Business Impact Analysis (BIA)
What is BIA Business Impact Analysis?
Business Impact Analysis is a process that helps businesses assess and analyze the damages and interruptions sustained by their operations due to accidents, disasters, emergencies, etc. It outlines areas of the company’s operations that are susceptible to damages in case of an unfavourable and unforeseen incident, making it a crucial part of the business contingency plan. Further, running a business impact analysis also makes planning for risks and minimizing them possible. The results and evaluation of this process are contained in the BIA Report.
The business impact analysis is carried out under the assumption that every component of a company’s operations relies on other components to be functioning correctly. However, some operations components are more critical than others. For this reason, it is warranted that components of higher importance are allocated more funds than those of lesser importance to the overall operations. For instance, if disaster strikes, the impact to the cafeteria in the office will not be as damaging to business operations as, say, the machinery malfunctioning due to the damages to the manufacturing plants. This assumption is what differentiates a BIA from a general risk management plan. In simple terms, the impact report is the precursor to the risk assessment and may be examined when all vulnerabilities of the firm are being determined during the risk assessment.
Types of BIAs
There are two main types of BIAs: (a) the comprehensive report which encompasses all the critical operations activities that must be revived within 24 hours of the disaster, and also (b) the preliminary report, which is an abridged version of the comprehensive report. Also, the preliminary report covers activities of lesser importance to business operations.
How do you do a BIA analysis?
Steps of the BIA
While there is no standard protocol for running a business impact analysis, and methodology can vary from company to company, there are specific steps of the BIA that most organizations commonly observe. These include:
- Firstly, obtaining the necessary, and accurate, information
- Secondly, the Evaluation of acquired information
- Then, a report detailing the findings of the evaluation
- Lastly, a presentation of the report to the executives of the company
Often, organizations choose to bring in third-party evaluators to run the BIA on the company.
Information for the BIA is collected through questionnaires, surveys, interviews with employees at each level of the organization, etc. Also, organizations may hold workshops and training sessions to aptly equip the personnel in charge of the most critical activities to deal with the aftermath of the disaster.
What are BIA components?
When conducting a business impact analysis, also, the components of the impact analysis report may differ between firms. The ones that are most commonly found across the board include:
- Dependencies; both internal and external
- Important records
- Service level agreements
- System Recovery Point Objectives
- How much the operations rely on internal and external systems
- Specialized equipment necessary to restore critical functions
- Backlog information
- Workaround procedures
- Critical staffing
- Finally, new systems, legal requirements, partnerships, etc. in the next 12 months.
Check the following reference articles to learn more about the BIA
- Business Impact Analysis (BIA) | IT Service Management Office. (n.d.). UCSF. Retrieved August 5, 2021, from (URL)
- Sliwa, C. (2020, November 21). business impact analysis (BIA). SearchStorage. (URL)
- Herrera, B. M., Herrera, M., & Herrera, M. (2017, February 8). 10 Elements in a Business Impact Analysis Report. MHA Consulting. (URL)
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