Compliance

Rains, Floods and Storms: Minimizing Geo-Political Risk Implications

Avatar Written by Lakshmi Nair

Infrastructure is a key factor to consider while selecting a new destination for outsourcing, offshoring or setting up a global in-house center. Reliable roads, well maintained buildings and continued access to power supply is a fundamental requirement in ensuring smooth operations. However, every location has its set of seasonal weather difficulties that affect the location’s infrastructural merit. Geo-political disturbances like floods and typhoons tend to disrupt the location’s access to even the most basic necessities.

For example, over the past month India’s southern states have been ravaged by incessant rain leading to floods and intensive damage to infrastructure and property. Some of the worst hit Indian cities are Bangalore, Chennai, Hyderabad and Trivandrum. These cities are famous for housing hundreds of thousands of big IT players in the market for decades now, proving their worth as successful outsourcing locations. The rains brought in impending doom to these cities when the relentless rain caused floods, cutting off power supply. The worst hit among these cities was Chennai. Residents and businesses in the city came to a sudden halt after excess water in reservoirs was released to prevent flooding and suburban parts of the city began going underwater. Death toll crossed 100, within a week. The unprecedented rain in these cities brought life to stand still and paralyzed operations.

In India’s IT centers, citizens and businesses face four or more hours of outages every day – marking the country’s worst flood and power crisis in years. But rains not only bring power cuts, they bring in severe volatility for the people with a possible disease outbreak. People are at a high risk of catching waterborne diseases such as diarrhea, cholera, typhoid and malaria. The situation isn’t expected to get any better until the rain subsides, and the current state of affairs will continue through the coming weeks.

While events such as these Indian storms can happen at any time, most often there are seasonal trends that companies can monitor and plan for within their risk management programs. Take some proactive measures to minimize losses and maintain productivity, including:

  1. As part of ongoing monitoring and risk management: Have a plan for monitoring local natural disaster events and an action plan for how to address the most likely events. This includes appointing a specific person to be responsible for monitoring official communications channels and ensuring that information is appropriately communicated to affected teams.
  2. Minimize the risk as the event occurs: With a well-thought-out disaster preparedness plan, make sure everyone in the organization knows how to handle natural disasters. This can be as simple as letting employees know when they can work from home and how to reach others in the teams during times of significant weather events. It can also be more strategic such as how to notice symptoms of various highly contagious diseases in order to avoid spreading those diseases further.
  3. Debrief after events to plan for future ones: No matter how well prepared a company is, there are often lessons learned after major geo-political events. For example, it might become obvious that the company lacks sufficient backup power, and the company will want to evaluate whether it needs to invest in its own power generation or to insist that suppliers do the same.

A successful global company will have an efficient Disaster Recovery, Business Continuity Planning (BCP) procedures and a comprehensive risk management program in place that will ensure smooth flow of operations and eliminate down time.