What is Business Impact Analysis?

Business Impact Analysis or BIA refers to the process of identifying an organization’s Critical Business Functions (CBFs) and analyzing the potential disruptive impact to the business. The BIA can be used to:

Assess the impact of a disruption to any functional area or business operations within the organization
Determine the extent to which key functional and operational dependencies exist within the organization
Establish the priorities and sequence in which critical IT applications and key business functions should be restored

Objectives

The objectives of a BIA are to:

Determine the criticality of individual business functions in the organization
Determine the impact of a disruption on CBFs, e.g. financial and non-financial losses
Determine the tolerable limits of failure or loss of each CBF
Determine the minimum resources to be allocated to recover and resume the CBFs
Determine the sequence of recovering CBFs in the event of a disaster
Identify the inter- and intra-dependences among the CBFs
Identify the vital records needed to support the resumption and recovery of the CBFs

Tasks

The tasks to be led by the BCP Manager (Organization BCM Coordinator) and completed within the BIA phase include:

Establish business criticality/ impact criteria using BIAQ
Prioritize the importance of each business unit vis-à-vis established criteria
Consolidate findings and rankings
Present results to the Executive Management to confirm critical classifications and priority listings

Expected Deliverables

The expected deliverables in a typical BIA phase are:

Detailed report on findings (approved by the Executive Management) containing:
- Prioritized Critical Business Functions
- Classification of Criticality
- Tolerable Limits
- Restoration Priority
Impact analysis (both quantitative and qualitative) of unavailable business functions, i.e. extent of problems and damage arising as a result of those business functions becoming unavailable
- Minimum resources needed to recover the prioritized Critical Business Functions

What Does BIA Development Process Entail?

The entire BIA process involves the following steps:

Gather Information

Design a BIAQ
Gather initial information about business functions, support systems, and IT applications through the use of BIA Questionnaires

Verify & Analyze Information

Validate the content of the submitted BIAQ with Business Unit (BU) BCM Coordinators
Conduct face-to-face interviews with BU BCM Coordinators to verify the accuracy of the information submitted
Analyze information to determine priorities for recovery of business operations, systems and IT applications
Establish a Recovery Time Objective (RTO) for each CBF, i.e. time taken from disruption until recovery of operations

Document & Present Findings

Prepare the executive summary and BIA report
Include recovery priorities supported by graphs, charts, and other visual aids
Present findings and recommendations to the Executive Management in written and oral reports
Update the Executive Management on the subsequent steps in the BCM planning process

Reference

Goh, M. H. (2021). Conducting Your Impact Analysis for Business Continuity Planning. Business Continuity Management Planning Series (3rd ed.). Singapore: GMH Pte Ltd.

Extracted from "Chapter 2: What is Business Impact Analysis?"

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