Firms globally and across industries are focusing on resiliency. The organization has to maintain operations in the midst of uncertainty and change, and this is becoming a key regulatory requirement in some industries (e.g., financial services). This requires a holistic view into the objectives and performance of the organization in the context of uncertainty and risk. Organizations are striving for business and operational resiliency that requires integration and symbiotic interaction of risk management and business continuity. Modern organizations have to be a resilient organization with full situational awareness of the interconnected risk environment that impacts them.
The Essence of Operational Resilience
Operational resilience is not just another buzzword; it holds the key to an organization’s ability to maintain its operations seamlessly despite disruptions. Unlike traditional business continuity planning, operational resilience is a comprehensive approach that integrates risk management and business continuity efforts. Its objective is to foster a culture of adaptability, preparedness, and learning within the organization.
Business Resilience vs. Operational Resilience: Unraveling the Differences
Before we delve into operational resilience, it’s essential to understand its distinction from business resilience. Business resilience encompasses an organization’s strategy, liquidity management, hedging practices, and overall operations. On the other hand, operational resilience focuses specifically on the internal processes, services, systems, and relationships that underpin business operations.
The Core Elements of Operational Resilience
Operational resilience goes beyond the realm of IT and technology; it embraces the very essence of an organization’s functioning. By fostering collaboration between operational risk management, business continuity management, and third-party governance, risk, and compliance (GRC) teams, operational resilience becomes a powerful tool for mitigating and managing risks effectively.
The Power of Proactivity
One of the fundamental characteristics that sets operational resilience apart is its proactive approach. Rather than being solely reactive to disruptions, organizations are encouraged to be preventive, adaptive, and responsive. By actively monitoring and addressing potential risks before they escalate, organizations can significantly reduce the impact of disruptions on their operations.
Defining Operational Resilience: Learning from the Best
Financial regulators have provided their insights into operational resilience, and one definition stands out for its comprehensiveness and effectiveness. The UK Financial Conduct Authority (FCA) defines operational resilience as the ability of firms and the financial sector as a whole to prevent, adapt, respond to, recover from, and learn from operational disruptions. By emphasizing prevention and learning from past incidents, the FCA’s definition aligns with the essence of proactive operational resilience.
Unlocking the Potential: Operational Resilience Across Industries
While financial services may be the trailblazers in implementing operational resilience, this concept is relevant to all industries. The true essence of operational resilience lies in embracing it holistically, incorporating people, processes, services, and third-party relationships. By doing so, organizations can pave the way for a future that is secure, agile, and sustainable.
The Journey Ahead: Embracing Operational Resilience
In conclusion, operational resilience is the lifeline of businesses in today’s dynamic world. Operational risk managers play a pivotal role in adopting this transformative approach within their organizations. By integrating risk management and business continuity efforts, organizations can achieve true operational resilience and navigate uncertainties with confidence.
As we embrace the journey of operational resilience, we pave the way for businesses to thrive amidst uncertainty and change. Let’s equip ourselves with the tools and mindset to create a resilient future for our organizations and empower them to conquer any challenge that comes their way. The time to act is now, and the rewards are limitless.
Introducing Operational Resilience Management on Connected Risk, the holistic GRC software solution designed for heavily regulated industries. Operational Resilience Management allows organizations of all sizes to ensure they are ready for whatever risk comes their way. With our unique approach to workflows and risk management, enterprises of any size can make a difference in their organization. Learn more about Operational Resilience on Connected Risk by clicking here or filling out the form below.
