organizations should regularly review and update their BCM

in conclusion

All in all, utility companies respond well to local emergencies. However, challenging the economic environment and changing scenarios have forced companies to let go of their long-term concerns. From an ever-changing environment, it is now the best time to revisit business continuity management and demonstrate the urgency of continuous preparation.

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