Business impact analysis is a tool that helps plan for the inevitability of consequences and their cost. It is another measure to combat risk.
Risk is always on the horizon and the better-equipped companies that prepare for it, the more likely they will be able to continue doing business in the future.
We are going to analyze what Business Impact Analysis is, how it works, its importance and how to implement it.
What is Business Impact Analysis (BIA) and Why Is It Important in 2022?
A business impact analysis is a structured process used by the organization to determine and assess the potential impacts of a disruption to critical business operations, due to disasters, accidents, or emergencies.
In a nutshell, it is a key element of a company’s business continuity plan and will allow you to see how your business would be affected if your business processes were disrupted by a business interruption.
While a business impact analysis is not required to comply with major data security frameworks (although it is a requirement for ISO 2 2301 compliance), it is important because it represents the first step in developing a strong business continuity plan. commercial for your business.
In addition, a business impact analysis will give you the tools to ensure you meet legal and data security requirements and recover from a business interruption while operating ethically and legally.
While individual departments can understand the effects of a broken process or function, you can’t fully understand those effects for your entire company until a business impact analysis is done and all that information is collected in one place.
The reason every company should include a business impact analysis is that it is part of any comprehensive plan to minimize risk. All businesses can be affected by accidents and emergencies.
These can include vendor failures, labor disputes, utility failures, and cyber-attacks, not to mention natural or man-made disasters.
What Key Elements Are Included In a Business Impact Analysis?
What the business impact analysis looks at are the operational and financial impacts of a disruption to business functions and processes.
These include everything from lost sales and revenue, delayed sales or revenue, increased expenses, regulatory fines, and contractual penalties, to lost or dissatisfied customers and the delay of new business plans.
Business impact analysis operates under two assumptions:
a) Each part of the business depends on the continued operations of the other parts of the business.
b) Some parts of the business are more important than others and require more assignments when interruptions occur.
How to Perform a Business Impact Analysis (BIA) in 5 Steps
There is no single method for conducting a business impact analysis. It will be different for every business, and every business needs to customize its process according to the unique needs of its organization.
However, some components of a business impact analysis must be present for it to be successful.
To prepare for the actual business impact analysis work, your team, in collaboration with senior management, should define and document the objectives and scope of the analysis.
The departments that will be involved, how the information will be collected and stored, and the project schedule should be determined before beginning.
Collecting raw data about your business processes is the next step in your business impact analysis.
The two most common methods for collecting this data are interviews with the people who manage and run each process and a business impact analysis questionnaire. A business impact analysis questionnaire is the most effective method of collecting information. The list of questions that make up a questionnaire are:
- Name of process
- a detailed description of where the process is performed
- inputs and outputs of the process
- Resources and tools used in the process
- Process users
- Financial and operational impacts
- Regulatory, legal, or compliance impact
- Historic information
You can also give the survey to external business partners who may have information about this process or members of senior management who are involved or have an interest in it.
In short, you should have anyone performing or managing any part of the process complete the business impact analysis survey to create the most comprehensive plan possible.
Once you have collected all the necessary information about each business process, you can start the impact analysis.
Looking at each process, the business impact analysis team will analyze each process to determine three things:
- Which functions and processes are most important to the ongoing operation of your business?
- What human and technological resources does each process need to operate successfully?
- What is the recovery timeline for the process to work normally again?
If there is a process that you determine needs to be up and running within 12 hours to keep your business running, and your current resources can only get it up and running within 24 hours, that is an issue that needs to be addressed in the recommendations section of your business impact analysis.
Once all of this information has been analyzed and confirmed, you will prepare a business impact analysis report to present to senior management and other disaster recovery stakeholders.
This report is the most important result of your business impact analysis because it is what you will use to communicate your findings and recommendations to the people in your company who have the power to make changes to the disaster recovery process.
The final step in this process is to implement recommendations.
It should include recommendations updates and changes when you discover that any of your previous recommendations are not working as expected, new processes are implemented, or new departments are formed.
Your business is not a static entity, but it is changing and growing all the time, and your business impact analysis should change with it.
When organizations choose not to perform a BIA, some of the most common issues that occur that affect business continuity program performance include:
- Subjective recovery goals and confusion regarding recovery priorities
- Capacity gaps and inaccurate program scope
- Lack of justification for investments in preparation
Do you want this to happen to you?
Of course not… Therefore, prioritize a Business Impact Analysis for 2022.
Or let the MyITGuy experts help you with it.