---
title: [Implement] [OR] [P2] [S4] Overcoming Challenges in Scenario Testing in Operational Resilience
description: Overcoming Challenges in Scenario Testing in Operational Resilience
image: https://blog.bcm-institute.org/hubfs/Operational%20Resilience%20OR/Operational%20Resilience%20Morepost/OR%20Planning%20Methodology%20Icon/IC_OR_Implement_Conduct%20Scenario%20Testing.png
---

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###### Operational Resilience Planning Methodology: "Your Guide To" Series

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# \[Implement\] \[OR\] \[P2\] \[S4\] Overcoming Challenges in Scenario Testing in Operational Resilience

[![Scenario Testing](https://no-cache.hubspot.com/cta/default/3893111/58ea4ab9-998a-451c-bb54-801ae4cb782d.png)](https://cta-redirect.hubspot.com/cta/redirect/3893111/58ea4ab9-998a-451c-bb54-801ae4cb782d)[![\[OR\] \[BoK 9\] \[Guide\] Conduct Scenario Testing](https://no-cache.hubspot.com/cta/default/3893111/9332b9b6-da46-462b-97a6-7e83ace6d569.png)](https://cta-redirect.hubspot.com/cta/redirect/3893111/9332b9b6-da46-462b-97a6-7e83ace6d569)In the world of operational resilience, scenario testing stands as a critical pillar. Yet, it presents unique challenges that require careful consideration, especially when aligning with regulatory expectations.

As one of the facilitators for the OR courses, I would like to share a series of articles that explore the intricacies of scenario testing, offer insights into meeting regulatory standards, and provide practical guidance for enhancing operational resilience.

[Moh Heng Goh](https://blog.bcm-institute.org/operational-resilience/author/moh-heng-goh) Jan 14, 2024

###### Operational Resilience Certified Planner-Specialist-Expert

### [![Scenario Testing](https://no-cache.hubspot.com/cta/default/3893111/58ea4ab9-998a-451c-bb54-801ae4cb782d.png)](https://cta-redirect.hubspot.com/cta/redirect/3893111/58ea4ab9-998a-451c-bb54-801ae4cb782d)[![\[OR\] \[Banner\] \[Guide\] \[P2\] \[S4\] Conduct Scenario Testing](https://no-cache.hubspot.com/cta/default/3893111/ba6b035e-9381-414f-afb0-88a0b959011d.png)](https://cta-redirect.hubspot.com/cta/redirect/3893111/ba6b035e-9381-414f-afb0-88a0b959011d)Overcoming Challenges in Scenario Testing in Operational Resilience

[![\[OR\] \[BoK 9\] \[Guide\] Conduct Scenario Testing](https://no-cache.hubspot.com/cta/default/3893111/9332b9b6-da46-462b-97a6-7e83ace6d569.png)](https://cta-redirect.hubspot.com/cta/redirect/3893111/9332b9b6-da46-462b-97a6-7e83ace6d569)In the world of operational resilience, scenario testing stands as a critical pillar. Yet, it presents unique challenges that require careful consideration, especially when aligning with regulatory expectations.

As one of the facilitators for the OR courses, I would like to share a series of articles that explore the intricacies of scenario testing, offer insights into meeting regulatory standards, and provide practical guidance for enhancing operational resilience.

#### Navigating Regulatory Expectations

Regulators wield the ultimate authority to determine the adequacy of your organisation’s operational resilience efforts.

Your responsibility is to endeavour to meet their expectations and, when necessary, demonstrate the best possible outcome.

However, there may be occasions when the board must step in and candidly acknowledge the limitations while striving to fulfil the set objectives.

#### The Board’s Crucial Role

The board plays a pivotal role in operational resilience, particularly when regulatory discussions are at the forefront.

Central banks or regulatory authorities may scrutinise your resilience strategies, and the board must be prepared to engage in meaningful dialogue.

They advocate for what is achievable while maintaining transparency regarding the organisation’s capabilities.

#### Understanding Scenario Testing

[![New call-to-action](https://no-cache.hubspot.com/cta/default/3893111/fe85e2f2-f972-49ad-8321-d370fcfd9caf.png)](https://cta-redirect.hubspot.com/cta/redirect/3893111/fe85e2f2-f972-49ad-8321-d370fcfd9caf)Scenario testing is more than an exercise; it is an opportunity to evaluate how your organisation responds and recovers from severe disruptions or operational disruptions.

Unlike traditional business continuity management (BCM) or crisis management testing, scenario testing extends beyond the internal scope. It necessitates the involvement of third-party entities and customers, adding complexity to the testing landscape.

#### Crafting Impactful Scenarios

Regulators insist on high-impact scenarios that result in significant disruption. These criteria are not arbitrary but crucial in evaluating an organisation’s resilience.

It is essential to prove that your scenarios are not just another replication of traditional BCM exercises but also scenarios that can test your readiness.

#### The Conundrum of “Unlikely to Occur or Remain Probable”

Defining scenarios that are both severe and improbable can be daunting. The debate often arises here, as aligning with this criterion can pose a significant challenge.

However, it is vital to recognise that achieving this balance is essential in fulfilling regulatory expectations.

#### Strategies for Effective Scenario Testing

To address the complexity of scenario testing, consider the following strategies:

##### Preventive Measures

- Prioritise prevention through service-level contracts and regular testing of preventive controls. 
- Ensure that your third-party service providers are also rigorously assessed.

##### Active Participation

- Participate actively as an observer during live tests
- Having a team present on-site during third-party exercises offers higher assurance.

##### Benchmarking

- Keep an eye on industry peers and competitors. 
- Monitor their scenario-testing approaches and learn from their experiences.

##### [![New call-to-action](https://no-cache.hubspot.com/cta/default/3893111/b82f4b68-92a3-4741-a22a-c2df4a0479f2.png)](https://cta-redirect.hubspot.com/cta/redirect/3893111/b82f4b68-92a3-4741-a22a-c2df4a0479f2)Extreme Examples

- Lean on the extreme but plausible side when crafting scenarios,
- Test the boundaries of your organisation’s resilience and observe where you reach the threshold of intolerable harm.

##### Feedback and Debrief

- Emphasise the importance of feedback, review, and debriefing after each test. 
- Use these insights to improve your testing processes and inform management about potential vulnerabilities.

##### [![New call-to-action](https://no-cache.hubspot.com/cta/default/3893111/25cc2932-73ea-4cac-932b-2d899cc8bb98.png)](https://cta-redirect.hubspot.com/cta/redirect/3893111/25cc2932-73ea-4cac-932b-2d899cc8bb98)Outsourcing Realities

- Assess the practicality and feasibility of bringing critical business services or functions back in-house from third-party vendors.
- Recognise that some outsourced operations may not be readily transferable.

 

#### [![Banner \[Summing\] \[OR\] \[E3\] Perform Scenario Testing](https://no-cache.hubspot.com/cta/default/3893111/11895c06-91e9-4cec-acb6-4356741952e4.png)](https://cta-redirect.hubspot.com/cta/redirect/3893111/11895c06-91e9-4cec-acb6-4356741952e4)

Operational resilience is a dynamic field that requires organisations to continuously evolve their strategies and practices.

Meeting regulatory expectations in scenario testing demands a thoughtful approach prioritising prevention, active involvement, and adaptability.

By balancing severe scenarios and improbable events, organisations can demonstrate their commitment to resilience while effectively navigating the complexities of regulatory compliance.

##### "Implement" Phase of the OR Planning Methodology

| **Identify Critical Business Services** | **Map Processes and Resources** | **Set Impact Tolerance** | **Conduct Scenario Testing** | **Improve Lesson Learned** |   |
| --- | --- | --- | --- | --- | --- |
| [![New call-to-action](https://no-cache.hubspot.com/cta/default/3893111/327d1e38-3d2b-46f8-ba67-6c87867c7caa.png)](https://cta-redirect.hubspot.com/cta/redirect/3893111/327d1e38-3d2b-46f8-ba67-6c87867c7caa) | [![New call-to-action](https://no-cache.hubspot.com/cta/default/3893111/5e3dd1b4-6317-40ca-be8a-dd8067b4e7cf.png)](https://cta-redirect.hubspot.com/cta/redirect/3893111/5e3dd1b4-6317-40ca-be8a-dd8067b4e7cf) | [![New call-to-action](https://no-cache.hubspot.com/cta/default/3893111/c64544e9-072f-4ac1-b56a-9403447f4246.png)](https://cta-redirect.hubspot.com/cta/redirect/3893111/c64544e9-072f-4ac1-b56a-9403447f4246) | [![New call-to-action](https://no-cache.hubspot.com/cta/default/3893111/011a840d-ac82-475a-9872-076e579267f3.png)](https://cta-redirect.hubspot.com/cta/redirect/3893111/011a840d-ac82-475a-9872-076e579267f3) | [![New call-to-action](https://no-cache.hubspot.com/cta/default/3893111/d4dffacd-42a6-4c71-aa73-4af966674a32.png)](https://cta-redirect.hubspot.com/cta/redirect/3893111/d4dffacd-42a6-4c71-aa73-4af966674a32) |   |

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