[OR] [P2] [S2] [MII] Understanding Interconnections and Interdependencies in Operational Resilience

[P2] [S2] Additional Explanation

Understanding Interconnections and Interdependencies in Operational Resilience

Introduction

Operational resilience requires organisations to move beyond siloed views of risk and operations and adopt a system-wide perspective on service delivery. 

Central to this perspective is the concept of mapping interconnections and interdependencies, a key activity within Operational Resilience Phase 2 – Implement (P2-S2) of the BCM Institute methodology.

This chapter defines interconnections and interdependencies, clarifies their distinctions, and explains their significance in enabling organisations to identify vulnerabilities, manage disruption, and remain within defined impact tolerances.

Purpose of the Chapter

The purpose of this chapter is to:

• Define interconnections and interdependencies in the context of operational resilience
• Explain how these concepts apply to Critical Business Services (CBS)
• Highlight the differences and relationships between the two terms
• Provide practical insight into their role in resilience planning and scenario testing

Definition of Interconnections

What are Interconnections?

Interconnections are the linkages, relationships, and points of interaction among different components within an organisation’s operating environment.

These components typically include:

• Processes (workflows and activities)
• People (staff, teams, roles)
• Technology (applications, systems, infrastructure)
• Facilities (physical locations, data centres)
• Third parties (vendors, service providers)

Key Characteristics of Interconnections

• Represent how components are connected
• Focus on flows and interactions (e.g., data flow, process handoffs)
• Can be internal or external
• Often visualised through process maps, system diagrams, or network maps

Example

A payment processing system connected to a core banking platform is an interconnection. The link enables transaction data to flow between systems.

Definition of Interdependencies

What are Interdependencies?

Interdependencies refer to the mutual reliance between components, in which the functioning of one component depends on the availability or performance of another.

Key Characteristics of Interdependencies

• Represent dependency relationships
• Focus on impact and reliance
• Highlight potential points of failure
• Can be unidirectional or bidirectional
• Critical for identifying cascading risks

Example

If the payment processing system cannot function without the core banking platform, it is dependent on that platform—an interdependency.

Interconnections vs Interdependencies

While often used together, these terms are not interchangeable. Understanding their distinction is essential for accurate mapping and analysis.

Relationship Between Interconnections and Interdependencies

Interconnections and interdependencies are complementary concepts:

• Interconnections form the structure of the operating environment
• Interdependencies reveal the criticality within that structure

Key Insight

Not all interconnections represent interdependencies, but all interdependencies arise from interconnections.

This distinction is crucial:

• A connection may exist without critical reliance
• But a dependency always implies a connection that matters for service delivery

Application in Operational Resilience

Supporting Critical Business Services (CBS)

Mapping interconnections and interdependencies enables organisations to:

• Identify end-to-end service delivery chains
• Understand how CBS are supported by underlying resources
• Detect hidden dependencies, especially across third parties

Enabling Impact Tolerance Setting

Understanding dependencies helps organisations determine:

• Maximum tolerable downtime (MTD)
• Maximum tolerable data loss (MTDL)
• Points where disruption becomes intolerable

Without identifying interdependencies, impact tolerance setting becomes incomplete and unreliable.

Strengthening Scenario Testing

Scenario testing relies heavily on these concepts:

• Interconnections define the scope of testing
• Interdependencies determine where failures propagate

Example:

A cyberattack on a third-party vendor may cascade through interconnected systems due to underlying interdependencies.

Enhancing Risk Identification

Interdependency mapping allows organisations to:

• Identify single points of failure
• Detect concentration risks (e.g., reliance on a single vendor)
• Understand systemic and cascading failures

Practical Mapping Considerations

When mapping interconnections and interdependencies, organisations should:

Adopt a Structured Approach

• Start with Critical Business Services (CBS)
• Decompose into sub-CBS and processes
• Map supporting resources (People, Process, Technology, Third Parties)

Capture Both Dimensions

• Document connections (who/what is linked)
• Identify dependencies (what relies on what)

Use Standardised Data Fields

Typical mapping fields include:

• Component Type (Process, System, Vendor)
• Connection Type (data flow, control flow)
• Dependency Type (critical, non-critical)
• Upstream/Downstream relationships

Common Challenges

Organisations often face the following issues:

• Confusing connections with dependencies
• Incomplete mapping of third-party relationships
• Lack of granularity in process decomposition
• Static mapping that does not reflect real-time changes

Addressing these challenges requires governance, continuous updates, and integration with operational risk and BCM frameworks.

Interconnections and interdependencies form the foundation of operational resilience mapping.

While interconnections describe the structure of relationships, interdependencies reveal the critical reliance and risk embedded within those relationships.

A mature operational resilience capability requires organisations to:

• Clearly distinguish between these two concepts

• Map both comprehensively across Critical Business Services

• Use the insights to inform impact tolerance setting, scenario testing, and risk management

Ultimately, understanding interconnections and interdependencies transforms mapping from a documentation exercise into a powerful decision-making tool, enabling organisations to anticipate disruptions, manage cascading failures, and sustain critical services under stress.