Operational Resilience Unveiled: The Integral Role of Business Continuity Planning in CPS 230

Robust operational resilience strategies are at the core of a successful, sustainable business. To support organisations to emerge stronger in the face of adversity, the Australian Prudential Regulatory Authority (APRA) has introduced CPS 230, a new operational risk management standard.

The aim of this standard is to support APRA regulated entities to become more resilient through robust risk management, internal controls, business continuity, and vendor risk management.

This blog will explore the profound significance of business continuity planning within the CPS 230 framework, uncovering its core, its components, and its transformative essence.

Understanding the Alignment: CPS 230 and Business Continuity Planning

In a world where disruption knows no borders, CPS 230 rises as more than a regulatory guide. It emerges as a blueprint for organisational resilience, guiding businesses to transcend the traditional recovery stance by promoting proactive strategies that empower entities to anticipate, mitigate, and flourish in the face of operational uncertainties. The relationship between CPS 230 and business continuity planning becomes vividly apparent in this blog, where we share hypothetical, yet highly probable examples that illustrate the way businesses can elevate resilience and propel growth.

In one of the most pertinent modern examples of business continuity, the COVID-19 pandemic saw organisations face unprecedented challenges. Those with robust business continuity plans were able to swiftly transition to remote work setups and maintain crucial operations. For instance, leading financial institutions who had a comprehensive BCM framework in place were able to seamlessly adapt to remote operations without compromising data security or customer service.

Business continuity planning, under the guidance of CPS 230, transcends its traditional role. It evolves into a proactive custodian, meticulously crafting strategies that ensure critical operations flow uninterrupted, even during an unexpected event or outage.

To give a high-level example and stress the importance that Business Continuity Planning (BCP) plays in enabling a business to stay operational, imagine a manufacturing company that encountered a supply chain disruption due to geopolitical tensions. With a CPS 230 aligned business continuity plan, they would have alternate suppliers pre-identified and contingency plans in place. This proactive approach minimises production downtime and prevents financial losses.

The essence of Business Continuity Planning and CPS230 can be categorised into two key areas. 

1. Proactive Readiness: Business continuity planning ensures proactive readiness, aligning with the essence of CPS 230. It’s not just about recovery; it’s about orchestrating strategies & contingency plans that safeguard the organisation’s core functions.

2. Holistic Risk Analysis: Business continuity planning commences with a comprehensive risk analysis, mirroring the CPS 230 ethos. Operational vulnerabilities are identified, and their potential impact is gauged. These vulnerabilities are then strategically prioritised, ensuring alignment with the organisation’s broader objectives.

Echoing the pragmatic approach of CPS 230, business continuity planning delves into scenario enactment. These are no mere theoretical exercises; they’re real-world simulations that test strategies in a volatile environment of potential disruptions.

The Key Pillars of CPS 230 – Aligned to Business Continuity Planning

1. End-to-End Process Mapping: Operational resilience, as envisioned by CPS 230, involves meticulous process mapping. Business continuity planning translates this vision into actionable steps, creating a panoramic view that unearths dependencies, crucial functions, and vulnerabilities.

Consider in this context a retail chain who may have experienced a cybersecurity breach that compromised customer data. Their business continuity plan would need to have a clear process map for handling such incidents. Their rapid response and effective communication strategy would also help them regain customer trust and minimise the reputational damage.

2. Strategic Response Frameworks & Seamless Communication: CPS 230 seeks harmony between operational elements and business continuity planning. It structures response frameworks for each discerned risk, ensuring that the communication channels remain unimpeded even amidst disruptions.

For this example, we chose to think about a global logistics company facing a major disruption due to a natural disaster that shut down key transportation routes. Their well-defined response framework, in alignment with CPS 230, includes clear communication protocols with customers and suppliers. As a result, they are able to reroute shipments and minimise delivery delays.

Cultural Transformation: Nurturing a Resilient Mindset

The relationship between CPS 230, business continuity planning, and operational resilience transcends compliance. It’s a transformational journey where compliance merges seamlessly with enduring organisational vitality.

More than a collection of strategies, business continuity planning cultivates a resilient culture. In business operations where uncertainties are a constant companion, a resilient mindset among business leaders has emerged as a strategic imperative; it’s an ethos that empowers leaders to navigate challenges with adaptability, innovation, and an unwavering commitment to organisational growth. Here are 5 ways business leaders can lay the foundation of a resilient culture and reap the benefits:

1. Embrace a Growth Mindset: Resilience flourishes in an environment where leaders view setbacks as opportunities for growth. Encouraging a growth mindset means fostering a culture where mistakes are seen as steppingstones toward improvement. Leaders set the tone by sharing their own failures and lessons learned, showcasing that setbacks are integral to the journey of advancement.
2. Prioritise Learning & Adaptation: Resilient leaders prioritise continuous learning and adaptation. They actively seek out new information, insights, and perspectives. This commitment to understanding broader operations and opinions allows them to make informed decisions – even in turbulent times – encouraging a culture of continuous learning which trickles down through the entire organisation.
3. Foster Open Communication: Transparent and honest communication is the bedrock of resilience. Leaders who openly acknowledge challenges, share their strategies, and actively listen to feedback create an environment where employees feel empowered to contribute ideas and solutions. Such an atmosphere fosters collective problem-solving and encourages proactive responses to disruptions.
4. Provide Resources and Support: Resilience isn’t forged in isolation. Leaders must provide their teams with the resources, training, and support needed to weather challenges. This includes equipping employees with the tools to enhance their skills, fostering an environment of psychological safety, and offering mentorship to nurture resilience.
5. Embrace Change as a Constant: Resilient leaders recognise that change is the only constant. They embrace change as an integral part of the business landscape and instil a sense of adaptability among their teams. This outlook enables organisations to remain agile in the face of disruption.

In Conclusion: Pioneering Operational Resilience

Operational resilience isn’t a destination; it’s a continuous evolution. Guided by CPS 230 and fuelled by the amalgamation of business continuity planning, this regulatory standard embodies a future where disruptions are met not with trepidation, but with unwavering confidence.

By combining the Australian Prudential Regulation Authority’s (APRA) CPS 230 framework, with a Business Continuity Management (BCM) solution, and a comprehensive risk management programme, organisations can enhance their response to operational risks and unexpected events & outages – fortifying their resilience. 

How Camms can help! 

The Camms platform can be easily configured to help organisations manage the requirements outlined by the new CPS 230 operational risk management standard.

The platform offers multiple capabilities that align with the requirements of the standard. These include:

Risk Management – Ensure resilience with a best-practice risk management programme. Establish a standardised risk framework, build risk registers, conduct risk assessments, set controls, KPIs, and KRI’s to monitor risk levels. Map risk to strategic objectives to take the right level of risk to achieve your goals.

Business Continuity Planning – Our recently enhanced Camms.Resilience module offers multiple capabilities. Build a business process register to understand your critical processes, conduct process review modelling to understand the impact when a process fails, conduct online business impact assessments, and create & execute business continuity plans.

Incident Management – Enables staff­ to report actual incidents and near misses via online forms that feed into a digital incident log. Conduct investigations, determine impact, and monitor cases until closed. Trigger your BCM plans based on incidents logged.

Strategic Planning – Plan and execute your strategy by breaking it down into smaller tasks, projects, and actions with clear deadlines & ownership to easily track progression. Link your strategy back to risk and organisational performance and manage strategic risk.

IT Risk Management – Don’t let cyber threats impact your business. Report IT & cyber incidents, monitor cyber risk, and create a digital asset management log to ensure your business remains operational.

Third-party Risk Management – Ensure your suppliers don’t let you down and tarnish your reputation. Manage vendor onboarding, risk assessments, contracts, performance, and SLA’s – to ensure your network of suppliers doesn’t negatively aff­ect your organisation.

To understand how the Camms CPS 230 compatible platform can support your organisation to operate in line with CPS 230 requirements and prepare for short-term shocks and long-term challenges, request a demo.