Pandemic flu test: Planning for the next disaster

Financial services will be the first industry to plan for a pandemic. Time for broader planning?

On Sept. 11, 2001, the business continuity and the financial services industries met head-on. Long-term disruption was avoided in part by a decision to let workers return to work on Wall Street six days later — a choice that has since been questioned based on a revised analysis of air quality.

Given the vital role played by the financial sector, many feel that creating detailed response plans to counter worst-case scenarios is long overdue. That’s why the U.S. Department of the Treasury and the Securities Industry and Financial Markets Association, in conjunction with the Financial Banking Information Infrastructure Committee (FBIIC) and the Financial Services Sector Coordinating Council (FSSCC), will be conducting a three-week “Pandemic Flu Exercise” this year from Sept. 24 through Oct. 12.

The exercise assumes an outbreak of H5N1, a much-feared strain of the avian flu virus. Were H5N1 the source of a major pandemic, it could cause massive and protracted absenteeism. According to a bulletin issued by FBIIC and FSSCC, “all normal conditions and operating relationships potentially will be disrupted.”

The primary purpose of the virtual exercise, which will take place over the Internet, will be to identify “systemic risks” to the financial services sector. It will provide an opportunity for companies to evaluate their current business continuity plans in relation to this particular type of disaster, and to understand the ripple effects within the financial markets and in other highly interdependent sectors.

Participating with the voluntary exercise will be an advisory group with representatives from the power and telecommunications industry as well as the Center for Disease Control (CDC).

At present, government regulations leave the details of preparedness to the enterprise. NASD Rule 3510 and NYSE Rule 446 simply state that financial services companies (including banks, securities firms, insurance companies, and credit unions) must have in place business continuity plans that include “contingencies for providing customers with access to their funds and securities during a disaster.”

Of course, a large-scale pandemic would touch almost every industry. According to Dave Engaldo, a spokesman for FSSCC, the more automated IT is, the better off your company is. “You are going to be less dependent on people who are absent or at home, worried about coming into office or taking care of family,” Engaldo says. But automated trading systems or clearinghouse systems still need to be piloted to some degree.

That’s why I believe pandemic-proof communications is the key. To explore that aspect, I called to Steve Zirkel, general manager of business continuity at Varolii, a company that offers on-demand interactive communications services.

Unlike other catastrophic disruptions, says Zirkel, a pandemic is a people problem. Zirkel advises companies to build an automated communications platform that can be accessed if this kind of disaster becomes a reality.

According to Zirkel, we need a system that can give people a full range of communications capabilities in or out of the office -– to be able to create content, to reach other employees from anywhere, to ensure that a message was received, and to receive feedback from recipients.

Communications should cascade through the full range of channels with the push of a single key: e-mail, phone, fax, IM, SMS, or wiki if need be. Rules could define recipients by area code, employee number, or other custom designations.

The Pandemic Flu Exercise taking place this fall will be a good test for these kinds of systems. On Monday, Sept. 24, at 9 a.m. Eastern time, participants will receive their first scenario. Each company will try to determine what the impact will be to its firm and then respond by 1 p.m. Eastern time on Wednesday. Then, during a three-week period, companies can watch the simulated flu make its way across the country, grow into a full-bore pandemic, and then fall into decline. The hope is that companies will learn how the entire pandemic cycle will affect facilities across the country.

Whether or not your company intends to participate in the exercise, the effects of a pandemic are unique, according to the experts I spoke with. It’s a great idea to create a contingency plan — no matter what industry sector you’re in.