Sainsbury's has begun a drive to ensure its key
suppliers have business continuity plans in place to deal with
disruptions such as the loss of IT systems or key sites becoming
inaccessible.
The supermarket chain has begun quizzing companies responsible
for supplying stock and providing services on their plans to keep
computer networks running in the event of disaster.
"It is a massive piece of work. Given that Sainsbury's deals
with 2,500 suppliers, we are focusing on those that are most
critical to our operations," said Steve Mellish, head of business
continuity at Sainsbury's. The firm is also looking at how to
revise terms and conditions to include business continuity planning
in future contracts with new suppliers.
Providing evidence that IT can survive disaster is becoming
increasingly important in winning contracts, according to Richard
Hawtin, partner at law firm Baker & McKenzie. "It is difficult
to think of a significant outsourcing or services agreement where
business continuity has not been addressed in significant detail,"
he said.
Sainsbury's initiative follows concerns that businesses,
particularly smaller firms, are inadequately prepared for
disruptions caused by terrorist attacks, power failures, floods or
transport failures. Last month City of London Police warned that
only half the firms in the City had continuity plans in place to
deal with the impact of a terrorist incident.
Mellish said, "We will be asking what their current capability
is. We will be asking whether they have business continuity and
disaster recovery plans and whether they cover IT, loss of critical
location, etc. If we get something back saying 'no we don't have
cover for IT', we will be talking to them very quickly."
Over the past 12 months the supermarket has been piloting a
programme to improve levels of business continuity planning with
its IT outsourcing partner Accenture, LMUK, which runs the Nectar
loyalty card scheme, and McAlpine, which manages Sainsbury's
generators and refrigerators. Over the next 12 months it plans to
extend the programme to cover up to 25 other in-store service
providers and 200 major suppliers of goods to stores.
Sainsbury's plans to work with its suppliers to help them
improve their business continuity planning, providing them with
advice and guidance, rather than threatening to drop suppliers that
do not comply. The supermarket has developed a rating scheme to
assess how critical each supplier is to the business. It is
focusing its attention on suppliers that could have a significant
impact on Sainsbury's business reputation if they faced
disruption.
Sainsbury's has set up two disaster recovery centres in London,
equipped with desks, PCs and phones. They have the capacity for up
to 500 staff in an emergency, and the firm has issued its workforce
with maps showing where the centres are.
Rob Carolina, an IT specialist with law firm Origin, said
companies could request an audit of IT disaster recovery plans when
negotiating with suppliers. "You can say, 'we want to audit you,
inspect your facilities'. That is the prime value of these
contracts," he said.