BCM and ERM: Separate but Complementary Disciplines

Written by John O'Dwyer
Find me on:

enterprise-risk-mgt-182752531_600x

Enterprise risk management helps organizations identify, assess, and remedy risks to business objectives.

Business continuity management (BCM) and enterprise risk management (ERM) are complementary processes that help prepare and protect enterprises from threats. In addition, when used in concert, the processes help ensure that resilient organizations recover faster and learn from incidents to improve future responses. 

How should leaders distinguish between the two disciplines? Below are some insights that provide perspective on BCM and ERM, separate but complementary disciplines.

The shorthand difference between the two is that ERM focuses at a high level on the identification, assessment, and prevention of risks. In addition, ERM provides for resilient organizations a chance to see risks as either threats or opportunities.

BCM, in contrast, is focused on the tactical needs of an organization to respond to an incident and ensure continuity of business operations, focusing on minimizing downtime, data and system loss, and the resultant threats to an enterprise’s ability to remain in business.

Enterprise Risk Management Focus

ERM involves multiple steps taken by organizational leadership. The entity, through its management and personnel, needs to identify potential events that are a threat to the organization. The risks then need to be evaluated based on their likelihood, which is measured against the enterprise’s collective risk appetite.

Once those risks are identified and ranked, the organization must develop responses to each risk, price those risks, and determine which responses must be deployed first. Multiple options for responses may be identified, assessed, and priced before a decision is agreed upon.

After implementation, the organization must monitor, measure, treat, and review those risks continually.

Business Continuity Management Focus

Part of the risk assessment and response may involve the development of a business continuity plan for certain threats, such as cyberattacks or natural disasters. Like ERM, BCM looks at identifying those risks but instead focuses on the impact of each threat to ongoing operations.

A BCM plan will ensure that there are sound responses that have been planned, developed, and tested. When an incident occurs, those plans are enacted, allowing the organization to mobilize people, systems, backups, contingencies, and remedies. The planning is designed to ensure that responses are effective and that the threats to brands, stakeholders, customers, and reputation are minimized. 

A BCM needs to incorporate myriad disciplines, including communication (to employees, stakeholders, and customers), logistics, and security. It is the discipline that accounts for scenarios where staff may not be able to access physical locations, data access may be disrupted, or communications are difficult.

busiiness-continuity-plan--117651611_600x

Business continuity management helps ensure that organizations can continue to operate during and after incidents that disrupt normal operations.

Overlap and Challenges

For less mature organizations, ERM and BCM may be at odds, with advocates for both vying for leadership attention and limited resources. When the efforts are not coordinated, work may be duplicated and conclusions may be reached that are contradictory. The resultant inefficiencies can have adverse effects on the outcomes of both processes.

However interrelated, the two processes are focused on different outcomes. ERM helps organizations ensure that identified business objectives are met. BCM helps make sure that business operations are maintained.

At Continuity Logic, our integrated risk management software helps companies prepare holistic enterprise risk management plans that incorporate best practices of business continuity management. Our platform ensures that work, decisions, and outcomes are integrated, coordinated, and in sync. Book a demo to learn more about how Continuity Logic can help your enterprise organization with the planning necessary for success at the strategic and operational levels.