What Is Operational Resilience?

Operational resilience is your business’s ability to withstand a sudden disruption or shock to business operations.

More specifically, it is the set of procedures that allow people, processes, and information systems to respond to changing forces. It enables critical business functions to keep running during a disruption or restore those functions to some predetermined level of performance as quickly as possible.

Using operational risk management and incident response processes, operational resilience is critical to doing business. Your enterprise’s resilience can mean the difference between its success and failure.

Operational Resilience Explained

Gartner defines operational resilience as “initiatives that expand business continuity management programs to focus on the impacts, connected risk appetite, and tolerance levels for disruption of product or service delivery to internal and external stakeholders (such as employees, customers, citizens, and partners).” These initiatives include:

• Security (cyber and physical)
• Safety
• Privacy
• Continuity of operations
• Reliability

Operational resilience is a strategic framework that not only prepares your organization for the unexpected; it helps you to succeed during unpredictable times. Without operational resilience, internal and external disruptions might derail your business operations entirely.

Operations, finance, information security, governance, risk, and compliance (GRC) are all interconnected. Operational resilience supports business services and technology while minimizing the risk associated with various operational disruptions: climate disaster, sophisticated cyber-attacks, global pandemic, and more.

Examples of Operational Resilience

Organizations are investing more in operational resilience in various ways, from cyber-attack preparedness to pandemic planning and more. Here are some examples of where operational resilience matters most to an organization’s crisis management efforts.

Operational Resilience and COVID-19

As the world continues to grapple with conducting business during COVID-19, operational resilience is perhaps more relevant than ever. A pandemic preparedness plan has become critical to maintaining critical business functions.

Businesses have scrambled to maintain critical functions while transitioning to the new remote work model and hybrid environments. Functions that cannot accommodate work-from-home, such as manufacturing, must provide alternative options for social distancing and safe working conditions. These efforts are necessary to support ongoing operations.

Operational Resilience and Financial Services

Operational risks for banks and financial services stem from inadequate or failed IT systems, internal controls, procedures, or policies. These issues can result in employee errors, data breaches, business interruption, cybersecurity threats, or fraud. Operational risk is one of the most critical risks financial institutions need to manage and evaluate.

The interconnections among financial services, financial markets, and global economies emphasize the importance of maintaining services and quickly restoring services that have been knocked off-line. As a result, regulators have begun to provide guidance and drive requirements on this issue.

For example, British regulators recently released an operational resilience discussion paper. U.S. regulators also updated their business continuity management handbook. In addition, the Basel Committee on Banking Supervision (BCBS) released its own operational resilience principles.

Despite those outbursts of regulatory guidance, a single framework for operational resilience has yet to be formalized into new requirements. In the meantime, banks and financial services institutions should closely review these principles to protect their organization from disruption and prepare for future regulations.

What Is the Resilience Lifecycle?

A continuous four-stage operational resilience lifecycle helps you achieve your organization’s safety and well-being. Anticipate, prevent, respond/recover, and adapt can assist you in preparing for and coping with disruptive events.

Anticipate

During disastrous events, it may not always be evident exactly which facilities, people, and processes are crucial. Moreover, the organizational silos, scarcity of data, and varying tools can hinder an adequate understanding of risks and enterprise interdependencies. And a poor sense of prioritization and scheduling can result in inaccurate decision-making.

Operational resilience before any specific disaster comes along can help you perform what-if scenario analysis to plan for optimal, worst-case, and expected outcomes.

Prevent

Some legacy operating processes are not updated for efficiency, integrated risk management, and compliance. As a result, some businesses rely strongly on manually based corrective controls instead of automated preemptive ones.

Fortunately, preventative controls have broad benefits for the business. Automated scans and insightful data can send alerts that warn security teams of potential issues threatening business continuity. You may not be able to prevent a natural disaster or pandemic, but you can avoid chaos and uncertainty with comprehensive response procedures and advanced training.

Respond and Recover

The response and recovery process should be easy if you have brainstormed potential risks and prepared comprehensive procedures in advance. On the other hand, you will struggle if you don’t have clearly defined roles, responsibilities, and processes.

Communication is critical throughout the response and recovery process to assure alignment with business objectives, including regulatory compliance. Clear lines of communication among employees, senior management, board of directors, and supply chain partners are vital to effective recovery.

Adapt

Operational resilience refers to the ability to recover quickly and easily from calamities. Those calamities might not feel like valuable learning opportunities, but they are. Extreme events such as fires, weather disasters, pandemics, and data breaches all provide lessons on working more effectively.

By performing a “lessons learned” after recovery, you can enhance your countermeasures and respond more effectively to the next event. This exercise may also reveal additional ways to improve current processes, especially when adapting to a new normal going forward.

Operational Resilience for Business Continuity and Disaster Recovery

While operational resilience focuses on the continuity and recovery of critical business processes spanning all of the functions and systems within an organization, business continuity plans (BCP) and disaster recovery plans (DRP) are typically designed and performed within each organizational department.

Business continuity plans assure that critical operations can continue with minimal downtime. A BCP begins with a business impact analysis (BIA) to determine the scope and is often conducted in tandem with a risk assessment. Your BCP should also include alternative work settings that allow you to continue operating during a catastrophe and immediately afterward.

Alternatively, a disaster recovery plan helps you transition from those immediate, short-term business processes activated during an incident back to your everyday operations.

To identify business continuity risks, create a list of critical IT systems, networks, software, and third-party service providers whose sudden failures or outages would cause disruption. This list will guide your business continuity and disaster recovery planning.

Using cloud-based software to help manage your operational resilience can save you even more time and money. For example, Amazon Web Services (AWS) helps organizations improve operational resilience through infrastructure, operations, security, and software.

AWS also protects against ever-evolving threats by applying protections to its global infrastructure, and AWS automation and tools help mitigate security risks such as denial-of-service attacks.

AWS Identity and Access Management (AWS IAM) allows organizations to control AWS services and resources and eliminates threats created by rogue servers or unauthorized users. In a recent study, IDC (International Data Corporation) found a 94 percent reduction in unplanned downtime for AWS customers versus their previous on-premises implementations.

Overall, AWS provides a solid foundation for building compliance-ready applications and services, with more than 30 certifications and accreditations – and it integrates easily with our GRC software-as-a-service, ZenGRC.

Enhance Operational Resilience with ZenGRC

Operational resilience is critical to success in any business since our increasingly volatile business landscape means your ability to weather adversity becomes more critical.

GRC software such as ZenGRC lets you identify risks quickly, get intelligent and valuable insights, collect critical data, and put your action plans into action for a shared, enterprise-wide view of your entity’s operational resilience.

ZenGRC also offers audit trail documentation, unlimited self-audits, and integration with all your existing business applications using our ZenConnect plugin.

Schedule a demo and begin your journey toward building your organization’s operational resilience.