All businesses must react to unexpected events. Some situations can be tempered by swift, decisive action, while the effects of others can be far-reaching and long-lasting. Since 2005, fear of a flu pandemic has been escalating around the world. In the United States, this has highlighted vulnerabilities in emergency response capabilities, the deficiencies of a chronically underfunded public health system, and, for businesses, gaps in disaster recovery and business-continuity planning.
According to the Centers for Disease Control and Prevention, the economic impact of a "medium level" avian-flu pandemic in the United States could be between $71.3 billion and $166.5 billion. A Mercer Human Resources Consulting survey found that in this country, only 7 percent of respondents have a business-contingency budget to cover this potentially catastrophic event. This lack of foresight places organizations in jeopardy should a pandemic happen.
In a flu pandemic, Mercer expects employee absentee rates from 20 percent to 60 percent. Companies without a communications infrastructure to support large numbers of remote workers would find retrofitting difficult when vendors and suppliers are also under stress. Disruption to business as usual could last anywhere from several months to a year or more. Unprepared companies could find their very survival jeopardized. Public companies with insufficient planning would face issues with shareholders and in the capital markets.
Pandemic preparation means understanding how the business runs; what functions, systems and processes are critical, and where critical work is done and by whom. During a pandemic, noncritical functions might be jettisoned to focus on critical "keeping the lights on" processes and capabilities needed for managing unusual business conditions. Companies with outsourced business and information-technology functions are relieved of some personnel, facilities and infrastructure management expense and focus during periods of stress, but they might face added communications and coordination complexity.
To respond to a pandemic, companies must handle issues related to personnel, technology, physical plants and locations, and relationships with customers, distributors, suppliers and other third parties. Organizations must understand their contracts, what they do and do not cover, and how such a crisis might affect their terms and conditions. Filling coverage, service and other gaps when not under a business survival crunch is both easier and cheaper than waiting for a pandemic to occur.
Here are key facets of a pandemic response:
Human Resources: Appropriate handling of people issues is key to managing a pandemic. A health-related crisis affects employees, their families, retirees, contractors, temporary workers and others. Management might be dealing with employee compensation and benefits issues, temporary relocations and layoffs, as well as dissemination of health-care details and other information. All the while, it must provide overall leadership and guidance. Having people--in-house or outsourced--who can effectively and rapidly deal with these issues could be critical to long-term corporate survival.
Technology: A reliance on IT infrastructure to reduce the need for face-to-face interaction and minimize exposure to infection must be implemented in advance of a pandemic. These capabilities allow personnel to work remote from the office, to communicate over the Internet, and to collaborate with other employees and locations. To access these capabilities companies must have scalable network, communications and hardware/software resources available on day one, not weeks into the event.
Physical Plants and Locations: Infection and contamination potential means companies need upgraded capabilities for cleaning and maintaining buildings, including air conditioning and ventilation, as well as increased security and building-access control. Protecting the health of those employees who do come to work is critical to doing "business as unusual."
Relationships: All stakeholder relationships will be stressed during a flu pandemic. Managing relationship risks will be as important as any other form of risk management that protects the organization from internal and external threats.
Companies need to understand where they lack capabilities and expertise to manage the business during a pandemic and to decide where to acquire them. It is never too soon to begin this process but it could at some point be too late.
JUDY JOHNSON is vice president and principal solutions architect with Patni Computer Systems.
April 15, 2007
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