Planning for Power Outages: Why Business Continuity Matters More Than Ever

Nov 22, 2022

This article originally appeared in Finance Derivative

By Tom Cole, Managing Director - UK & Europe

Will the UK face power outages this winter? While mass blackouts are unlikely, they are not beyond the realms of possibility, with National Grid warning that homes and businesses across England, Scotland and Wales could see their power shut-off for three hours at a time. The potential power cuts have been laid out as a worst-case scenario by the energy group after assessing all possible outcomes. There is reportedly enough capacity to avoid temporary losses of power.

Even with the lights expected to stay on, companies with a clear and consistent business continuity plan (BCP) will be at a significant advantage. Why? Because the ability to withstand the unexpected not only minimises the impacts should the worst happen, but also makes strong business sense today. It demonstrates to investors, customers, and other stakeholders that their operational needs are being taken seriously and that the business is robust enough to overcome any incidents it may face. Furthermore, the watchful eye of the Financial Conduct Authority (FCA) is laser-focused on operational resilience, making it a requisite for firms to identify their important business services, set impact tolerances for the maximum tolerable disruption, and carry out mapping and testing to the necessary level of sophistication.

The unexpected and rapid onset of the pandemic threw the importance of a robust BCP into sharp relief, highlighting its role as a living, breathing, real-world program rather than just words on a page. Now, as we enter a challenging and uncertain winter period, it is time for companies to assess their business impact analysis (BIA) and BCP terms. This involves fully understanding the specific risks, evaluating the strength of current contingency plans, and optimising the resources available before and after an emergency.

The Costs of Downtime

An unexpected power outage could bring business operations to a fast and unceremonious halt. The economic effects of this downtime can be substantial. But the impact of each event often extends beyond the obvious: downtime hampers the productivity of almost everyone in a company, leading to lower morale, reputational damage, and lost business opportunities.

Today’s volatility of market conditions means that few companies in the alternative investment industry would be untouched by widespread power outages. This is particularly true for hedge funds trading very high volumes – even a short outage could have significant impacts.

Setting Out a Plan

Therefore, firms should have a business continuity plan that recognises infrastructure outages during organised blackouts. While the requirements will vary between companies, the key components of an effective BCP include a thorough business impact analysis, a review of existing processes, and the creation and implementation of clear continuity strategies.

For some businesses, this may involve turning BCPs of early 2020 on their head: outages are arguably more likely to happen in rural areas, so remote employees could be ordered back into central offices to mitigate the risks of disruption at home. In contrast, some London-based banks are reported to be considering reinstating plans to shift to offsite locations and home-working. And, of course, many businesses have already made the permanent shift to fully remote working, so they will need to consider other office-free contingency plans.

Weighing Up the Options

In a world of unknowns, firms need to understand their office power resiliency, assessing the effectiveness of their existing backup systems.

An uninterruptible power supply (UPS) remains a primary method to provide power resiliency. While this is only effective for a short-term outage, providing continuous power for an additional 20-30 minutes can buy a firm precious time to take quick action and put its BCP into motion.

Businesses should consider reviewing the size and technology of their UPS unit. A desktop UPS could make all the difference for key personnel to save their work and log off gracefully when the lights go out, but a more central UPS that is plumbed into the architecture of an office’s electrical systems will ensure a more stable power supply. However, not every business will be able to accommodate the size and weight of such a unit, so it is important to understand any potential limitations or obstructions should you go down the UPS route.

A much more effective way of ensuring medium-to-long-term office power resiliency is to pair a UPS with a generator. The role of the UPS is to maintain a power load for the immediate aftermath of an outage whilst the generator becomes available – a process that usually takes only a minute or two. As the Fort Knox of power resiliency, generators need to be in place for an office to be truly protected from blackouts.

Many purpose-built offices in the capital already have generators, but they are restricted to life-support functionalities such as elevators and emergency equipment. While this generally fails to cover office infrastructure, it is an opportunity that should be explored with a company’s office provider, as power generators can be a lifeline when the unexpected strikes.

Of course, not every office will have the space, time, or money for power generators. Ideally, power resiliency questions would have been asked as part of the office selection process, but it is never too late for businesses to engage with their provider and query what is currently in place. Even businesses with suboptimal power resilience can take steps to adequately prepare for outages. Laptop batteries typically run for 4-6 hours, so all companies should use this opportunity to test the worst-case scenario, working via battery and tethering to employees’ mobile phones. This exercise will help everybody familiarise themselves with the steps should an outage occur while also allowing the business to assess the speed and performance of their 4G or 5G networks.

Cloud Resiliency is Key

Cloud evolution cannot be ignored when it comes to full, scalable business resiliency. The widespread move away from on-premises computing and towards the cloud has left many companies in a much safer place and could prove to be a blessing should the UK experience blackouts this winter.

Cloud services reside behind a fortress of purpose-built, always available, and highly resilient data centres. These secure ecosystems hold an abundance of UPS and power generators, which are frequently tested to simulate a total power failure. Furthermore, they connect to various power grids, providing that extra layer of resilience and preparedness for the unexpected.

Should the worst happen, data centres have firm service-level agreements (SLAs) with fuel providers to keep their generators supplied and online for days rather than hours. This arrangement guarantees businesses in the cloud a level of business continuity that an in-office UPS cannot provide.

For companies yet to make a move to the cloud, now is a better time than ever to engage with an IT services provider for advanced, secure, and scalable access to cloud services. Supported by a robust and continually updated business continuity plan, businesses can safeguard and future-proof their operations today to meet the challenges of tomorrow.

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