Operational resilience represents a strategic requirement for businesses – the ability to anticipate, withstand, and swiftly recover from disruptive events. Events that could otherwise cripple operations and jeopardize long-term viability. It includes the convergence of risk management, agile processes, and internal culture to navigate an increasingly complex and unpredictable landscape. Done right, operational resilience enables organizations not just to maintain business continuity, but to actually seize opportunities amid volatility.
Yet there’s a persistent and outdated belief among many in the business world that ‘there needs to be a trade-off between efficiency, growth, and resilience’. The most forward-thinking companies recognize that not only does this way of thinking no longer apply, but that the reverse now holds true. In an interconnected global business landscape driven by technology, the proactive pursuit of an operational resilience strategy means that protecting against downside risks can actually help businesses increase output and productivity. The ROI pays off.
Teridion’s innovative approach to network resilience leverages intelligent routing algorithms, software-defined networking, and a global network backbone that connects 25 public cloud providers across 500+ points of presence.
Why Operational Resilience Is So Important Today
Resilience isn’t just about responding to the needs and crises of the moment. It’s building out an approach that leverages people, processes, and digital tools to expect the unexpected. For example, IBM to move 95% of their 350,000 global employees to work from home in just 48 hours during the global pandemic. And it’s Maersk and Zim to overcome global supply chain disruptions stemming from the Red Sea crisis.
Key Aspects of Operational Resilience
Organizational Structure and Processes
Resilient organizations often have flatter, more decentralized structures that allow for rapid adaptation to change and swift responses to disruptive events. These structures break down silos and facilitate seamless coordination across different functions to tackle disruptions collectively. Processes are designed to promote a culture of continuous learning, conducting simulations or drills, and incorporating lessons learned. Clear governance structures with defined roles and responsibilities ensure these efforts are resourced and prioritized across the organization.
Technology
Technology plays a pivotal role in operational resilience for modern businesses, with end-to-end digitization being a key enabler.
First and foremost, digital platforms and integrations allow smart organizational structures and processes to thrive, supporting real-time monitoring, information sharing, and collaboration. This visibility lets organizations quickly identify potential disruptions, bottlenecks, or deviations from normal operations so business units can coordinate responses effectively. Increasingly, this approach extends beyond internal teams and across the entire supply chain. According to Katy George, Senior Partner at McKinsey & Company, “The need for visibility on both the demand and supply side is what will enable organizations to withstand disruptions with minimal impact to productivity—and potentially while improving productivity.”
Secondly, advanced analytics, machine learning, and predictive modeling can also be leveraged to anticipate and proactively address potential issues before they escalate into major disruptions. End-to-end digitization streamlines and automates critical processes, reducing manual interventions and minimizing the risk of human error. Automated workflows, robotic process automation (RPA), and intelligent process automation (IPA) technologies can help organizations maintain business continuity even in the face of disruptions by ensuring that essential processes continue to function reliably. Moreover, cloud computing, virtualization, and containerization technologies support scalability and remote access, allowing businesses to rapidly adapt their IT infrastructure and applications to accommodate changing demands and work patterns during disruptive events.
Finances
At its most basic level, operational resilience ensures that critical financial processes, such as invoicing, payments, payroll, and financial reporting, continue functioning so organizations can meet regulatory requirements and honor financial obligations. Organizations protect their financial assets and revenue streams by identifying, assessing, and mitigating operational risks like cyber threats, fraud, system failures, or supply chain disruptions. This agility also allows finance teams to rapidly adjust financial models, forecasts, and strategies so they can seize new financial opportunities that may arise from disruptions.
By demonstrating operational resilience and the ability to withstand and recover from disruptions, organizations build trust and confidence among stakeholders, including investors, creditors, and customers. This strengthens their financial reputation and credibility, easing access to capital, favorable credit terms, and maintaining a positive financial standing.
Regulatory Compliance
In recent years, regulatory bodies have placed increased emphasis on operational resilience, recognizing its criticality in maintaining financial stability, protecting consumer interests, and ensuring the continuity of essential services.
One notable development in this regard is the Digital Operational Resilience Act (DORA), proposed by the European Commission in 2020. DORA aims to establish a comprehensive regulatory framework for enhancing the operational resilience of financial institutions and critical third-party service providers in the European Union. It sets out requirements for governance, risk management, incident reporting, digital operational resilience testing, and information and communications technology (ICT) risk management.
Under DORA, financial institutions will be required to implement robust operational resilience strategies, including identifying their critical functions, setting tolerance levels for disruptions, conducting resilience testing, and establishing effective third-party risk management practices. Compliance with DORA will mandate organizations to invest in resilient IT systems, data security measures, and business continuity planning to ensure they can withstand and recover from cyber threats, IT outages, and other operational disruptions.
Beyond the financial sector, regulatory bodies across various industries are increasingly focused on operational resilience as a means to safeguard critical infrastructure, protect consumer interests, and maintain societal stability. Compliance with these regulations often necessitates organizations to adopt risk-based approaches, implement robust governance frameworks, and foster a culture of resilience throughout their operations.
Failure to comply with operational resilience regulations can result in severe consequences, including financial penalties, reputational damage, and potential disruptions to business operations.
Operational Resilience Framework
Many organizations adopt operational resilience frameworks or standards to guide their resilience efforts. These frameworks provide a structured approach to enhancing operational resilience, covering areas such as governance, risk management, business continuity planning, incident response, and third-party risk management.
Examples of operational resilience frameworks include the NIST Cybersecurity Framework, the ISO 22301 standard for Business Continuity Management Systems, and industry-specific frameworks like the Operational Resilience Framework for the Banking Sector developed by the Bank of England.
Operational Resilience vs Business Continuity
These two terms often get mixed up, and while they’re related, they aren’t exactly the same. Operational resilience involves building an organization-wide culture of resilience, embedding resilience into every aspect of operations, and adopting a proactive approach to anticipating and responding to disruptions. It takes a holistic view, aiming to enhance an organization’s ability to adapt, evolve, and even thrive in the face of adverse events.
Business continuity is more specific. It double clicks on ensuring the continuity of critical functions during disruptions and minimizing downtime, or periods when essential business operations, systems, or services are unavailable or disrupted.
Prolonged downtime can have severe consequences for organizations, including financial losses, reputational damage, and a competitive disadvantage. It can lead to missed deadlines, delayed product or service delivery, and potential regulatory penalties or legal liabilities. In today’s fast-paced business environment, where customers expect real-time responsiveness, even brief periods of downtime can significantly impact customer satisfaction and loyalty.
To minimize downtime, organizations must implement robust business continuity strategies, including redundant systems, failover mechanisms, data backup and recovery solutions, as well as comprehensive incident response plans. Regular testing, maintenance, and updates of these systems are crucial to ensure their effectiveness during actual disruptions. Additionally, investing in resilient infrastructure, such as cloud computing and virtualization technologies, can provide greater flexibility to maintain operations during disruptions.
How Teridion Helps Businesses Improve Operational Resilience
Just like electricity, network resilience has become a critical component of operational resilience for businesses. Disruptions to network connectivity can severely impact operations, leading to downtime, lost productivity, and financial losses. To address this challenge, Teridion offers innovative connectivity solutions for enhancing network resilience that are both powerful and easy to deploy.
Teridion’s innovative approach to network resilience leverages intelligent routing algorithms, software-defined networking, and a global network backbone that connects 25 public cloud providers across 500+ points of presence. By monitoring network conditions in real-time and dynamically routing traffic over the optimal paths, Teridion ensures high-performance and reliable connectivity, even in the face of network disruptions or congestion.
Teridion’s solutions are particularly valuable for businesses with distributed operations, remote workforces, those relying on hybrid and multi-cloud strategies, and those experiencing network disruptions for network connectivity in and out of China.
For example, Accucam, a components supplier with clients that include John Deere and Volvo was facing connectivity challenges between its China-based manufacturing plant and its global offices due to China’s Great Firewall. Teridion’s China connectivity solution provided a high-performance, compliant connection, by replacing traditional routing protocols and resulting in a reliable, stable, and fast IPsec-based international internet connection between the manufacturing facility in China and the headquarters in Canada. Additionally, Teridion created a direct connection between the China plant and the Azure cloud in Canada to provide high-speed support and access to Microsoft 365, Active Directory, and Epicor ERP services. The new connectivity tunnels enabled Accucam to create the necessary network performance for supporting its operational resilience.
Continuously Improve and Adapt
Operational resilience is not a one-and-done effort. It requires continuous hard work to improve and adapt over time. New threats and challenges will always be emerging so organizations must regularly re-evaluate their risks, plans, and strategies. Being proactive about addressing new vulnerabilities is essential.
At its core, true operational resilience depends on being agile and flexible when facing the unexpected. Rigid processes and structures make it difficult to respond effectively to unforeseen challenges. Embracing change, enabling teams to pivot nimbly, and promoting cross-functional collaboration enhances an organization’s resilience abilities. The most resilient organizations view disruptions not as roadblocks but as opportunities to innovate, refine their approach, and emerge stronger – future-proofing against challenges that will inevitably arise.
