Assess business continuity and resilience in terms of value of investment rather than return…
- Published: Tuesday, 14 May 2019 07:11
Business people are comfortable talking about return on investment (ROI), but this may not be the right way to assess spend on business continuity and resilience programmes, says Karven Naidoo, client executive at ContinuitySA. He argues that looking at the total value of the investment (VOI) is a far better way of assessing the worth of an investment with many intangible benefits.
“To be sure, ROI discussions are useful when the amount invested can be linked to the amount the investment returns, but sometimes returns include intangibles that have huge worth that is hard to express in monetary terms,” he says. “Much marketing spend falls into this category, as does business continuity and resilience. The value a company gets from investing in business continuity and resilience far exceeds the cash it expends.”
The intangible value that can be obtained from business continuity and resilience is made up of many elements. One is the organizational and process knowledge that comes from the business impact analysis required by a business continuity management programme. How exactly do a company’s processes interact with each other, and what is their relative importance? Many companies do not possess this knowledge at any granular level, and it can in turn lead to improved collaboration and planning at every level.
Of course, investing in business resilience strategies and capabilities also puts the company on the right side of regulators and stakeholders.
Another significant value to be obtained is the avoidance of the damage to both brand and reputation inherent in a data hack or inability to trade. Finally, an investment in business continuity will mean the company has to undertake regular, in-depth risk assessments, something that greatly enhances all planning activities.
“Value of investment attempts to measure the multitude of intangible, hard-to-quantify benefits that flow from business continuity and resilience management. But one could also argue that it also includes an element of return on investment because, ultimately, the cash value of business continuity must be equivalent to the value of the company itself, including the future income it could generate for shareholders,”
Mr Naidoo concludes. “One could argue that an investment in business continuity is an investment in safeguarding the company’s future profits and brand.”