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Insights

Managing risk with your business partners

This blog post has been contributed by Deane Shillito, Director, SGK Consulting, APAC

The COVID-19 pandemic has affected all businesses in some way. As a result, businesses have been forced to execute changes in their operations, with some being better prepared than others. Those who come out of the other side through good planning—or just plain good luck—will have learnt many lessons, good and bad. It is important that these are not forgotten.

Regardless of your situation pre-pandemic, all businesses should utilise lessons learnt to audit their current BCP (Business Continuity Plan) and develop or revise their strategy. How each business does this can vary. Essentially, you should be focusing on three key areas: risk management, incident response, and recovery.

  1. Risk Management – The first and most important step is to identify your business-critical activities. Once identified, you should implement actions that minimise the impact to these activities to ensure the survival of your business.
     
  2. Incident Response – Once you understand what is critical to your business, you need to focus on these activities in your Incident Response Plan. Essentially, you are looking to develop a strategy to contain, control, or minimise the impact to your business-critical activities.
     
  3. Recovery – As part of your BCP, recovery is often overlooked; however, it’s critical to ensure that you can return to normal business as soon as possible. Steps must be taken before an incident to ensure an effective recovery, and importantly, to learn from the lessons that the incident has shown.
     

While the COVID-19 pandemic has proven that developing a robust BCP is more important than ever, it is vital that you look outside of your own four walls and into those of your business partners.

Specific to marketing activities, many businesses rely on third-party suppliers to deliver business-critical activities; therefore, to manage your business risk, you must ensure that your suppliers are proactively managing their risk.

So, what should a marketing or branding business look for in their suppliers?

Risk – First and foremost, look at the specifics your business partners provide and whether they align to your own business-critical activities. This will determine your level of risk. If the risk level is high, have a focused activity with your business partner to ensure that they have a sufficient plan in place to deliver upon your business needs in an adverse event. It is also a good idea to understand what other services this supplier can provide. Even if they are contracted to provide one service, they could be called upon to do other business-critical activities should the need arise during an adverse event.

Prevention – Now is a good time to reflect on those lessons learnt, good and bad, from the COVID-19 pandemic. What happened with your business partners during this time? What was done well? What could have been done better? Asking yourself these high-level questions will allow you to drill down into more specifics such as: Did they have the necessary IT infrastructure in place? Was the day-to-day communication effective? Was there a seamless transition in using new processes or technologies? If they had a BCP in place, was it effective? Answering these questions will ensure that preventative actions can be implemented based upon lessons learnt.

Preparation – Risk is often shared; therefore, you should work with your business partners to ensure a plan is in place to deliver upon your business-critical activities. These necessary steps should be recorded and openly shared with you. Beware of a company that may not be willing to share this information or claim it is intellectual property as this is a good indicator that they are either not comfortable with their ability to support you in a time of crisis or do not value this type of activity. Some topics that this plan cover could include:

  • Triggers to implement the plan
  • Key actions in their response (inclusive of indicative timings)
  • Key contacts (inclusive of escalation hierarchy)
  • A communication matrix showing who is responsible for communicating what and when

Though difficult to predict, impacts to service level agreements (SLAs) should be discussed at this time so that you understand the expected impact to delivery. You can then use this information to more effectively manage your business-critical activities during this period.

Cost – This is an area that is often overlooked but could be very important. You should discuss with your business partner if there are any costs expected to be shared to implement the BCP. An adverse event is not the time to be discussing additional costs for services and could lead to delays in delivery of your business-critical activities.

Recovery – This is difficult to know as it is dependent on the adverse event, but there should be a high-level plan inclusive of timings to resume normal business operations. A continuity plan should not become the new normal.

Implementing the above plan will provide a good foundation for you and your business-critical suppliers to navigate through an adverse event. There will always be challenging times, and flexibility is always required. A strong, structured plan for both your internal operations and those of your suppliers and regular, open, detailed communications provide the best chance to not only weather the storm of an adverse event but to emerge from it stronger through lessons learnt.

About Deane Shillito: Deane brings 20+ years industry experience with extensive knowledge of the pharmaceutical packaging artwork & printing processes. As a member of the SGK Consulting team, he has successfully led numerous initiatives for some of the worlds most prominent brands to identify and implement improvements to their graphic supply chains.

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