Managing Threats and Business Disruption Risk
As many experienced in early 2020, when the WHO declared a global pandemic, unexpected business disruption risk can come from anywhere and impact every part of your company, from operational efficiency to ROI. Disruption means your business’s ability to continue as expected or planned — any threat, risk, or event that interrupts your company’s processes or operations.
These disruption events can be positive, like introducing a more-efficient technology to streamline business operations, which might mean shutting down a department for a day or two to accommodate training. Or the event can be dangerous and force you to adapt or modify your standard operating procedures (SOPs) to maintain operations and stay open. (Think: catastrophic extreme weather events or global virus outbreaks.) Often confused with “disruptive innovation” — consider how streaming services impacted the traditional cable television business — true business disruption forces a complete change from normalcy, not just an adaptation to it.
Exposure to these threats can seem overwhelming, especially without proper policies and solutions to detect and protect your business from them. However, you can’t mitigate what you don’t understand. So the first step in effectively preventing business disruption due to a threat begins with understanding the risks that leave you vulnerable to it, so you can proactively strategize a threat protection plan.
6 Risks That Contribute To Business Disruption
Both manufactured and natural risks may contribute to business disruption in different ways and with unique consequences. These threats can be your organization’s downfall if poorly addressed. But being aware of these risks can also push your risk management and mitigation to the next level, providing an opportunity to develop a threat protection strategy. Knowing the most common risks helps you better survey, detect and respond to your risk and threat landscape.
1. Technical and machine breakdowns
While technology and machinery offer countless benefits to companies in all industries, there’s no such thing as perfection. Machinery breaks. Production gets bottlenecked. Technology has bugs. Any of these breakdowns can result in downtime, slowed production, or even shutdowns that seriously threaten your entire business and your bottom line. Slowed production and shutdowns have a trickle-down effect. Clients get upset when you can’t deliver on time and may cancel their contracts. Fewer contracts lead to a decrease in revenue, which could keep you from having the resources needed to fix the problems that got you there in the first place.
Don’t ignore maintenance or repairs until something breaks. Instead, use internal auditing and IT risk management software to gain operational oversight. The more you know about your real-time IT and technical operations, the better you can proactively identify and prevent potential breakdowns, protecting your workforce, product delivery, and brand reputation from unwanted business disruptions.
2. Regulatory or legal changes
Complex industries such as healthcare, banking and financial services, and manufacturing require increasingly sophisticated regulatory and legal guidelines and the ability to manage compliance with them. Failure to comply with local and international regulatory changes increases risk — like fines, workforce limitations, and more frequent external audits — to your operations, overall team, and revenue line.
Businesses can proactively address regulatory and legal changes by building an agile governance, risk, and compliance program that avoids data and information silos and simplifies compliance obligations through technology solutions. Using a GRC tool to monitor and improve your regulatory change management process can help deliver on compliance obligations efficiently, instantly notifying those who need to know with precisely what they need to know, reducing reliance on spreadsheets and emails. Resolver’s Compliance Management application also offers automated compliance libraries to update you on the latest regulatory changes as they happen.
3. Cyber events
Over 2.2 billion people were affected by data breaches or other adverse events in 2018 alone. These technological events result in revenue, information, and production loss, requiring increased time and resources to recover. While we think of cyber events and attacks as an IT risk issue, it’s very often the gaps in awareness of the first line that unintendedly create a corporate security risk with IT and data consequences.
Not all cyber events directly affect your production, but they can profoundly impact your business relationships with customers and the media. How you manage them can be the difference between quickly recovering your public image or not.
For example, hackers received limited information in their 2021 ransomware attack on the Colonial Pipeline, the largest petroleum pipeline in the US. However, Colonial failed to act quickly, paying over $4.4 million in damages. Heavily criticized by the press, Colonial has yet to recover fully.
4. Unforeseen catastrophes
Floods, earthquakes, fires, explosions, and other unforeseeable disasters have economic consequences capable of crippling even the most successful business. Physical property damage, product damage, and even employee injuries pose cost increases that impact every part of your business. Not many companies have the liquid flexibility to accommodate one — let alone more than one — of these significant threats.
Consider the aftereffects of Hurricane Katrina. The hurricane damaged the Port of New Orleans, which ferried over 20% of America’s total cargo tonnage, forcing it elsewhere. The inability to use the port slowed the national supply chain and increased transportation costs in countless industries. A similarly massive impact on transportation and supply chain industries happened when a large cargo ship called the Ever Given got stuck in the Suez Canal for six days in March 2021, freezing up a daily USD$10 billion in trade.
5. Pandemic outbreaks
Pandemics pose a substantial threat to your business because of their direct impact on your workforce. The spread of mass outbreaks and health-related events have a ripple effect. When people stay home due to sickness — or to reduce the spread of illness — it negatively impacts your bottom line. While remote work is becoming more common, it can mean more downtime, less coverage, and longer customer wait times, creating business losses if done inefficiently.
For example, nearly every business in the world is still recovering from the continued aftermath of the COVID-19 pandemic, which created a 15% increase in manufacturing and labor costs. As a result, companies fronting these costs faced increased financial threats, whereas those that couldn’t manage the inflation experienced losing workers and productivity.
6. Supply chain challenges
Machinery isn’t the only thing that can break a business. Supply chain disruptions pose a serious risk, including interrupted production, sales, and distribution processes. A strong supply chain is crucial to helping your company grow and scale, and any natural disruption to your supply chain creates delays or cost increases you can’t afford.
It’s not news that COVID-19 created unprecedented supply chain threats and had a global impact across industries. However, few felt more disruption than the automotive supply chain. The virus surfaced in China, one of the world’s largest car parts suppliers. China enforced strict stay-at-home orders to limit the virus’ spread, resulting in large-scale factory shutdowns. With China’s continued Covid-zero policies, the automotive industry continues to see delayed production, late shipments, and postponed releases over two years later.
How Threat Intelligence Benefits Business Continuity
Despite their desire to proactively get ahead of incidents, many security professionals have been frustrated by the inability to reliably identify and mitigate threats for a few reasons.
- The huge volume of signals generated by a large enterprise makes picking up on warning signs challenging.
- Most security teams struggle to quickly build strong profiles for potential threats and are not trained in the application of threat assessment methodologies, and thus find it hard to reliably assess threats at scale.
- With many facing organizational siloed systems and diffusely-located teams, ensuring a timely and accurate threat response is difficult.
- Addressing vulnerabilities before an incident materializes requires organizational buy-in through detailed reporting and accurate measurement of the benefits and effectiveness of past programs.
It’s not enough to understand the risks that contribute to business disruption. You must be able to rank their severity and urgency to best utilize your resources and mitigate the most significant threat first. And to do this effectively, reducing false alerts and ensuring threat, case, and investigation teams have the right data and intel to have an actionable follow-up, you need a technology solution.
Threat intelligence, also called risk intelligence, is a security concept that uses AI-driven technology to proactively establish a more accurate understanding of your risk and possible threats. The better you understand your threat landscape, the better you can protect your organization from a complete business disruption through threat strategy and action plans.
How Resolver Helps Minimize Business Disruption Risk
Risk intelligence lets you transform risk from a disruptive factor to a value driver that reduces coordination fatigue and ensures effective resource and communication allocation. While a one-off software might meet your needs, having a partner that maximizes your return with risk intelligence, investigations and case management, incident management, and threat protection in one simple-to-use, no-code platform is even better.
Resolver’s Threat Protection application manages threat intelligence alerts from any source, enabling security teams to find connections across data sets and spot early warning signs. In addition, our fully integrated case management solution ensures potential threats are evaluated comprehensively to help determine the right course of action and prevent potential threats from causing business disruption. From there, our notifications, workflows, and reports make driving mitigating actions and showcasing the value of your threat program streamlined and easy. Additionally, Resolver can integrate with existing internal reporting systems (including hotline, email, and exception reports) to deliver unparalleled visibility to threat teams. With Resolver’s embedded IPaaS, you can integrate with any third-party data feeds your organization subscribes to.
Learn more about Resolver’s Threat Protection application, reach out to a sales representative today, or request a demo to see it in action.