14 May
2019

Assess Business Resilience in Terms of Value of Investment Rather Than Return


 

“Value of investment attempts to measure the multitude of intangible”

Businesspeople are comfortable talking about return on investment (ROI), but this may not be the right way to assess spend on business continuity and resilience programmes, says Karven Naidoo, Client Executive at ContinuitySA. He argues that looking at the total value of the investment (VOI) is a far better way of assessing the worth of an investment with many intangible benefits.

“To be sure, ROI discussions are useful when the amount invested can be linked to the amount the investment returns, but sometimes returns include intangibles that have huge worth that is hard to express in monetary terms,” he says. “Much marketing spend falls into this category, as do business continuity and resilience. The value a company gets from investing in business continuity and resilience far exceeds the cash it expands.”

The intangible value that can be obtained from business continuity and resilience is made up of many elements. One is the organisational and process knowledge that comes from the business impact analysis required by a business continuity management programme. How exactly do a company’s processes interact with each other, and what is their relative importance?

Many companies do not possess this knowledge at any granular level, and it can, in turn, lead to improved collaboration and planning at every level.

Of course, investing in business resilience strategies and capabilities puts the company on the right side of regulators and stakeholders. JSE regulations require business continuity plans to be implemented, but all companies are increasingly under pressure to be able to demonstrate they can recover quickly from a disaster and thus will not put the entire value chain in jeopardy.

Another significant value to be obtained is the avoidance of the damage to both brand and reputation inherent in a data hack or inability to trade. Finally, an investment in business continuity will mean the company has to undertake regular, in-depth risk assessments, something that greatly enhances all planning activities.

“Value of investment attempts to measure the multitude of intangible, hard-to-quantify benefits that flow from business continuity and resilience management. But one could also argue that it also includes an element of Return on investment because, ultimately, the cash value of business continuity must be equivalent to the value of the company itself, including the future income it could generate for shareholders,” Mr Naidoo concludes. “A resilient company is not sustainable, and so one could argue that an investment in business continuity is an investment in safeguarding the company’s future profits and brand.

 

Business Essentials is Africa’s premium networking and business directory.

Read more from our Pressroom:

____

Sectional Title Schemes Should Hurry to go ‘Green’

____

Yes, You can Dramatically Improve the Look of that Scar

____

TAX impact for EXPATS with proposed amendment to the Act in 2020


Related Articles:

The Art Of Raising a Reader!

By Read Educational Trust 0 comment(s)

Summer Festivals Are Made in Winter!

By Lichtenstein Castle 0 comment(s)

Marijuana, The Grateful Dead and the Constitutional Court: A Curious Intersect

By Cliffe Dekker Hofmeyr 0 comment(s)

Virgin Active Kicks Technology Expenditure into Touch With Apex BI

By APEX Business Intelligence 0 comment(s)

Leaders in Healthcare - AI, Technology and Digital Health

By Business Essentials 0 comment(s)