Term Paper: Importance of Strategic Planning for Training Companies

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¶ … Strategic Planning for Training Companies

The Case of SMEs in the UAE

Organisations are increasingly dependent upon it systems and infrastructure, but they also need good quality employees, and training them properly is crucial. Training companies exist, but the Strategic Planning of these companies does not always work well with the planning that other companies are engaging in. Eventually, organisations are subjected to many risks, so their business is inherently risky. How long can an organisation afford downtime because of a lack of strategic planning and business continuity? How long does it take to recover from a disaster; and, what does it cost? The purpose of strategic planning is to enable a business to continue operations in event of a disruption and/or to survive a disastrous interruption to their business. (Damianides, Parkinson, 2004, p.280).

In the training industry, keeping a good backup of information is considered to be only one issue for effective system recovery, and without considering other elements of a good business continuity plan, strategic planning can easily fail. Business continuity and disaster recovery are so vital to business success that they are no longer a concern of the it department alone, and the strategic planning that businesses are focusing on today must address all aspects of the business (Musaji, 2002). The purpose of this research is to provide a framework, and guidance to management, of good practices in the strategic planning area plan and to determine whether or not these companies are well prepared for the unexpected. To accomplish the objectives of this research a survey will be developed from the literature review and the survey will be given to various SMEs to get their views on strategic planning.

Chapter 1 - Introduction

Overview

Aims and Objectives

Statement of the research question

Chapter 2 - Background of the research

Chapter 3 - Literature Review

Chapter 4 -Methodology

Research strategy for primary research

Limits and restrictions to the study

Discussion - Specifics of the Proposed Methodology

References

Appendix 1: The Survey

Appendix 2: The List of Participating Companies:

Appendix 3: The Selection Criteria for the Companies in the Sample.

Chapter 1 - Introduction

Business in general is exposed to risk. "Risk and uncertainty are part of the everyday operating environment for all organisations. Occasionally the risks may be sufficient to generate a crisis which, if left unattended, can become a disaster." (Davies and Walters, 1998, p.5). Operating disruptions may occur with or without warning, and the outcomes may be devastating. According to the IIA-UK, business is exposed to different kind of threats, which stem from two sources i.e. internal and external. It is estimated that "10% of an organisation's problems stem from outside action, leaving approximately 90% being the result of insiders." (Silltow, 2002, p183). The disruptive event may also be intentional or unintentional security violations that suspend normal operations.

Even brief business interruptions can mean reduced revenues, lost customers or reduced market share," says Davies and Walters (1998, p.5). This is because even small and medium-sized businesses, in any country, play a major role in the economy; thus, it is important that their business operations are rigid and the effects of disruptions in a service are minimised in order to maintain public trust and confidence in the business world. Effective strategic planning establishes the basis for businesses to maintain and recover business processes when operations have been disrupted unexpectedly.

A large majority of what must be handled in strategic planning is business continuity planning (BCP). These kinds of plans are created to prevent interruptions to normal business activity. They are designed to protect critical business processes from natural or man-made failures or disasters and the resultant loss of capital due to unavailability of normal business processes. The aim of BCP is to minimise the effects of a disruptive event on a company. The business continuity plan should also help minimise the cost associated with the disruptive event and mitigate the risk associated with it.

New business practices, rapid changes in technology, and increased terrorism concerns have focused even greater attention on the need for effective Business Continuity Planning (BCP) and have changed the benchmarks of an effective plan. For example, an effective Business Continuity Planning should take into account the potential for wide-area disasters that could impact an entire region and for the consequential loss or accessibility of staff. It also should consider and address interdependencies, both market-based and geographic, among all business participants, as well as infrastructure service providers.

There are many surveys created to estimate the cost of a disaster. For example, "Research by IBM (Varcoe, 1993) showed that 80 per cent of organisations without relevant contingency plans who suffered a computer disaster went bankrupt within 18 months, with a further 10 per cent suffering the same fate within five years." (Davies and Walters, 1998, p.5). On the other hand, Kash and Darling (1998) highlighted that 85 per cent of all organisations acknowledge that crises within the business environment are inevitable. Few of these organisations, however, appear to have BCPs established. Hearnden (1995) identifies that where BCPs have been established the plans are largely focused on information technology (it) (Pitt, Goyal, 2004).

To be effective, however, these plans must focus on more than just the it section of a company. The people that are being trained and all other aspects of the business are just as important as whether the information technology infrastructure remains strong. Because of this, strategic planning must expand and address the whole of the company to truly be as effective as businesses would desire.

Overview

Strategic planning from a continuity sense is the method or process whereby businesses ensure the protection or recovery of operations, including services to customers, when confronted with adverse events such as natural disasters, technological failures, human error, or terrorism. The Business Continuity Institute (BCI) defines business continuity as "a proactive process which identifies the key functions of an organisation and the likely threats to those functions, from this information plans and procedures which ensure key functions can continue whatever the circumstances can be developed" (Silltow, 2002, p.247).

The objectives of a business continuity plan (BCP) are to reduce financial loss to the institution; provide a continuation of services to customers and financial market participants; and mitigate the negative effects of disruptions on its' strategic plans, reputation, operations, liquidity, credit quality, market position, and ability to remain in compliance with applicable laws and regulations. Establishment of an effective business continuity plan is needed for survival. For the plan to be effective it should, according to Fitzgerald (1995), "be matched to the business' true tolerance, be enterprise-wide, get the basics right, develop a business continuity ownership structure, establish a plan discipline, and not over-invest" (Fitzgerald, 1995, p.20).

Without proper planning, businesses cannot recover easily from a disaster. Pat Moore (1995), states that "we cannot expect to recover fully and continue our business or services without planning for the recovery of the facility which houses the business or service operations and which provides the environment in which the business units and processes operate" (p.22). "Planning is the primary responsibility of senior management, as they are entrusted with the safeguard of both the assets and the viability of the company" (Damianides, Parkinson, 2004, p.280). The plan should be comprehensive and flexible as well, but unfortunately these kinds of plans often leave out too much of what they should include, and include issues that are not a necessary part of the planning (Karakasidis, 1997, p.72).

Two specific types of strategic plans -- Business Continuity Planning and Disaster Recovery Planning (DRP) -- involve preparation, testing, and updating the actions required to protect critical business processes from the effects of major systems and network failures. These two concepts are so close as to allow combining them into one domain. There are some differences, however, and understanding them is important to knowing what strategic planning really is and what is best to address for a business. Basically, business continuity planning is the process of making the plans that will ensure that critical business functions can withstand a variety of emergencies. Disaster recovery planning involves making preparations for a disaster, but also addresses the procedure to be followed during and after a loss. DRP is a comprehensive statement of consistent actions to be taken before, during and after a disruptive event that causes a significant loss of information system resources.

According to Damianides and Parkinson (2004), the BCP process includes the following:

Business impact analysis"

Develop business strategies"

Develop detailed plan"

Test and maintain plan"

Most companies hesitate to develop a disaster recovery plan until a disaster occurs. However, according to another survey (Patrowicz, 1998), 85% of the Fortune 1,000 companies have disaster recovery plans. Within these companies, which have disaster recovery plans:

80 per cent have plans that protect their data centre resources;

50 per cent have plans that protect their networks; and Less than 35% have plans that protect their data on PC LANs.(Hawkins, et al., 2000).

In an Ernst &… [END OF PREVIEW]

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