Loss of property, data and reputation are the risks most often associated with man-made and natural disasters. Spikes in employee absenteeism and the resulting disruption of most, if not all, business operations are rarely anticipated. They should be. All disasters impact people—but perhaps none carry the disruptive potential of a global pandemic.

In the 20^th century, three flu pandemics spread around the world. Experts tell us the next one may be on the horizon: the avian flu.

To date, the majority of infections have remained in the animal kingdom. However, there is increasing evidence that the virus is getting closer to "making the jump" to humans, in places like Cambodia, Vietnam and China. The World Health Organization, Centers for Disease Control and Prevention and the U.S. Department of Homeland Security are on alert.

What if the avian flu virus mutates and becomes more readily transmitted to humans? Infection will spread quickly. People will likely be unable and unwilling to come to work, and commerce may be disrupted worldwide. The estimated cost of a pandemic is projected to be 0.8 percent to 12 percent of economic output worldwide—up to US$4.4 trillion.¹

In the wake of tragedies like September 11 and the numerous natural disasters around the globe, business continuity planning became a higher priority for many organizations. Contingency plans were put in place, the majority of which failed to consider the human capital aspect of business recovery. Only 34 percent of companies that participated in a recent survey conducted by the Society for Human Resource Management (SHRM) indicated that human resource issues formed a significant part of their organization's business continuity or disaster plans. Only 36 percent of organizations indicated that these issues were somewhat part of their plans.²

To highlight the importance of human capital resiliency, we assembled a team of IBM professionals to create a hypothetical scenario. The subject of our what-if-the-avian-flu-hits scenario is Fictitious National Bank (FNB). The Chicago-based banking company has $100 billion in assets, 28,000 employees and 1,400 branches in 11 states. FNB, for this what if scenario, made the smart move. They worked with the consultants in IBM's Business Continuity and Resiliency Services unit to put together a human capital resiliency plan before the pandemic hit. This hypothetical scenario spotlights the issues the bank faced and how FNB's plan would have been put in place and rolled out to help mitigate their losses and get their business back up and running.

Our fictional story begins in Japan when a mutated form of the avian flu virus makes the jump to humans. Within a few weeks of the first reported death there, infections and deaths are reported in virtually every country.

Governments, in our scenario, start restricting travel and curtailing trade, and in the United States, the Midwest states are placed under partial quarantine. Schools have closed. Transportation systems are disrupted, and power supplies at risk.

The implications for Chicago-based FNB are far-reaching and immediate. Employee absenteeism spikes to 40 percent, with the average sick leave running at three weeks.³ A majority of branch managers are unable, or unwilling, to report to work, and the bank's back office is running on a skeleton crew. Branches in cities with high rates of infection, including Detroit and Milwaukee, have closed their doors, and FNB vendors and strategic partners, in this what if scenario, don't have the staff to meet demand.

"The big issue for this fictional FNB during a pandemic," says Brent Woodworth, Worldwide Segment Manager with the IBM Crisis Response Team, "would be how to safeguard its employees while maintaining operations and servicing customers. Communicating, decision-making and transaction processing are key. How can the bank meet its customers’ basic needs? Customers will need access to cash; they'll need to pay bills and know their funds and privacy are protected. If the bank can't deliver on that, its brand is going to suffer long-term damage."

In our scenario, FNB has learned from harsh experience the value of preparation. Several of the bank's branches were hit by Hurricane Katrina, and based on the bottom-line impact of that storm, FNB's Chief Risk Officer was able to project losses from a pandemic. These projections led the bank to call IBM Business Continuity and Resiliency Services. Below, the IBM team outlines the hypothetical steps they would have suggested FNB take to determine its level of preparedness for a worst-case pandemic outbreak and what to do to better prepare for such a scenario.

"We would have suggested that FNB engage us to perform our Contingency Planning Assessment for Enterprises service," says Russ Lindburg, Global Offering Executive, Business Continuity and Resiliency Services. "The service is based on industry practices, standards and guidelines. It also leverages the IBM Crisis Response Team's experience in human capital and disaster recovery."

The first step of the service would involve IBM consultants interviewing key FNB personnel. The goal: to gain insight into the bank's processes and procedures and what it would take to help keep the bank's critical business operations up and running with a deep reduction in workforce. The interview would quickly turn a critical eye to the human resource dimension.

"I would ask the bank to identify their top five business functions and what they would do if those functions were shut down because they didn't have enough employees to keep them up and running," says Rich Cocchiara, Distinguished Engineer and Chief Technology Officer for Business Continuity and Resiliency Services "Then we would have started talking about succession plans for all their people, a skills database and online training tools to support people who may need to step into new roles."

Visits to the bank's facilities to review its emergency communications plan and mobile workforce strategy would follow. The IBM team also would take stock of FNB's infrastructure and IT systems. "Both are central to how people work now and will work during a pandemic outbreak," adds Cocchiara. "An office building is supplied with power and water. What if they aren’t available?"

"When we look at IT, we would try to get a full picture of the bank's emergency capabilities. Could they communicate with their people and other bank locations? Could they work virtually? Would customers have access to ATMs, cash and online banking? Would their IT systems be able to handle the extra electronic transactions traffic?" concludes Cocchiara.

In the end, IBM would produce a report that summarized its findings regarding the analysis and assessment of FNB's current level of pandemic preparedness. The report would also highlight potential vulnerabilities, as well as recommended steps to be taken by FNB to improve its readiness and mitigate risks.

Given FNB's experience with Hurricane Katrina, it is likely that the bank's systems and infrastructure preparations would score well. But, like many organizations, it might well have under-prepared in the area of personnel, introducing significant risk to the bank's ability to keep operating.

The IBM analysis could fill in other gaps as well. For instance, it could help outline an emergency communication plan. In addition, it could help the bank to establish a virtual work environment.

"IBM would work with FNB to identify their critical applications, as well as the people and skills they needed to maintain those operations," says Eric Lesser, IBM Global Business Services, Institute for Business Value, Human Capital Management Leader. "The bank would also need a skills database and named replacements for key personnel. Online crisis training programs hosted on the bank’s intranet would need to be developed."

At the outset of our what if pandemic outbreak, FNB would be ready to help its employees deal with the crisis—on both personal and professional levels.

To help ensure its employees had access to information and support, the bank would have deployed preordained staff to emergency help desks. It also would have partnered with emergency medical, counseling, housing and childcare resources.

All FNB's employees would have emergency phone numbers and instructions on how to report to work in the event of a disaster.

Virtual work arrangements would help shield employees from infection and help the bank remain operational. This would be made possible through an IBM upgrade to the bank's virtual working capabilities, including remote access and support, online tools and collaborative workspaces that would mirror normal day-to-day operations.

"Communications plans include blogs, Web sites where people can work effectively, places where employees could get information on the status of the business and the crisis, and information on how to stay healthy or get emergency medical care," says Lesser.

FNB's ability to serve its customers and employees, should a pandemic have actually hit, would have hinged, in large part, on its ability to keep communications channels functioning at a high level.

"Information, in a time of crisis, can be just as important as food, water, shelter and medicine," says Brent Woodworth. "If you can't call for help, you can't get help. Without proper and up-to-date information, businesses cannot work virtually and can't make accurate and timely life- and business-saving decisions."

In the event of a pandemic, telephone and cell phone service are likely to experience periods of unreliability, due to system overloads. But for a company like FNB, there are solutions, including Virtual Satellite Systems.

"If FNB needed to communicate over a wide geography, WiMAX technologies we’ve developed in Indonesia and Louisiana would be an ideal solution," says Woodworth. "We could create hot spots and make a communications bubble 100 miles long by 20 miles wide. We could also pack the technology to run that network into a 50-lb. briefcase-sized package."

For security-enhanced e-mail communications, IBM would equip key bank personnel with Blackberry™ devices, while also helping the bank safeguard its e-mail servers. "Blackberry devices support the social distancing that is so critical in a pandemic," stresses Woodworth. "They also offer tremendous portability, and the network is fairly robust. Each device has a unique digital address. Even if FNB's primary network went down, employees would be able to log on, access corporate information and work remotely."

Many of these contingency actions sound simple and logical. And indeed they are. But they share one important characteristic: in the event of an avian flu outbreak or similar crisis, they cannot be executed unless they have been outlined and communicated in advance.

IBM's Contingency Planning Assessment service is designed to help you do this.

CIOs and other business leaders know that it's rarely business as usual after a disaster. The effort your organization makes now to protect your human capital resiliency in the event of a crisis will go a long way in helping it—and your people—recover after the worst is over. This white paper, designed to help you begin to assess how well your organization is currently prepared to handle the human dimensions of a disaster, can help you gain valuable insight into ways to prepare your company for the next natural or manmade disaster.

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