Evaluation of Business Continuity Management - A case study of disaster recovery during the Covid-19 pandemic

Abstract

Background
The Company produces and sells specialised products and technical solutions worldwide through more than ten different technology-based and decentralised Business Units. While the "Business continuity management"-programme has been implemented throughout the Company for many years, many of the Business Units' "disaster recovery"-capabilities had not been tested until the Covid-19 pandemic.

Problem Formulation
In recent years, the follow-up by corporate regarding the organisation's BCM-implementation has reached a plateau. The pandemic outbreak of Covid-19, where the Company had to put the disaster recovery-practices to the test, provided an unparalleled opportunity to evaluate the current processes to better understand how the disaster recovery planning process can be improved. Thus, the Company has expressed a desire to evaluate the current BCM program, primarily focusing on disaster recovery.

Purpose
To provide suggestions on how the Company's Business Continuity Management-practices can be updated to improve future disaster recovery.

Method
The study followed a combined explanatory and descriptive approach. A theoretical framework was developed and applied in a multiple case study to create an increased understanding of the research area. The selected cases were three business units with associated business functions, where each case consisted of four interviewed individuals who had different responsibilities in a supply chain setting. An abductive research approach was adopted to study "Business continuity management and management of disaster recovery" at the Company during the Covid-19 pandemic. This thesis has been a complete elaboration between the two authors. Each author has been involved in every part of the process and contributed equally.

Conclusions
The analysis indicated similar patterns across the cases. Disaster recovery has, in all cases, mainly been coordinated through the Company's crisis management structure. Recovery of disruptions in the material flow has mainly been managed within the regular functional structure and through collaboration with other Company functions. The measures have, to a certain extent, been developed reactively. The existing BCM-programme has contributed during disruptions in the supply of materials and components and manufacturing. Furthermore, the authors identified several improvement areas for the Company's BCM program, including the scope and the objectives of BCM, the business impact analysis, and training.

Contribution
Through a case study, the authors provide insight into how a leading multinational company has been affected by Covid-19. This study is an early indication of how the pandemic contributed with insights about appropriate adjustments for a company's BCM-programme to ensure a more effective disaster recovery in the future.

Popular Abstract

During 2020, the Covid-19 pandemic created immense strain on the global economy. Measures introduced by authorities to curb the rate of infection caused significant disruptions in global supply chains, highlighting their vulnerability and forcing companies to revaluate their exposure to disruptions.
While Risk Management focuses on managing expected specific risks, Business Continuity Management (BCM) and continuity planning in particular, serves as an “all hazards” approach, and aims to achieve recovery, regardless of the cause. When companies face disruptions, a few important questions need to be answered to guide the next steps. For example: “How long can our business sustain a disruption? Which of our processes and activities should we prioritise to recover? How quickly must recovery be achieved? How can we recovery it effectively?”. By implementing BCM, companies can ensure that these questions are answered before a disaster strikes.

In the context of Covid-19, the authors were invited to a global industrial company to examine the current BCM-practises and the contribution of Business Continuity Planning to the recovery from Covid-19. During the pandemic, the company experienced major disruptions throughout its supply chain and was forced to temporarily close multiple factories.

The thesis was conducted as a case study where interviews were held with strategic managers within sourcing, manufacturing, sales, and business unit management, representing three major Business Units at the company. In addition, a literature review was conducted to develop a theoretical frame
of reference, used to guide the data-selection and analysis.

The evaluation of the current BCM-practices at the company revealed a few key improvement areas; most of which were partly recognised by the interviewees prior to the pandemic. The absence of a business- oriented scope when conducting the analysis and deciding what to protect has resulted in a misalignment between what is critical to the business and what is considered critical at the site. This misalignment propagates in the subsequent development of recovery plans, resulting in the development of strategies based on site-criticality and not business criticality, which are rarely approved for implementation. Further, by having a site- oriented scope with emphasis on infrastructure, functions and processes which transcends sites have been overlooked. Additionally, no clear expectations and objectives of the BCM-program have been embedded in the organisation.

In terms of managing recovery from the Covid-19 pandemic, the findings suggests that the continuity plans had limited contribution. With individual disruptions being limited to a couple of weeks, few plans had been developed to provide the necessary speed of recovery. Hence, the majority of disruptions have been dealt with reactively, either through dedicated Crisis Management Teams or within the regular management structure. However, the findings also suggest that while the direct contribution of continuity plans has been limited, the analysis to understand what is critical, even from a site-perspective, has contributed to the prioritisation and coordination of recovery.

• author: Tegström, Fredrik and Nilsson, Filip
• supervisor: Andreas Norrman
• organization: Engineering Logistics; Department of Industrial Management and Logistics
• course: MTTM05 20202
• year: 2021
• type: H2 - Master's Degree (Two Years)
• subject: Business and Economics
• keywords: Business continuity, Disaster recovery, BCM, Covid-19, Continuity planning, Case study
• report number: 5936
• language: English
• id: 9040997
• date added to LUP: 2021-03-04 13:07:52
• date last changed: 2021-03-04 13:07:52