KPMG Study: Business Resilience in China


Written by Phil on May 28, 2009 in Business Continuity.

“The year 2008 will be remembered in China for several contrasting events. Early in the year the country was blanketed by heavy snowstorms across central and southern regions, and later shaken by a devastating earthquake in the south-western province of Sichuan. The second half of the year was dominated by the successful staging of the Olympic Games in Beijing.

“These events, whether negative or positive, all served to highlight the importance of business continuity in China. Business leaders and officials recognise that effective business continuity management can reinforce the country’s economic resilience during tumultuous or high-profile events.”

Key findings from KPMG include:

  • Due to industry regulations and the globalization of business, an increasingly high proportion of companies in China have deployed business continuity management (BCM) programs. However, this has been a relatively new phenomenon as a majority of respondents said that such a program had only been put in place within the last two years.
  • BCM programs at organizations in China have typically received senior-level executive support. A majority of respondents identified the Executive Board as being responsible for implementing the program, with the general management being the primary owner/coordinator of the program. Such support not only shows the high strategic value given to such programs, but should also ensure stronger buy-in from employees.
  • The results show that organizations in China are genuinely concerned about business continuity, with hardware failure being the most pressing area of concern. This underscores the increasingly interconnected business environment in China and the rising cost of disruptions to these organizations.
  • A fundamental shortcoming for many organizations is the lack of frequent testing or measurement of their systems. The current economic turmoil may heighten those risks as staff turnover and organizational restructurings become more commonplace.
  • Many organizations in China do not fully appreciate the value of ensuring that their continuity plans are aligned with current goals and business needs. The infrequency of testing suggests that costs or availability of resources may be key concerns.
  • Many of the respondents felt that their employees were not receiving sufficient training on business resilience and continuity issues. This highlights a huge risk for these organizations, as having the right processes and programs in place may count for nothing if their own personnel do not know what roles and tasks they need to assume in the event of a major disruption.
  • Business impact analyses and risk assessments are not common in organizations in China, with a significant majority reporting that their organizations never conducted such an assessment. This may indicate the low appreciation of such tools for business planning and management in China.

See Business Resilience in China: A KPMG China Study by Edge Zarrella and Ning Wright.

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