Most companies have business continuity plans in place designed to deal with disaster after it occurs. But how much effort goes into the "pre-disaster" phase of identifying and evaluating risks?

Not enough, says PricewaterhouseCoopers.

In a tracking study of performance at fast-growing US companies, PWC found that though the majority favour having a risk assessment programme in place, only about a third have done anything about it.

In its report (published under the title "Oops!"), PWC says that over the past year one in ten of these companies suffered a disaster that affected the ability to function. Service businesses proved to be twice as likely to be hit compared to product-based companies.

Breakdowns included (in order of frequency) failure of computer systems, loss of power or telecoms services, damage to reputation, inability to meet supply chain obligations and damage to buildings.

"While a business continuity plan is good to have," notes PWC's Phillip Bloodworth, "its use is akin to locking the barn door after the horse ran off." Assessing and managing risks beforehand would help to keep the horse in the barn in the first place, he adds.

Elliott Chase