Driving Risk Management Governance into the BCM Life Cycle · the customer; i.e., types of...

October 29-30, 2012 • Hotel Pennsylvania

BCI Track – Session 2

Driving Risk Management Governance into the BCM Life Cycle

Doug Weldon, FBCI

Vice President of Product & Infrastructure Risk Management, Thomson Reuters and

President, BCI-USA Chapter


A follow-on presentation to the Spring 2012 CI Conference Session:

Integrating BCM and Development Life Cycles


Presentation Outline

• What is a life cycle process?• Is the BCM management system a life cycle

process?• Where are we today?• Where should we be going?• How does this potentially change BCM as a life

cycle process?• What are the benefits? Potential risks?• Essential ingredient – Risk Management

Governance!


What is a Development Life Cycle

• The structured methodology for managing the full life cycle of a product, business process, or IT system from initial concept through end-of-life.

• Example: The Systems development life cycle (SDLC), or Software development life cycle in systems engineering, information systems and software engineering, is a process of creating or altering information systems, and the models and methodologies that people use to develop these systems.*

* Wikipedia


Example of SDLC Life Cycle*

* Wikipedia


General Benefits of Life Cycle Processes*

• Decreased Costs

• Improved On-time Delivery

• Improved Productivity

• Improved Quality

• Improved Customer Satisfaction

• Improved Return on Investment

• Improvement/Maturity Measures

* www.sei.cmu.edu


BCM Program Life Cycle Process*

* ISO 22313 Draft for Comment


Essentially BS25999-2 Revisited


Applicable Life Cycles

• Requirements standards (e.g., BS25999-2 or ISO22301) provide specifications for audits for certifying a company’s BCMS

• ISO 9001 drives the continuous improvement of the BCMS, as with all ISO life cycles (PDCA)

• Practices (e.g., BS2599-1 or ISO22313) standards describe BCM best practices that describe the process that drives the specific BCM life cycle.


Lifecycle for BC/DR Capabilities


Where Are We Today?

• Nominal Case:– Established BCM program

– Process for establishing capabilities

– Many capabilities established and maintained

– Build BCM solutions after product/process/system is implemented

• Better Case:– Compliant or even certified program

– Capabilities built and maintained to best practices

– But are they the highest quality/lowest cost?


Where should we be going?

• Best Case:– Demonstrate compliance with best practices– Anchor on identified stakeholder requirements (non-

functional requirements as important as functional requirements)

– Design optimal (cost vs. risk) solutions based on requirements

– Regularly validate compliance with (changing) requirements, perform needed corrective actions, report results, and audit findings

– Build BCM solutions as products, processes, or systems are built!


How do we do that?

• The best possible identification of requirements is essential

• A focused discipline on compliance with the BCM life cycle process drives and continuously improves quality

• And this strongly suggests that the BCM and product/process/system life cycle processes should be integrated!


Focus on Identifying and Validating Requirements

• Types of Requirements:

→ Functional Requirements of the Product/Proposition –What the product does for the customer; i.e., types of transactions the customers execute and what kinds of content result.

→ Non-functional Requirements of the Product/Proposition – How the product delivers the functionality in terms of performance, security, recoverability, availability, reliability, and other risk related factors.

C(1)Customers

Products

Processes, Systems,Infrastructures

Suppliers

C(2) C(3)

P(1) P(2) P(3) P(4) P(5) P(6)

I(1) I(2) I(3) I(4)

S(1) S(2) S(3) S(4) S(5)


Product/Process/System Life Cycle

Business Proposal Business Case Define/Design Develop Implement Operate &Maintain

Retire/Reengineer

CONCEPTION APPROVAL

PROCESS OF CONTINUOUS IMPROVEMENT

CONFIRMATION READY TO DEPLOY READY FORPRODUCTION

MEET ROI

READY FOR SUNSET

SUNSET

Plan Do Check

Act


What Does it Mean to Integrate Life Cycles?

• Analyze each of the life cycle process steps to establish the feasibility of integration

• Establish correspondence between life cycle process steps

• Rationalize the steps to ensure that the steps produce analogous, value adding deliverables

• Interleave the activities of the corresponding process steps into a uniform activity set.


BCM Planning and SDLCSystem Development Life Cycle (SDLC)

1.Initiation

2.Development/Acquisition

3.Implementation

4.Operation and Maintenance (Test)

5.Disposal

SDLC

Phase 1:Initiation

Phase 2:Development/Acquisition

Phase 5:Disposal

Phase 3:Implementation

Phase 4:Operation/

Maintenance

Initiation/Definition Design/Development Implementation Test Operations

Disposal


Product/Process/System Life Cycle

Business Proposal Business Case Define/Design Develop Implement Operate &Maintain

Retire/Reengineer

CONCEPTION APPROVAL

PROCESS OF CONTINUOUS IMPROVEMENT

CONFIRMATION READY TO DEPLOY READY FORPRODUCTION

MEET ROI

READY FOR SUNSET

SUNSET

Understand theOrganization

BCMStrategy

BCMResponse

Test andMaintain


BCM Life Cycle Change Implications

• BCM life cycle integration into the product/process/system development life cycle of the enterprise potentially drives changes into the BCM process itself:

– What is a risk assessment in this integrated view?

– What is a BIA in this integrated view?

– How is BCM strategy changed by integrated architectures?

– Many other potential implications.


Benefits and Risks

• Benefits– Better BCM Program integration into corporate

strategies and culture– Attention to BCM at the right times in the life cycle– Greater assurance of optimal cost vs risk solutions– Getting requirements right the first time– Designs more truly fit for purpose

• Risks– Corporation’s development life cycle is undisciplined– BCM Program is under-resourced to deliver– Lack of governance to ensure lifecycle inclusion.


The Essential Ingredient:Governance

• Governance: In the case of a business or of a non-profit organization, governance relates to consistent management, cohesive policies, guidance, processes and decision-rights for a given area of responsibility.*

• Operational Risk Management Governance: Relates to consistent management, cohesive policies, guidance, processes and decision-rights for identifying, analyzing, reporting on, and mitigating operational risks.*Wikipedia


Why is Governance Essential?

• Governance is required to describe and prescribe this integrated process

• To get in the door before requirements or design are established for a new proposition requires a mandatory policy and process for building new products, processes, and systems

• Otherwise, the resulting BCM capability will likely be less than the most cost-effective and timely!


Establishing Effective Governance

• Requires an effective and comprehensive BCM program per the principles of ISO 22301

• Requires the BCM program to be in active alignment with the strategic objectives of the enterprise

• Requires that the BCM program embraces and drives the BCM life cycle as an integral part of the product/process life cycle

• Requires credibility with key stakeholders such as IT systems developers and product/process managers.


BCM as part of Operational Risk Management

Operational RiskManagement Governance

ITILProgram

ISMProgram

BCMProgram

Other Operational RiskDisciplines*

Operational

Resiliency

Operations Mgt.

Incident/Crisis Mgt. & Insurance

Service Continuity Business ContinuityInformation &

Physical Security

Performance Mgt. Contract Risk Mgt. Process Maturity

Quality Assurance

Architecture & Reliability/Availability

*The Path to Operational Resiliency


QUESTIONS?

Driving Risk Management Governance into the BCM Life Cycle · the customer; i.e., types of...

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