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CIRI researchers develop resilience calculator to aid struggling small, mid-size businesses

8/27/2020 10:00:26 AM Lizzie Roehrs, CIRI

COVID-19 has many small and mid-size businesses – which are vital to the nation’s economy – struggling to remain afloat because of supply chain interruptions, temporary closures, employees unable to go to work, and other disruptions caused by the pandemic. And there’s reason for concern about its long-term impact too: An estimated 90% of businesses fail within two years of a major disruption, according to the Small Business Administration.

The Business Resilience Calculator (BRC) is a tool that was designed to help businesses minimize losses during uncertain times. The calculator, developed by researchers in the Critical Infrastructure Resilience Institute (CIRI), a Department of Homeland Security Center of Excellence led by the University of Illinois, Urbana-Champaign, empowers users to make cost-effective resilience investments to reduce losses during business interruptions. A pre-release version of the tool is being offered for free to help provide relief to businesses affected by COVID-19.

“The pandemic is one of the worst business disruptions in our nation’s history, causing massive business interruption and huge economic losses,” says CIRI Executive Director Randy Sandone. “The BRC will help businesses affected by COVID-19 to identify cost-effective tactics to employ to reduce further losses and to recover as quickly and as economically possible.”

The BRC offers a user-friendly approach to business resilience and allows users to conduct a self-assessment to determine current priorities. Users will begin by selecting the cause of the disruption, indicating the biggest problems facing their business (e.g., infrastructure outages or inability of employees to report for work), selecting their top priorities for bouncing back, and then comparing their approach to those taken by real businesses during previous disruptions and the results they achieved. The tool enables users to identify the most cost-effective resilience tactics based on the experiences of businesses like theirs in prior disasters.

Noah Dormady, The Ohio State University
Noah Dormady, The Ohio State University

CIRI researchers Noah Dormady of The Ohio State University and Adam Rose of the University of Southern California developed the tool using data from Hurricane Harvey and Superstorm Sandy. The pair sought to understand the link between business responses to various stressors and the contributions those decisions made to the overall resilience of the business. The team conducted two large-area surveys in the states of Texas, New York, and New Jersey to assess the impacts of the storms on affected businesses. A novel contribution of the surveys included measurement of avoided losses, meaning losses that businesses avoided by pursuing sets of actions that reflected different resilience tactics.

Adam Rose, University of Southern California
Adam Rose, University of Southern California

“Their research yielded significant insights that could be used by businesses to plan and prepare more effectively for potential disruptions,” says Sandone. “We wanted to build an intuitive and useful tool to allow businesses to access and use the findings of that research.”

While the pre-release of the calculator focuses on the pandemic, it is also applicable to other types of scenarios, such as natural disasters, or power grid failures. Also, while this version of the calculator focuses on the cost-effectiveness of resilience tactics to help businesses identify cost-saving resilience opportunities now, the full version of the tool, which is scheduled to be released in 2021, will include additional metrics and modules.

The BRC was managed by Senior Program Manager Jose Medina Cruz developed with contributions from software development firm 2Wav, LLC, and through funding from Homeland Security.