Friday 14 October 2005
BSI’s Business Barometer reveals extent businesses are unprepared for crises.
At least 25 per cent of UK businesses are putting themselves at unnecessary risk by failing to prepare for crises such as IT or supply chain failure, according to a new report issued by the British Standards Institution (BSI).
BSI’s Business Barometer, launched today to coincide with the 36th World Standards Day, surveyed 100 senior decision makers from FTSE 250 businesses across several industry sectors, including banking and financial services, engineering, retail and media.
Highlights of BSI’s survey of FTSE250 senior decision makers revealed that:
- Over a quarter (28 per cent) believe businesses are not prepared for failure in the supply chain. Recent events such as natural disasters and major business supply chain issues demonstrate the vulnerability of business to respond to and recover from such events.
- One in four (25 per cent) think businesses are not prepared for catastrophic failure of IT.
- Almost half (45 per cent) of those surveyed believe businesses are not prepared for forced relocation due to unforeseen circumstances, such as terrorist attacks or natural disasters.
Mike Low, Director of BSI British Standards, commented: “The FTSE 250 has a market value of over £200bn, and it is alarming that such a large proportion of businesses – around a quarter of them - do not feel adequately prepared for major issues such as catastrophic IT failure or supply chain problems. It is vital that the hard core of businesses without adequate provision put appropriate measures in place to protect themselves as early as possible.”
The role of standards in managing risk
The survey revealed a marked contrast of preparedness for crises between businesses who widely adopt British standards and those who don’t (E.g. Standards for quality management, business continuity management, environmental management). Seventy eight per cent of businesses who adopt standards felt prepared to handle catastrophic IT failure, compared to only 28 per cent who don’t adopt standards. Furthermore 71 per cent of businesses who adopt standards felt prepared to deal with failure in the supply chain, compared to 43 per cent who don’t adopt standards.
“Standards provide a practical framework for managing uncertainty and, in addition, offer tangible fiscal benefits to business. Recent DTI research valued standards as contributing £2.5bn per annum to the UK economy. There are tools available to help minimise the impact of crises and it’s very high risk for businesses to ignore the benefits they provide,” said Mr Low.
Protecting consumer and business interests
All of the companies surveyed (100 per cent) believe that consumers view businesses that apply British standards more favourably than those who don’t. Furthermore, 87 per cent of senior business decision makers agreed that with the increased reliance on outsourcing, standards are more important than ever because they enable businesses to have confidence in the way sub-contractor’s work. BSI is working closely with business to develop new standards for relationship management, risk management and business continuity management to better serve their needs.
Mr Low concluded: “We hope these findings, released on World Standards Day, will demonstrate to UK businesses the need to employ the use of standards strategically to plan for the future, provide consistency and quality for customers and ultimately help protect and grow the bottom line.”
- Ends -
Notes to editors
- Research: For BSI’s Business Barometer, Populus interviewed a random sample of 100 senior decision makers in FTSE250 companies by telephone between September 28 and 30 2005. Interviews were conducted across the country. Populus is a member of the British Polling Council and abides by its rules.
- World Standards Day: World Standards Day (WSD) is celebrated on 14 October and the theme for 2005 is “Standards for a safer world”. WSD is a means of recognising the importance of standards and standardization in increasing efficiency, reducing barriers to trade, improving safety, helping to provide consistent and quality products and services, improving productivity and supporting regulation. It is also a time to pay tribute to the collaborative efforts of the thousands of experts worldwide that develop the voluntary best practice documents published as standards.
- Standards: Recent events have emphasised the need for companies to integrate business continuity and risk management into their corporate strategy to minimise the instance of loss or damage to finances, staff or reputation in difficult times. By providing best practice guidance, standards help business plan for and cope with potential issues in an increasingly uncertain environment.
- DTI macroeconomic research: This research was commissioned under the banner of the National Standardization Strategic Framework (www.nssf.info) and was based on the formal standards catalogue of the UK’s national standards body, the British Standards Institution.
- BSI: BSI British Standards is the UK’s national standards body, working with government, business and consumers to represent UK interests and facilitate the production of British, European and international standards to meet economic and social needs. Two new Technical Committees on risk management and business continuity management were formed by BSI in August 2005.