In the race to get ahead of the next major crisis, data is king

As operations steadily return to normal across the US and Canada, corporate leaders are reflecting on lessons learned and transitioning from the crisis response phase into one of recovery, and eventually readiness, as they assess the emergent risks that will define the post-covid business environment.

In particular, the pandemic laid bare the degree to which supply chain vulnerabilities impact business continuity—and served as a once-in-an-era litmus test for organizations’ preparation and response plans in an absolute worst-case scenario. Issues with supply, staffing shortages, manufacturing, transport, and ports of entry came together as a perfect storm of crises.

The reality is that many companies weren’t adequately considering a disruptive event of such magnitude, nor were they effectively using data to plan for and manage the crisis as it unfolded.

It’s now abundantly clear that one of the best ways to get ahead of future crises is by better utilizing data analysis and monitoring. Here’s how:

1) Leverage your existing data.
Many companies have incredibly valuable data from across areas such as their supply chain, customers, financials and employees, yet they don’t take full advantage of it when preparing for and responding to crises.  By connecting these various data points through data aggregators and analytics, organizations can apply quantitative and qualitative analyses to help decision making before, during and after a crisis--and better allocate limited resources to those areas with the highest levels of risk exposure.

2) Generate new, internal data by conducting a robust business impact assessment
While people often wince when asked if they have conducted a business impact assessment, COVID demonstrated just how important it is to have a full understanding of priorities during a crisis as well as the resources needed to enable those priorities to not just survive, but thrive, during a crisis.  Conducting a business analysis now, especially with COVID so fresh in the minds of many executives, is critical to prepare your organization for the next crisis.  

Not only will a business impact assessment highlight priorities and ‘must have’ requirements, as well as a multitude of issues and risks with the organization’s current resilience posture, but if done correctly by leveraging data analysis, organizations can better demonstrate the interconnectivity of risk scenarios and take proactive steps to minimize the chances of disruption.  This is a slightly new bent on business impact analyses – one focused on using outputs for prevention and risk mitigation, not just for prioritization and the identifying needed resources. In turn, it’s an exercise that could prove to be far more valuable in the eyes of the Board and senior executives.  

3) Collect new, external data by broadening your scope of possible risk scenarios 
While internal data is incredibly important, it is only one side of the data coin.  External data, focused on existing and emerging risks, can provide an organization with incredible insight into how their risk profile and related exposure is changing over time and provides an opportunity for organizations to get ahead of those risks and potentially prevent them from materializing.  Key metrics to consider are the evolving political, social, regulatory and safety factors of the geographies in which an organization’s employees, vendors, and customers operate. 
COVID provided a clear example of how tracking external data on case count, test positivity, and local mitigation regulations provided insight into the level of business disruption. Similar external metrics should be tracked for things like social unrest, security incidents, insider threats and indicators of workplace violence, crime, corruption risk, economic stability, and political and regulatory developments to better understand full range threats to business and supply chain continuity globally. While COVID provided challenges that organizations and executives hopefully only experience once in a lifetime, realistically, organizations will continue to face many other multifaceted risks and crises in today’s increasingly complicated global business environment.  

We’re now more frequently seeing organizations embrace a ‘what if’ culture— formally identifying best, worst and most likely scenarios against their risk profile, and engaging in conversations with senior leadership about how best to address these risks from both a proactive and responsive perspective.  This sort of scenario analysis allows organizations to think through the potential implications of crises emerging long before they do, and put them in a position of competitive advantage should those crises materialize. These scenarios can be supplemented with data analytics to provide to better assess current and future risk factors, visualize and model how disruptions cascade through the organization, and better monitor the operating environment to anticipate when risk mitigation steps are needed.     

In summary, better use of existing and new data sources, combined with robust data analytics, incrementally improves organizations’ crisis management and business continuity capabilities and more seamlessly integrates them into ongoing business-as-usual operations.  This allows decision makers to be proactive rather than be caught flatfooted when the next disruption arrives.