Terror readiness: Risk vs. ROI

06/07/2004 07:48 AM

By Christina Torode

Business continuity is by no means a new concept in the IT world.

But when it comes to counterterrorism preparedness, corporate America has become complacent, industry experts say.

“Corporations are not taking terrorism seriously,” said Col. David Gavigan, director of Homeland Security for the Bristol County Sheriff’s Office in Massachusetts. “To Corporate America, antiterrorism security is like putting money into a black hole because there is no ROI in their mind-set. Unless something happens, they can’t measure what the security prevents. They’d rather take a risk.”

Corporations are not ignoring the risk completely. Some businesses have even taken contingency plans to the extreme. One chipmaker, for example, has emergency centers in every country in which it operates. These centers have Internet access and hand radio phones, and once a month an emergency preparedness team descends on a plant with a mock emergency scenario.

“This company has even hired and trained government inspectors in case of a disaster, whether caused by a bomb or an earthquake, government inspectors go to schools and hospitals to approve their reopenings first and businesses last,” said Yossi Sheffi, professor of civil and environmental engineering and the leader of MIT’s Center for Transportation and Logistics. The center is conducting a three-year research project on the impact of terrorism on supply chains to help companies identify what they can do to bounce back when disaster strikes.

Gerard Group International, a counter-terrorism consulting firm, is gaining traction in industries such as financials and insurance and marine security.

The Gerard Group — 21 years old, privately held and self-funded — is developing a terrorism threat forecasting software system that retrieves and analyzes data in millions of records. The system links all of the records by various context and keywords and houses artificial intelligence technology that identifies relationships and creates connections between the records.

“We expect the system to be up and running within the next six months and believe it will be the most powerful analyses and forecasting tool for counter-terrorism outside the CIA,” said Ilana Freedman, CEO and managing partner of Gerard Group International.

Freedman has 20-plus years of experience in counter-terrorism preparedness and trend forecasting. Sixteen of those years were spent in Israel, where she served as an adviser to government agencies and businesses working alongside the Israeli police and military.

The firm also draws its consulting talent from the military, law enforcement, technology firms, hazmat teams, assault response, K-9 bomb sniffing, intelligence and security. With an average 15 years’ experience in counter-terrorism, Freedman says “None of us are ‘9/12ers.’

“The terrorist acts I observed in Israel are not a local phenomenon; it’s globally funded with money coming in from everywhere, including from the U.S.,” Freedman said. “This is our problem, not just theirs. We may have distanced ourselves from terrorism since 9/11, but the fact remains that we are very much at risk.”

In addition to the forecasting tool, Gerard Group International sells program modules including threat analyses, vulnerability assessment, preparedness solutions and monitoring.

“It’s not just about what’s in your own facility,” Freed-
man said. “What people need to be aware of is who their suppliers are and what their operational processes are to maintain business in case of an attack.”

The disruption that cell phone manufacturers Nokia and Ericsson encountered a few years ago was not a terrorist attack. But Nokia’s reaction to the problem is a case study of how a business can react to a disaster.

In March 2000, a fire halted the manufacture of chips at Phillips Electronics in New Mexico, with Phillips predicting that manufacturing would not come back on line for days or even weeks.

“Nokia immediately sprang into action, called Phillips and asked for all the chips it had available, borrowed from other sources and even redesigned their color phones,” said MIT’s Sheffi. “Ericsson didn’t realize the magnitude of the problem until one day the chips stopped coming, which is why Sony is now making phones for Ericsson. ”

In the preparedness solutions phase, Gerard Group International walks the business through the process of closing vulnerability gaps, which could be something as simple as hiding monitoring devices, installing an electrified fence or hiring intimidating-looking security personnel, Freedman said. Role-playing, war games and response modeling are also conducted in this phase and on an ongoing basis.

The consulting firm also recommends the technology and equipment that must be put in place and oversees installation and integration of the systems.

Training personnel to react to an emergency situation is key, she said, and the firm also offers security guard evaluations and bodyguard training.

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