It is important that you think critically about those types of disruptions that are (or possibly will be) contributing to your business interruption. In other words, which of the below-listed problems are impacting (or will impact) your ability to produce pre-disaster levels of goods and services? Suggested starting values are provided, which may or may not accurately represent the situation your organization is facing or will face. Please adjust the percentages by selecting the plus and minus buttons for each source of disruption, ensuring that the total of all the sources accounts for 100 percent of your organization’s business interruption.
Maintaining intended production or service levels using lower amounts of an input or inputs (e.g., achieving the same level of production using less water, electricity or workers, without substituting other inputs for them).
Modifying a portion of your business operations to run without a critical input (e.g., following the disaster an office building could still be operational without water). This can include the isolation existing before the disaster or your extra effort to isolate it post-event.
Replacing a production input in short supply with another (e.g., replacing electricity by natural gas, water provided by pipeline with bottled or trucked water, whole milk with powdered milk, employees for tasks previously performed by machinery).
Continuing business operations even when a critical input is in short supply by using emergency stockpiles and ordinary working supplies of production inputs (e.g., water tanks, canned goods, stockpiled materials in general).
Using a plant or equipment that was idle before the disaster in place of damaged counterparts (e.g., bring on-line physical assets not previously in use; such assets might include computers, equipment, vehicles, and vacant buildings).
Moving some or all of the business activity to a new location (either temporary or permanent), including shifting data from onsite to “cloud” storage.
Improving the efficiency of your business in the aftermath of the disaster (e.g., allowing for flexibility in business operations/procedures to minimize red tape during recovery, offering flexible working hours, minimizing reporting requirements or monitoring to facilitate more efficient or responsive operations).
Importing some of your needed production inputs when you cannot obtain them from your usual local or regional suppliers, including new contractual arrangements (e.g., buying your materials or supplies from other regions or countries).
Improvising all or part of your production process without requiring a major investment expenditure (e.g., replacing two food preparation kitchens with one, replacing your paper accounting system with an automated one).
Making up for lost production by working overtime or extra shifts. This must involve actual production and not include the selling of goods and services that were previously produced but could not be sold because of a slump in demand (e.g., adding an additional shift for employees or having them work additional overtime hours).
Hastening recovery through bargaining (e.g., renegotiating supply contracts with key suppliers), selective exchange of certain resources (e.g., short-term agreements for a defined period of time with other organizations,), creating new partnerships (e.g., building relationships with other businesses to share information and/or expertise), and resource pooling (e.g., joint ventures in order to bid for public contracts).
For most firms, implementing a tactic incurs a cost. However, in some rare cases implementing a tactic can result in a savings (in addition to reduction of losses by using the tactic). Some examples include conserving a scarce resource or relocating to a new facility with a lower lease payment. Check “Save” if this tactic will be a savings to implement.
Our calculator uses data from real businesses in actual disasters to predict cost savings for your business. BCR means benefit cost ratio. We use the median BCR (green number) for our recommendations.
For each of the three tactics you chose, you will see three numbers: predicted benefit-cost ratio (BCR), sector median BCR, and best performers BCR (75th percentile).
The y-axis of the graph is the percentage of firms achieving each level of BCR.
If you click anywhere along the y-axis, you can see the BCR for that percentile.
The graph shows a distribution of all firms surveyed.
The Business Resilience Calculator (BRC) is a decision support tool a business can use to evaluate its capability to respond to disasters. It also provides guidance on improving that capability. The BRC can help safeguard business continuity. It is designed with individual businesses in mind, as well as public and non-profit sector agencies tasked with providing support and assistance in building disaster resilience in the business community.
The BRC focuses on various resilience tactics, or ways a firm can maintain a high level of business function during and after a disaster. Resilience is a popular buzzword, but the concept is linked directly to a business’s ability to produce goods and services. Unlike other resilience decision support tools, the BRC is not a simulation tool. It is built upon the actual experiences of firms like yours who have been through a disaster and experienced business interruption. Resilience helps to ensure that a firm can continue to produce its goods and/or services in the most cost-effective manner possible.
The focus of broader definitions of resilience is on mitigation, primarily reducing property damage. However, this typically ignores the fact that economic losses continue after physical damage occurs. Your business can be stifled by a disruption to one of its utility lifelines, by employees being unable to travel to work, or by disruption(s) of critical inputs like infrastructure services.
Each disruption your business faces in a disaster causes some degree of business interruption (BI). These BI losses lead to declines in sales revenue and profits. It is important to note that BI losses begin when the disaster strikes, and continue until your business has recovered.
For some recent major catastrophes, BI losses have rivaled or exceeded property damage. For example, BI losses were four times the value of the World Trade Center in just the first year after 9/11. In the case of Hurricane Katrina, BI losses eventually exceeded property damage due to the protracted recovery.
It is important to keep in mind that resilience is a process. Your business can adeptly improve its resilience capacity before the disaster strikes so that when the disaster does strike, you can implement the most cost-effective actions or tactics possible. The BRC is designed to support businesses by providing detailed statistical information about the resilience of other businesses like yours that have been through disasters. By learning about what has been effective and cost-effective for other firms like yours, your business can develop a well-informed plan for improving resilience capacity.
The actions, or tactics, included in the BRC are based on well-established classes of actions used by both the private and public sectors. These tactics are the same well-established categories of tactics that businesses have used successfully and that research at leading universities and research centers have verified, in both individual business and supply-chain resilience domains.
There are many things your business can do to maintain function while undertaking repair and reconstruction or waiting for the supply of workers, goods, and services to be restored. These resilience tactics include isolating various aspects of your business from disruption by reducing their dependence on various networks, stockpiling critical materials or finding substitutes for them, identifying back-up suppliers, relocating economic activity, and rescheduling production among others.
The BRC begins with a straightforward resilience metric: losses prevented as a proportion of losses likely to occur if a given resilience tactic had not been implemented. Or, put more technically, avoided losses divided by maximum potential losses. For example, a major study found that 72% of BI losses following the 2001 World Trade Center attacks were prevented by the rapid relocation of businesses and government agencies to elsewhere in the New York Metro Area. Because the resilience metric is a proportion, it is easily interpreted as a percentage. This allows it to be readily comparable across tactics and firms. This metric is called the resilience metric, or RM for short.
The RM represents the benefits (in terms of avoided losses) of implementing a given tactic. When combined with the cost of implementation, the BRC provides benefit-cost ratios (or BCRs). Many businesses are familiar with benefit-cost analysis—the BCR is the key measure used in these analyses. For example, one resilience tactic may have the potential to reduce your BI losses by 50%, but, even if it is 10 times more expensive than a second tactic that can only reduce your BI losses by 20%, the second is still four times more cost-effective than the first.
The BRC’s main resilience cost and effectiveness metrics are based upon these two metrics—the resilience metric (RM) and the benefit-cost ratio (BCR).
The strength of the BRC is built upon its fundamentally-distinct approach to resilience analysis. It provides its resilience metrics based on the experiences of actual businesses like yours. Other software packages on the market today are based on simulations of firms in computer-generated environments. The BRC takes a different approach. Its estimates are based upon actual reported resilience effectiveness, and cost of implementation, from firms like yours that have been through disasters.
It uses advanced statistical and econometric tools to analyze and evaluate that data, so that it can provide a deeper picture of the range, or distribution, of cost and effectiveness outcomes. In other words, it allows you to learn about your business’ resilience experience by looking beyond the simple average. By looking at the full distribution of each resilience metric, your business can learn not only from what others have done that has worked, but also from what others have done that has not been cost-effective.
The BRC is a decision support suite that contains two main modules.
Users begin by conducting a self-assessment of the types of disruptions (e.g., power outages, communications disruptions, supply chain problems) they have experienced, or for which they are seeking to build resilience capacity. Users are provided default values, but are encouraged to adjust those values based on their own unique business situation and operational environment. Then, based upon this self-assessment and other user-provided firmographic details (e.g., type of firm, number of employees), the BRC can identify the full range of resilience effectiveness and cost metrics appropriate to your business.
It is important to note that in some cases, businesses can implement resilience tactics at negative cost. Because of this reality, the BRC allows users to evaluate both cost-incurring and cost-saving resilience tactics. This is because, in some less-common situations, firms’ cost of implementing a given resilience tactic can be a net savings. Examples would be conservation tactics, allowing workers to tele-commute, or shifting production hours to evenings when electricity is less expensive under time-of-use pricing. It is therefore important that the user carefully consider implementation costs when conducting its own self-assessment.
In addition to providing a full statistical distribution to users for each metric, the BRC also provides useful summary measures. It provides a comparison for each metric to the sector in which the firm operates, as well as a comparison to firms who performed particularly well, called “best performers” or “best practice” firms. These are firms that achieved resilience metric outcomes for a given tactic at higher levels than 75 percent of firms like theirs. By comparing its own resilience score with best practice firms, a user can begin to decide on improvements to build further resilience capacity in the most cost-effective manner.
The BRC also provides you with links to helpful information that can help you build resilience capacity and improve your resilience scores. These include examples of previous successes, information on assistance from government and non-government organizations, insurance options, etc.
The BRC is based on 20 years of research defining and measuring business and economic resilience to disasters based on actual and simulated events, such as the September 11 terrorist attacks, the Northridge Earthquake, Superstorm Sandy, Hurricane Harvey, and simulated catastrophic threats such as floods, severe storms, and cyber-attacks. Research underlying the BRC has been thoroughly vetted through peer-reviewed academic literature and by various government agencies. This research has been supported by the US Department of Homeland Security directly and through its Critical Infrastructure Resilience Institute (CIRI) and its Center for Risk and Economic Analysis of Terrorism Events (CREATE), and by the National Science Foundation, National Center for the Middle Market, US Coast Guard, US Geological Survey, California Department of Transportation, and The Ohio State University Risk Institute.
The BRC is a valuable decision-support tool. It introduces you to a wide variety of resilience tactics, helps you measure your resilience capability and compare it to other businesses like yours. It also enables you to set targets for future improvements in resilience and provides you with help in doing so. The BRC can save you money and help you survive the next disaster.