Scenario testing: Evaluating its role and its effectiveness within business continuity management to identify improvement areas and increase operational resilience

In a corporate landscape increasingly shaped by digital infrastructures and pervasive third-party dependencies, an organisation's ability to withstand and recover from disruption has emerged as a core determinant of operational credibility. Scenario testing - while historically often regarded as a discretionary or supplementary activity - now represents a critical instrument for assessing and enhancing business continuity management and, more broadly, operational resilience. It provides a structured mechanism through which companies can validate not only the robustness of their systems, but also the responsiveness of their people and the coherence of their governance structures. The recent evolution of regulatory frameworks, notably within the European Union through the introduction of the Digital Operational Resilience Act and the Network and Information Systems Directive 2, underscores the urgency of adopting scenario testing as a formalised, evidence-driven practice. The pressure to move beyond performative testing towards a model that integrates real-world complexity, third-party exposure and regulatory accountability has never been greater. This paper presents an examination of the rationale, methodology and strategic implications of scenario testing, with particular reference to large, internationally active organisations - entities whose operations are systemically embedded and highly interconnected. Special attention is paid to the critical role of Information and Communications Technology third-party providers within the testing perimeter, as well as to the growing need for multi-party coordination across jurisdictions and regulatory domains. By offering a structured approach to the design, execution and evaluation of scenario tests, this paper aims to elevate scenario testing from a compliance-oriented activity to a strategic capability. In doing so, it positions testing as a lever through which organisations can identify latent weaknesses, validate continuity strategies, improve internal and external coordination and ultimately build trust - internally, with regulators and across the broader ecosystem. Organisations that embed scenario testing as a dynamic and evolving component of their resilience posture - rather than a periodic exercise in regulatory appeasement - will be better equipped to act with agility, assurance, and integrity in the face of operational crises. This article is also included in The Business & Management Collection which can be accessed at https://hstalks.com/business/.