In 2019, over 1 million customers were left without electricity for 45 minutes when a technical fault on two large generators played a major role in causing significant power outage across the UK. This not only impacted consumers, but also the providers’ own safety systems and, most notably, several rail services which left trains stranded, cancelled, or severely delayed across the network¹. Instances like this highlighted how important it is for infrastructure organisations to adapt and develop operational resilience. Yet, many still don’t believe they’ve made sufficient progress.

One approach that helps facilitate the end to end development of resilience across an organisation is to anchor resilience around service. This way, they can break down their approach to improving service resilience between proactive and reactive initiatives.

We see most infrastructure organisations as stronger in reactive initiatives of resilience related to the measures taken in response to a disruption. This begs the question; how can organisations best develop their proactive approach to service-oriented resilience?

Let’s explore this in more detail:

Understanding the context within which an organisation delivers its services enables it to target resilience efforts more effectively.
 

Understanding context involves gaining clarity of three elements:

1. what are the services your organisation delivers;
2. who are the customers of these services; and,
3. how are these services delivered, considering both internal and external dependencies?

Too often organisations take a siloed approach to resilience, where it’s a responsibility of a specific team, or it’s considered across limited areas of the business – such as its network, sites,  or supply chain. Just as you need an entire business to deliver a service, resilience must also be considered comprehensively across the organisation.

Some key resiliency tools used by leading infrastructure organisations to target their limited resources into the areas of greatest impact include: 

Criticality framework: an organisation might only map out the delivery of its most critical service or define in detail the interdependencies which are most material or exposed in delivering its services.

Impact thresholds: definition of duration and number of customers which could be disrupted within the organisation’s risk appetite to guide resilience measures. These are agreed at the executive level and socialised across their ecosystem to manage both customer and regulatory expectations.

ORGANISATIONS PROVIDING A VARIETY OF SERVICES CAN HAVE VARYING ANSWERS ACROSS DEPARTMENTS AROUND THE DEFINITION OF THEIR CORE SERVICES AND CUSTOMERS RESULTING IN A FRAGMENTED APPROACH TO SERVICE RESILIENCE.

Anticipating a wide range of shocks and stresses and managing those with highest potential impact, regardless of likelihood, allows organisations to be resilient against a variety of risks.
 

Resilience is about managing high impact, low probability risks. These can sometimes be overlooked in traditional risk management. Leading organisations are using two key tools to mature their capability in this area:

1. Scenario-based stress testing: assessing the impact of critical shocks and stresses across their organisation. Data is used to detect changes in level of threat and identify conditions at which impact thresholds are likely to be breached.
2. Resilience strategy: to demonstrate their progress, more and more organisations are establishing a resilience strategy highlighting their long-term approach to managing and maintaining service resilience against future known and unknown challenges to provide confidence to Board members and the wider ecosystem.

THE ‘BEAST FROM THE EAST’ IN 2018 NOT ONLY IMPACTED THE INFRASTRUCTURE ASSETS OF WATER COMPANIES, BUT ALSO THEIR TECHNOLOGICAL SYSTEMS.

Building resistant services requires organisations to develop comprehensive risk and performance management capabilities.
 

An infrastructure organisation’s resilience strategy must also consider its asset management capability. Deloitte is a certified Institute of Asset Management endorsed assessor, and we have developed a self-assessment tool which allows organisations to get a better understanding of where their capability ranks globally.

CLEARLY DEFINED BENEFIT AND PERFORMANCE METRICS INFORMED BY RELIABLE AND TIMELY ASSET INFORMATION IS A KEY ENABLER IN BETTER MANAGING RISK AND PERFORMANCE.

Based on the results of the self-assessment tool, with over 60 organisations across various sectors, we’ve observed the following:

1. Many organisations are strong in developing an asset management strategy and delivering it across the asset lifecycle
2. Resilience-critical capabilities of performance and risk management are underdeveloped

Risk management and performance evaluation are particularly important as many organisations are good at identifying risks and mitigations but lack the governance and methodologies to track, measure and manage these risks as part of business as usual to ensure mitigations are effective and benefits are being measured.

To stay ahead of the game, resilient organisations take a proactive approach to adaptation and transformation.
 

Organisations must work in two speeds at the same time: ensuring that they are on a firm footing in the present while transforming and innovating to build resiliency for the future. To enable this, leading organisations are proactively adapting and transforming their business around three core areas:

1. Proactive leadership engagement: leaders are staying on top of risks, keeping resilience on the agenda, and enable continuous performance evaluation. Leaders are also being proactive in their engagement with the wider ecosystem to collaborate on best practice and provide visibility around areas of vulnerability to develop industry-wide solutions.
2. Agile governance: adapting and reviewing their processes and procedures to ensure they do not slow down an organisation’s ability to change; enabling nimble decision making where the right stakeholders have the capability and authority to make decisions quickly.
3. Business case development: the traditional financial business case for resilience is typically challenging given the low probability, high impact nature of disruptions. Adopting the 5 capitals model² to capture the comprehensive benefits of resilience measures, including a mixture of options across the four R’s³ to optimise value for money. The collection of information around the impacts of previous disruptions helps ensure a robust business case.

RESILIENCE IS MORE DIFFICULT THAN TRADITIONAL TRANSFORMATIONS SINCE IT RELIES ON BOTH INTERNAL AND EXTERNAL FACTORS WHICH MAKES TAKING A PROACTIVE AND COLLABORATIVE APPROACH MORE VALUABLE.

Ultimately, organisations that are stronger in their ability to understand, anticipate and adapt to service disruption risks are better able to ensure service continuity and meet stakeholder expectations.

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¹ Investigation into 9 August 2019 power outage | Ofgem
² The Five Capitals - a framework for sustainability | Forum for the Future
³ Exploring principles for resilient infrastructure | National Preparedness Commission