Really? Yes, sad but true. I was an IT seminar last week and systemic risk was the main topic. The three presentations were designed for larger companies with multiple locations that have to protect themselves while complying with multiple governmental regulations. Not fun!
However, every company can and should examine risks that can put them out of business. Think it can’t happen? What if a lightning strike occurs and hits the power lines outside your company?
How many days could you be without power? Most companies say that number is about three before serious harm comes to their businesses. An intriguing fact that I heard is that if you are down more than seven days, most companies do not recover. So if your recovery time is less than seven days and hopefully less than three days you’re OK. If not, pack your bags and find another job!
Sure, companies here in Phoenix are not likely to have a high risk of a hurricane. But, what about a spilled cup of coffee on your server that hasn't been backed up? Think that can’t happen? Think again. How about a water leak near your server or power transformers? How about a vehicle coming through your front lobby and taking out something important? (Other than a person of course!)
I know that you’re thinking that some of these things can never happen. There are a lot of folks though, in Colorado, who wished they’d taken out flood insurance despite being told a catastrophic storm happens only once every hundred years. Well, this was the year. Many may never recover financially. All I’m saying is that you can do a fairly simple risk assessment and try to mitigate those risks that are possible. I don’t expect a company to spend large amounts of money (unless you need to) to accomplish this.
Something to think about is that if you do a simple risk assessment, you can use that fact as a sales tool to those customers that are worried about their supply chain continuity. If you are a sole supplier to a contractor, this very fact could ensure that you and not your competitor get the work.
Risk is all around. With a little work, you and Alfred E. Newman will not have to worry at all!