[OR] [P2] [S1] [CBS] [C7] Common Challenges and Pitfalls

Chapter 7 Common Challenges and Pitfalls

Introduction

Identifying Critical Business Services (CBS) is a foundational step in operational resilience, yet organisations frequently encounter challenges that can undermine the effectiveness of this exercise.

These pitfalls often arise from entrenched organisational thinking, lack of clarity in definitions, or insufficient governance and collaboration.

Understanding these common issues is essential to avoid misalignment and ensure that CBS identification remains robust, defensible, and aligned with regulatory expectations.

Confusing Processes with Services

One of the most prevalent challenges is the tendency to equate internal processes with business services. Processes represent the internal activities required to deliver a service, whereas a service is defined by the outcome experienced by the customer or stakeholder.

When organisations focus excessively on processes:

They risk identifying too many “critical” elements at a granular level
They lose sight of the end-to-end service outcome
They create complexity that hinders effective prioritisation

To avoid this pitfall, organisations must consistently frame discussions around customer outcomes and ensure that processes are treated as supporting components rather than the primary unit of analysis.

Over-Identification: Everything Becomes “Critical”

Another common issue is the over-identification of services as “critical,” often driven by risk aversion or lack of clear criteria. When too many services are classified as critical, the concept of prioritisation becomes diluted.

Consequences include:

Inefficient allocation of resources and resilience investments
Difficulty in setting meaningful impact tolerances
Reduced focus on truly essential services

A disciplined application of criticality criteria—supported by measurable thresholds and governance oversight—is necessary to ensure that only genuinely critical services are identified.

Lack of Cross-Functional Input

CBS identification requires input from multiple functions, including business units, operations, IT, risk, compliance, and third-party management. A lack of cross-functional collaboration can result in incomplete or biased outcomes.

Without diverse input:

Key dependencies may be overlooked
Service definitions may be inaccurate or incomplete
Critical risks may not be fully understood

Organisations should adopt structured workshops and governance mechanisms to ensure that all relevant stakeholders contribute to the identification and validation process.

Ignoring Third-Party Dependencies

In today’s interconnected environment, many business services rely heavily on third-party providers, including cloud services, payment processors, and outsourced operations. Failing to consider these dependencies can lead to an incomplete understanding of service criticality.

Common issues include:

Underestimating the impact of third-party failures
Lack of visibility into subcontractors or third parties
Misalignment between internal resilience capabilities and external dependencies

A comprehensive CBS identification process must explicitly include third-party dependencies as part of the end-to-end service view.

Insufficient Senior Management Involvement

CBS identification is a strategic exercise that requires senior management oversight and approval. Without active involvement from leadership, the process may lack authority, direction, and alignment with organisational priorities.

Risks of limited senior management engagement include:

Lack of clear prioritisation and decision-making
Weak governance and accountability
Misalignment with risk appetite and strategic objectives

Senior management should play a key role in reviewing, challenging, and approving the final list of CBS to ensure organisational alignment.

Poorly Defined Service Boundaries

Defining the boundaries of a service—where it starts and ends—is often more challenging than anticipated. Poorly defined boundaries can lead to inconsistencies in how services are identified and assessed.

Typical problems include:

Overlapping services or duplicated definitions
Gaps in accountability between functions
Difficulty in mapping dependencies and setting impact tolerances

A clear boundary definition, anchored on customer triggers and outcomes, is essential to ensure consistency and clarity in CBS identification.

Treating CBS Identification as a One-Time Exercise

A significant pitfall is treating CBS identification as a one-off activity rather than an ongoing process. Business environments are dynamic, with new products, technologies, and risks emerging regularly.

If CBS identification is not continuously reviewed:

The list of CBS may become outdated
New critical services may be overlooked
Resilience strategies may no longer align with current risks

Organisations should embed CBS identification into governance frameworks, with periodic reviews triggered by changes in the business, regulatory landscape, or external environment.

While the methodology for identifying Critical Business Services is well-defined, its successful implementation depends on avoiding common pitfalls that can compromise outcomes. These challenges—ranging from conceptual misunderstandings to governance gaps—highlight the importance of discipline, collaboration, and strong leadership involvement.

By proactively addressing these issues, organisations can ensure that their CBS identification process remains focused, accurate, and aligned with the ultimate objective of operational resilience: safeguarding the continuous delivery of critical services to customers and stakeholders under all conditions.

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