Business Risks & IncidentsA business risk is a potential for loss and an incident is a loss that has occurred. For example, fire risk at a critical facility such as a data center that becomes a fire incident.
|Business Impact: Fire at Data Center|
Business Areas Affected
IT OperationsBusiness OperationsEcommerce Sales
Complete loss of all systems running out of data center.
Cost of Business Disruption
$1.7 million / hour
$0.3 million / hour
Fire insurance will not cover loss of data or intellectual property such as software.
Time to Recover
Failover to secondary facilities within 6 hours.
Long Term Impacts
Potential loss of data / backups Damage to reputationDamage to customer relationships / brand image due to outages.
DisastersDisasters such as an earthquake, environmental emergency or hurricane. For example, a small retailer than closes several shops for 2-4 weeks due to an earthquake. This example takes a people-first approach that notes that employees are safe before continuing to financial costs and losses.
|Business Impact: California Earthquake|
Due to the recent earthquake in the San Francisco area all of our shops and offices in the area will be closed until the emergency declared by the state and city are lifted. There will be restricted access to several corporate and retail locations for a period of time. Locations will require a clean-up and evaluation of stock to identify damaged items.
Health & Safety
All employees and their families confirmed safe.
Corporate HeadquartersSan Francisco Flagship4 San Francisco Retail Locations2 Oakland Locations
$690,000 / week
Estimated inventory damage of $34,000
$40,000 / week in clean up and recovery costs.
Corporate functions unaffected. Confirmed that key employees are safe and available to work from home.
Donation to relief efforts of $1 million.
Political DisruptionsDisruptions due to government actions or political events such as protests. For example, a small business owner who has to close their restaurant for 3 weeks due to protests that shutdown business in a neighborhood for an extended period of time.
|Business Impact: July Protests|
Restaurant closed July 3rd - July 25th on advice of police. All retail businesses in the area closed for a similar time period.
100% revenue loss for 22 daysExpired inventory costsCustomer defectionIncreased insurance expenseLoss of key employees
Business was slow to return as customers avoided the area after the protests. Year-over-year sales decline as follows:August -64%September -20%October -6%
Total Lost Revenue
Global DisruptionsGlobal disruptions such as wars, trade wars and political instability abroad. For example, a large European manufacturing firm with a global footprint that experiences supply chain disruptions due to political instability in an Asian country.
|Business Impact: Supply Chain Disruption|
Anticipated 15-20 delay shipping parts and components out of ______ and ______ due to political instability in the region.
15 day shutdown of battery systems manufacturing in Frankfurt10 day shutdown of vehicle manufacturing in Manchester
Battery systems production for the year will miss target of 13 million units. Projected production is on the order of 11 million units representing a shortfall of 2 million units.Vehicle production is scheduled to meet targets with extra production runs scheduled in September through November.
Negative impact of $78 million (estimate)
Costs for shutting down and restarting lines of $16 million.Contractual penalties of $4 million.
Estimated 13,000 retail orders of vehicles will be delayed 1-3 months.Delay to power systems orders will impact 17 business customers.