Discover the importance of operational resilience in today's business landscape and how it can impact your organization.
Introduction
If you are in a regulated industry, or rely on supply chain, chances are you are familiar with the term “Operational resilience”, or OpRes. Operational Resilience is a series of regulations related to Banking that has gained significant attention in recent years, especially as businesses and organizations face an ever-increasing array of challenges and disruptions. This article aims to explain operational resilience, highlighting its key components and benefits.
Operational resilience stem from the broader concepts of risk management and business continuity planning, which emerged as organizations sought to prepare for and respond to disruptions. Over time, it evolved to encompass a holistic approach, integrating cybersecurity, disaster recovery, and regulatory compliance to ensure that organizations can withstand and adapt to a wide range of challenges.
OpRes started in the financial sector, particularly within large banks and financial institutions, as they needed to ensure continuous operations despite disruptions. Regulatory bodies and industry standards, such as those from the Bank of England and the Basel Committee on Banking Supervision, played a significant role in formalizing and promoting the concept to safeguard the stability of the financial system.
Operation resilience defined
Operational resilience defined as the ability of an organization to continue delivering critical services, product, and functions during and after disruptions. These disruptions can range from natural disasters and cyber-attacks to supply chain failures and pandemics. Essentially, operational resilience ensures that a business can "bounce back better" and maintain operations, even when unexpected events occur.
major components of operational resilience
- Risk Management: Identifying and assessing potential risks that could disrupt operations is the first step. This involves understanding the types of threats an organization might face and their potential impact.
- Business Continuity Planning: This involves creating plans and procedures to ensure that critical functions can continue during a crisis. This might include having backup systems, alternative suppliers, or emergency response plans.
- IT Resilience: Since many business operations rely on technology, ensuring that IT systems are robust and can recover quickly from failures is crucial. This includes having data backups, cybersecurity measures, and disaster recovery plans.
- Crisis Management: Effective crisis management involves having a clear plan for how to respond to emergencies. This includes communication strategies, roles and responsibilities, and coordination with external agencies.
- Adaptability and Learning: Operational resilience is not just about having plans in place but also being able to adapt and learn from experiences. Organizations need to regularly review and update their resilience strategies based on new threats and lessons learned from past disruptions.
ORGANIZATIONAL benefits of operational resiliencE
Operational resilience provides enterprise benefits that extend far beyond recovery and compliance.
- Competitive Edge: enhancing your company’s ability to swiftly adapt to and recover from disruptions builds trust with customers and stakeholders, fostering a reputation for reliability and robustness in an increasingly unpredictable market
- Customer Trust: When a company can maintain operations during a crisis, it builds trust with its customers. This reliability can be a significant competitive advantage.
- Regulatory Compliance: In many industries, regulators require businesses to have resilience plans in place. Failing to comply can result in fines and legal issues.
- Financial Stability: Disruptions can be costly. Operational resilience helps minimize the financial impact of these events, ensuring that the organization can continue to generate revenue and meet its financial obligations.
- Reputation Management: A company's ability to handle crises effectively can enhance its reputation, while failure to do so can damage its brand and stakeholder confidence.
final thoughts
In a world where disruptions are inevitable, operational resilience is crucial for any organization that wants to thrive. By understanding and implementing the key components of operational resilience—risk management, business continuity planning, IT resilience, crisis management, and adaptability—businesses can ensure they are prepared to face whatever challenges come their way. This not only helps in maintaining operations but also in building a robust, trustworthy, and forward-thinking organization.
We here at OpResONE can help you on your journey regardless, whether you are taking the first steps in business continuity and operational resilience, or looking to increase your resilience profile.
