[BCM] [Damanat] [E2] [C4] [P3] Business Impact Analysis

 Implementing the Business Impact Analysis Phase in the Saudi Mortgage Guarantees Services Company BCM Planning Methodology 

 

Introduction

This chapter is the 3rd instalment of the BIA planning process and will cover:

• Part 7: Identifying Impact Areas.

• Part 8: Illustrative BIA Impact Scale.

• Part 9: Impact-over-Time Assessment Template.

Part 7: Identifying Impact Areas

The purpose of the Business Impact Analysis (BIA) is to evaluate the consequences of disruption consistently across all Critical Business Functions (CBFs).

To achieve this, Damanat should adopt a standard set of impact areas that allows different business units to assess disruption using the same evaluation criteria.

Although financial losses remain important, they should not dominate the assessment.

As a regulatory organisation supporting Saudi Arabia's housing finance ecosystem, Damanat must also consider operational, regulatory, legal, reputational and public-interest consequences.

The impact areas should be approved by senior management and used consistently throughout all Business Impact Analysis workshops.

1. Financial Impact

Financial impacts assess the direct and indirect economic consequences arising from disruption.

Typical considerations include:

• Lost guarantee fee income.
• Emergency operating expenditure.
• Additional staffing costs.
• ICT recovery expenditure.
• Contractor and specialist consultancy costs.
• Legal expenses.
• Compensation or settlement costs.
• Increased borrowing or financing costs.
• Supplier penalties where contractual commitments cannot be met.

Although financial impacts are measurable, they should not be considered in isolation. A relatively modest financial loss may still have significant regulatory or reputational implications.

2. Operational Impact

Operational impacts measure Damanat's ability to continue delivering mortgage guarantee services.

Examples include:

• Suspension of mortgage guarantee processing.
• Delays in borrower assessments.
• Inability to approve guarantees.
• Increasing application backlogs.
• Delayed guarantee registration.
• Reduced customer service capability.
• Reduced management oversight.
• Loss of operational efficiency.

Operational impacts often escalate rapidly because delays in one process affect multiple downstream activities.

3. Legal and Regulatory Impact

As a regulated financial institution, Damanat must comply with statutory obligations and supervisory expectations.

Potential impacts include:

• Failure to meet regulatory obligations.
• Delayed mandatory reporting.
• Breach of contractual obligations.
• Non-compliance with governance requirements.
• Failure to retain required records.
• Delayed regulatory submissions.
• Increased supervisory scrutiny.
• Exposure to regulatory enforcement.

For many CBFs, legal and regulatory consequences may become unacceptable before significant financial losses occur.

4. Reputation and Stakeholder Confidence

Reputation is one of Damanat's most valuable organisational assets.

Disruption may result in:

• Loss of confidence among participating financial institutions.
• Negative media attention.
• Public concern regarding service reliability.
• Reduced confidence from government stakeholders.
• Damage to relationships with housing finance partners.
• Increased customer complaints.
• Reduced investor confidence where applicable.

Reputational damage often continues long after operational recovery is complete.

5. Social and Public-Interest Impact

Damanat contributes to the stability and accessibility of Saudi Arabia's housing finance system. Consequently, disruption may create wider economic and social consequences.

Examples include:

• Delayed access to housing finance.
• Reduced confidence in mortgage guarantee programmes.
• Disruption to government housing initiatives.
• Increased uncertainty for borrowers.
• Reduced support for participating financial institutions.
• Delayed economic activity associated with housing development.

These impacts reinforce the importance of restoring customer-facing services promptly.

6. People Impact

The BIA should also evaluate consequences affecting employees and contractors.

Examples include:

• Unavailability of specialist personnel.
• Excessive overtime.
• Staff fatigue.
• Reduced decision-making capability.
• Increased operational errors.
• Stress arising from prolonged recovery operations.
• Inability to maintain segregation of duties.
• Reduced supervisory oversight.

People's impacts become increasingly important during extended recovery operations.

7. Assets, Technology and Information Impact

Many operational activities depend upon technology and information.

Potential impacts include:

• Failure of business applications.
• Database corruption.
• Loss of communications.
• Loss of electronic records.
• Cybersecurity incidents.
• Compromised confidentiality.
• Compromised data integrity.
• Loss of audit trails.
• Inability to retrieve historical guarantee information.

Technology impacts frequently cascade across multiple Critical Business Functions simultaneously.

8. Third-Party and External Dependency Impact

Damanat relies upon numerous external organisations to deliver its services.

Potential impacts include:

• Credit bureau service failure.
• Banking interface disruption.
• Cloud service outage.
• Telecommunications failure.
• Property valuation delays.
• Supplier insolvency.
• Payment processing interruption.
• Outsourced ICT support failure.

The BIA should identify these dependencies because recovery capability may depend on organisations outside Damanat's direct control.

Summary of Recommended Impact Areas

 

Impact Area	Primary Assessment Focus
Financial	Economic consequences and recovery costs
Operational	Ability to deliver mortgage guarantee services
Legal and Regulatory	Compliance with statutory and supervisory obligations
Reputation	Stakeholder confidence and organisational credibility
Social and Public Interest	Housing finance ecosystem and economic consequences
People	Staff availability, competence and welfare
Technology and Information	Availability, integrity and confidentiality of systems and data
Third-Party Dependencies	Supplier and external organisation resilience

Senior Management should approve the impact categories before detailed assessments commence to ensure enterprise-wide consistency.

Part 8: Establishing the Impact Scoring Scale

To promote consistency across all business units, Damanat should adopt a standardised impact-scoring methodology.

The scale should provide clear descriptions for each level of impact while recognising that not all consequences can be measured financially.

The following five-level scale is illustrative and should be validated and tailored by Damanat before implementation.

Table BIA 4.3: Illustrative BIA Impact Scale for The Saudi Mortgage Guarantees Services Company (Damanat)

 

Impact Score	Impact Level	General Description	Illustrative Consequences for Damanat	Indicative Management Escalation
1	Very Low (Insignificant)	Minimal operational disruption with negligible consequences.	Minor processing delays managed within normal operations.	Operational Supervisor
2	Low (Minor)	Limited disruption affecting one business unit with manageable consequences.	Short-term backlog, limited customer enquiries, no regulatory concern.	Department Manager
3	Moderate	Significant disruption requiring management intervention.	Delayed guarantee approvals, increased backlog, moderate reputational concern.	Head of Department
4	High (Major)	Serious disruption affecting multiple business functions and requiring executive coordination.	Significant interruption to mortgage guarantee services, heightened regulatory attention, adverse stakeholder impact.	Executive Management
5	Very High (Severe)	Enterprise-wide disruption that creates unacceptable operational, regulatory, or reputational consequences.	Inability to perform core statutory functions, widespread stakeholder impact, significant regulatory scrutiny, and major reputational damage.	Chief Executive Officer / Crisis Management Team / Board

Application Principles

The scoring scale should:

• Apply consistently across all CBFs.
• Consider both quantitative and qualitative impacts.
• Evaluate financial and non-financial consequences.
• Recognise statutory and public-interest obligations.
• Support transparent management decision-making.
• Facilitate comparison between different business functions.

The numerical thresholds for each level (e.g., financial values or backlog volumes) should be defined separately by Damanat and approved by Senior Management.

Part 9: Assessing Impacts Over Time

Business impacts rarely remain constant throughout a disruption. Some consequences occur immediately, while others emerge only after statutory deadlines are missed, customer backlogs accumulate or supporting services begin to fail. For this reason, the Business Impact Analysis should evaluate impacts across progressively longer periods of disruption rather than relying on a single assessment point.

For Damanat, assessing impacts over time enables management to determine:

• When disruption becomes unacceptable.
• When manual workarounds are no longer sustainable.
• When regulatory obligations are at risk.
• How rapidly customer and application backlogs grow.
• When recovery resources must be deployed.
• Appropriate Maximum Tolerable Periods of Disruption (MTPDs).
• Appropriate Recovery Time Objectives (RTOs).

Table BIA 4.4: Impact-over-Time Assessment Template

CBF	Less Than 4 Hours	4–8 Hours	8–24 Hours	1–2 Days	3–5 Days	1 Week	More Than 1 Week	Impact Escalation Point
CBF-1 Mortgage Guarantee Origination	Minor operational delays; manual processing feasible	Backlog begins increasing; borrower processing slows	Significant application backlog; customer enquiries increase	Regulatory reporting and service commitments may be affected	Financial institutions experience prolonged delays; operational capacity is strained	Significant reputational impact; manual workarounds unsustainable	Enterprise-wide consequences requiring strategic intervention	Approximately 24–48 hours (illustrative; subject to validation)
CBF-8 Information Technology Services	Minor degradation of ICT services	Business applications unavailable; manual workarounds activated	Multiple CBFs affected	Operational disruption across departments	Recovery complexity increases significantly	Major organisational impact	Sustained enterprise disruption	Approximately 8–24 hours (illustrative)
CBF-9 Information Security and Cyber Resilience	Security monitoring degraded	Increased cyber risk exposure	Potential compromise of information assets	Regulatory and operational consequences escalate	Significant reputational consequences	Long-term recovery effort required	Severe enterprise impact	Immediately following prolonged loss of security capability

Key Considerations

The progression of impacts is rarely linear. For example:

• Some impacts arise immediately following system failure.
• Others remain stable while manual workarounds continue.
• Regulatory impacts may escalate sharply when reporting deadlines are missed.
• Financial impacts often increase gradually as operational disruption continues.
• Reputational damage may persist even after business services have resumed.

Consequently, impact-over-time analysis provides the evidence required to establish realistic recovery priorities, recovery objectives and resource requirements.

The next instalment will cover:

• Part 10: Determining the Maximum Tolerable Period of Disruption
• Part 11: Determining Recovery Time Objectives
• Part 12: Determining Recovery Point Objectives
• Part 13: Establishing Minimum Business Continuity Objectives