Crisis management

Contingency management

Major incident management: what’s into it? In industry, those in charge of disaster management andemergency response are now constantly working to minimizethe damage that is inevitably caused by the COVID-19 virus.Moreover, they try to re-establish normal conditions as fast aspossible. In corridor chat, there is primarily talk of "businesscontinuity management". This is however not the same ascrisis management, contingency management, emergencymanagement, or disaster recovery management. You couldclassify each of these aspects under a "major incidentmanagement".

Crisis management is all about gaining insight into how we canreact to an undesired event at this moment in time. It is aboutcommunication and monitoring within (and outside of) theorganization. The main purpose is to absorb the main impactand negative consequences of an undesired event beforeit occurred. Measures taken are mainly preventive.

Contingency management on the other hand provides a back-up strategy. In case critical elements no longer function,alternative strategies to guarantee the company survival areproposed here.

In the light of the COVID-19 virus, organizations are affected by a deluge of problems. According to research by the Dutchbank ING, the sectors of transport, catering and industry will be hit the hardest. Bilfinger Tebodin has also noticed thatvarious industrial sectors are pressurized, which can lead to possible reduction of production. Furthermore, there areinsufficient resources available to maintain continuity of work activities in organizations. Matters such as emergency planning, business continuity, crisis management, disaster recovery and emergency response shall notonly be carried out by the authorities. Organizations that are vulnerable to this crisis shall also scale up on these aspects in order toprotect (financial) business interests and guarantee survival of the organization in these tough times.

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Emergency management

Disaster recovery management

Business continuity management

Emergency management is about the actual response to anundesirable situation. The event already occurred andmitigation of consequences is the only thing left to do.

Disaster recovery management indicates how to achievenormal functioning as soon as possible. At this stage, it iscrucial to limit business downtime. You need to haveimmediate actions that are necessary both during and after amajor incident to ensure that the business is able to function.

Unlike disaster recovery, business continuity managementfocuses on the medium and longer term. It is a strategic impactplan. It focuses on restoring key business processes to ensurethe survival of the organization.

In industry, those in charge of disastermanagement and emergency

response are now constantly working tominimize the damage that is inevitably

caused by the COVID-19 virus.

3 perspectives to a robust organization during tough times In order to provide a solid response to a crisis, it is necessary that the various dimensions of a major incident managementwork together. Some aspects will overlap in time and others will follow in time. In this way, a robust organization is createdthat is able to survive.

Star: Occurrence of an undesired eventBlack line: The line to successful survival of the crisisRed curve: Emergency ManagementBlue curve: Crisis ManagementGreen curve: Business Recovery Plan, Contingency Management,Disaster Recovery Management

Model made by the University of Antwerp (MSc safety sciences)

Consequences of poor major incidentmanagement Business downtime causes significant financial and humanconsequences like a loss of market power, employment orreputation. In other words, a business operation is not onlyabout short-term finance and marketing, but also aboutwhether the board of directors is able to safeguard thecompany in the long run. This approach must beembedded throughout all layers of the organization. The studies have shown that 43% of the organizationsaffected by major disasters go out of businesspermanently. In addition, 30% of the organizations had toclose down within 2 years after a major disaster. A well-functioning major incident management is of a greatimportance in order to prevent financial of reputationalbankruptcy and, thus, permanentclosure of organizations. After all, the main goal is to be"up and running" again after a difficult situation within alimited amount of time. Since major incident management is linked to majorfinancial impact, it is obvious that insurance companieswant to see proof of a business continuity managementstrategy. The insurance fee is correlating with the risk ofinterruption or loss of key personnel. If companies are ableto convince the insurer of an effective strategy, this canultimately be rewarded with a reduction in the

insurance fee. In addition, there is an issue of legalprosecution for companies that have failed to respondadequately especially in case of potential hazardousimpact on employees and surroundings.

Reveal the potential loss and manage theconsequence smartly It is important that an organization makes the potentiallosses visible. In this way, it is possible for topmanagement to make a rational decision about the chosenstrategy and thus response to a crisis. Organizations canpresent the elements of time, business value, hypotheticalcontinuation of the business during an interruption,deviation and causes in a line diagram. In this way, thepotential loss becomes clear and this can be translated toa financial impact for the organization. In order to minimize losses, two important elements areinvolved:1. Minimum business continuity objective2. Maximum tolerable period of disruption In these elements, decisions are made what the minimumlevel of production is required to afford continuity and howlong an organization can tolerate production interruption. In general, major incident management is all about riskanalysis. After all, it includes the possible scenarios andthe impact of their consequences. It is crucial to focus onthe impact of consequences and not so much on theunderlying causes, since infinite causes can lead to oneundesired event.

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If companies are able to convince theinsurer of an effective strategy, thiscan ultimately be rewarded with a

reduction in the insurance fee.

It is important that an organizationmakes the potential losses visible.

COVID-19 crisis, Bilfinger Tebodin enables organizations tocontinue with their (project) safety workshops (e.g. HAZOPstudies). How we did this? Over the past few weeks, ourprocess safety consultants have successfully executedremote safety studies. By using video boardrooms andapplying our developed golden rules for online meetings, weare able to facilitate safety studies all over the globe, frominternational video calls for multinationals to local productionfacilities. We are Bilfinger Tebodin and we make ideas work, even indifficult times. With our entrepreneurial spirit, we can supportand assist our industrial partners in such a way that financial,reputational and operational losses are kept to a minimumand to return stronger together when the crisis is over. Weprepare our clients for the next one.

Written by Rick Snippe, Technical consultant at Bilfinger TebodinLinkedIn • rick.snippe@bilfinger.com • Mobile +31 652 80 32 69 Rick Snippe is a technical consultant at Bilfinger Tebodin, having extensive experience in (offshore) oil & gas, renewableenergy and (petro) chemicals sectors. He holds an academic degree in safety sciences from the University of Antwerp andmoreover he has legal knowledge in the oil, gas and renewable energy industries.As a professional, Rick is driven with ambition to improve the technical integrity of process installations and to think alongwith clients on strategically complex matters in order to obtain a maximum result from a production company.

Why should I consider major incidentmanagement at this moment of time? With the current COVID-19 crisis, most companieshave minimized personnel and visitor access on site toprotect production. However, what is the businessimpact if personnel is not allowed anymore to leavetheir houses (full lockdown) or that majority ofoperational staff becomes ill? Moreover, what if supplyalso goes into a lockdown? What is the best strategythen? Being late with major incident management ispossible, however a company is never too latebecause new challenges will come up in the future;thinking ahead of different types of crisis, will makesure that companies are prepared and are able toendure.

Identification and prioritization of risks and threats; Classifying business impacts (e.g. critical, revenue-generating tasks and functions);Assisting in the development of strategies where priority is given to 1) sustainability; 2) long-term,tactical and operational units; 3) recovery teamswhose goal is to protect the assets;Scenario-thinking and supporting strategic decisionsis the core business of our consultants. Simulation ofmajor incidents to stress test the crisis-readiness ofan organization.

Expertise of Bilfinger Tebodin At Bilfinger Tebodin, we have the expertise to supportan organization to implement and/or optimize a majorincident management. This includes, but is not limitedto:

Together with our clients, we, at Bilfinger Tebodin, haveshown our resilience in last weeks. In the case of the

Together with our clients, we, atBilfinger Tebodin, have shown our

resilience in last weeks.

If you are interested in a no-obligation talk, please do not hesitate to contact our consultants, we are always there for you. Click here to read the Bilfinger Tebodin notice to clients on coronavirus situation.

BILFINGER TEBODIN www.tebodin.bilfinger.com • info.tebodin.bv@bilfinger.com