Demonstrating ROI of Operational Resilience

Operational Resilience (OpRes) refers to an organisation’s ability to withstand and recover from disruptions, challenges, and crises that could impact its reputation, operations, or financial performance.

The opinions expressed here are those of the authors. They do not necessarily reflect the views or positions of UK Finance or its members.

The primary goal of OpRes is to build robust systems, processes, and capabilities that allow organisations to adapt to unexpected events swiftly and effectively. This ensures the continuity of critical functions while minimising the impact of disruptions. OpRes encompasses various practices, including risk management, business continuity planning, supply chain management, cybersecurity/cyber resilience, and crisis management.

OpRes activities aim to achieve several key objectives:

  • Long-term viability: Safeguarding sustainability by enabling it to navigate complex and uncertain business environments.
  • Customer trust: Maintaining important business services during disruptions to build confidence among customers, internal stakeholders, and regulatory bodies.
  • Sustainable growth: Contributing to the ability to grow through challenging circumstances.

Whilst OpRes may be viewed as a compliance or regulatory requirement by some organisations, there is a crucial aspect sometimes not considered – demonstrating a Return on Investment (ROI). Quantifying the benefits of OpRes can be contentious due to factors such as long-term perspectives, limited historical data, intricate interdependencies, and human factors. Despite these challenges, recognising OpRes’s value beyond compliance can help drive competitive advantage and business growth.

Organisations exploring concepts for next generation resilience are now considering how to demonstrate a “Return on resilience investment” (RORI). The purpose of RORI analysis is to quantify financial benefits through value derived from risk management and resilience analysis. The approach focuses on assessing the initial investment (cost) and the expected benefits (net benefit) of resilience activities.  

A strong RORI indicator demonstrates that resilience investments are generating a return on investment, while a negative RORI suggests that the costs exceed the expected benefits. RORI can therefore be used to articulate critical messages to executive leadership that include:

Reduced costs: Associated with downtime, data loss, reputational damage, and other negative consequences of disruptions.

Improved efficiency: By minimising disruptions and ensuring smooth business continuity, organisations can optimise their resources, resulting in cost savings and improved performance.

Enhanced customer satisfaction: By providing reliable and uninterrupted services, organisations can expect to see enhanced loyalty and customer retention, thus increased revenue, and growth.

Competitive advantage: Demonstrating a strong ability to withstand and recover from disruptions can deliver competitive advantage through increased market share, brand reputation, trust, and confidence.

Long-term sustainability: By building a resilient foundation, organisations can adapt to changing market conditions, technological advancements, and evolving customer demands.

Regulatory compliance: By meeting or exceeding regulatory requirements, organisations can avoid costly fines, legal penalties, and reputational damage, ensuring compliance and protecting their financial interests.

The next generation of resilience approaches should consider RORI an important metric to monitor and evaluate the effectiveness of OpRes strategies. By demonstrating a positive RORI, organisations can monitor and embed long-term sustainability, competitiveness, and ability to thrive in the face of disruptions and challenges.