UAE firms lose over $500,000 from weak recovery plans

Dubai: A majority of UAE organisations have lost more than $500,000 from operational disruptions over the past two years, exposing gaps between confidence in business continuity plans and actual recovery performance.

New research from Optro, formerly AuditBoard, found that 59% of UAE organisations reported losses above $500,000 after disruptions linked to vendor outages, supply chain interruptions, IT and cloud service failures, and weather-related events.

The study also found that only 19% of UAE organisations have a formal disaster recovery plan in place, the lowest level recorded globally and below the global average of 31%.

Confidence is high, recovery is weak

The findings point to a mismatch between boardroom confidence and operational readiness. Nearly three-quarters of UAE respondents said they were confident their organisation could meet recovery objectives during a major disruption, while 79% said they could demonstrate operational resilience compliance to regulators.

Actual performance was weaker. Among UAE organisations that faced a significant disruption in the past 12 months, 62% failed to recover within their established recovery time objectives. More than a third exceeded their recovery targets by more than twice the planned timeframe.

Business continuity activation was also slow, with 42% unable to activate their business continuity management plans within the first 24 hours of a major incident. Only 15% were able to activate those plans within the first four hours.

“The findings reveal a dangerous resilience gap. Many organisations have confidence in their preparedness, but confidence alone does not reduce downtime, protect revenue or accelerate recovery,” said Richard Chambers, Senior Advisor, Risk and Audit at Optro and former CEO of The Institute of Internal Auditors. “Operational resilience is ultimately measured during moments of disruption, and the data suggests many organisations are discovering weaknesses only after an incident has already occurred.”

Third-party failures hit operations

Third-party risk emerged as one of the biggest pressure points for UAE organisations. More than four in five respondents said a third-party outage or failure had caused significant disruption to their operations within the past two years.

Among those affected, 67% estimated the business impact at more than $1 million.

Despite that exposure, visibility into supplier resilience remains limited. Only 31% of UAE organisations said they have full visibility into business continuity plans for critical vendors, the lowest level globally and well below the international average of 49 per cent.

The data suggests that many companies remain dependent on external providers without fully testing whether those providers can support critical operations during a crisis.

Disaster recovery plans remain limited

Only 38% of UAE organisations have established recovery time objectives and recovery point objectives for all critical business processes.

The study also found that just 22% have fully mapped critical business processes to the technology systems, third parties and supply chain dependencies needed to support them.

That lack of mapping can leave companies exposed during disruptions, particularly when outages move across technology, vendors, logistics and customer-facing operations at the same time.

The findings come despite strong awareness of global resilience standards. UAE respondents reported high familiarity with frameworks including DORA, G-SIB requirements and SR 14-1, but Optro said awareness is not always translating into operational readiness.

Companies plan to spend more

UAE organisations are preparing to increase investment in business continuity. The study found that 47% reported a rise in BCM budgets over the past 12 months, while 51% expect spending to increase over the next two years.

Optro said those investments are likely to be more effective when paired with independent validation, regular testing and continuous assurance. Nearly one in four UAE organisations have never subjected their BCM programme to formal external validation or audit.

Chambers said recent events across the region had shown that disruption can come from multiple directions with little warning.

“Recent events across the region have reinforced a reality that disruption can emerge from many directions and often with little warning,” Chambers added. “Whether organisations are dealing with geopolitical uncertainty, third-party failures, cyber incidents or operational outages, resilience cannot be assumed. It must be tested, validated and continuously improved. The organisations that recover fastest are rarely those with the most confidence. They are the ones that regularly challenge their assumptions through exercises, audits and independent reviews long before disruption occurs.”

The UAE companies are becoming more aware of resilience risks, but many still need to close basic gaps in planning, testing, vendor visibility and recovery execution before the next major disruption hits.