Business Impact Analysis (BIA) is an important step to take in risk management and an essential component in an organization’s business continuity plan. It is a systematic process that evaluates and determines the potential effects of an interruption in business operations due to a disaster, accident or emergency. Read on to find out more about how a BIA works.
A BIA works to reveal any vulnerabilities a business might have in order to minimize risk. Once this is done, an impact analysis report is created describing the potential risks to the organization.
BIA also plays an important role in the disaster recovery plan. It can identify costs linked to failures like loss of cash flow, replacement of equipment, salaries paid for employees to catch up on work, loss of profits, etc.
Once this is established, the BIA then suggests a fund allocation as a measure to protect them. It serves as a starting point in disaster recovery, examining recovery time objectives (RTOs), recovery point objectives (RPOs) and resources and materials needed for business continuance.
There are no formal processes in place that dictate how a BIA is conducted, but here are some recommended steps businesses might want to take:
Evaluate collected information
Prepare a report to document findings
Present results to senior management
An organization may elect to outsource the BIA to a skilled third party to assess the effectiveness of the BIA. If this is the case, vendor management should make sure that whoever is brought in is familiar with the needs of the company and all that a BIA and risk management entails.
A detailed questionnaire or survey may also be developed to identify critical business processes, resources, relationships and other information that will help in the assessment of the potential impact of a disruptive event.
A BIA plays an essential role in keeping your business safe in the event of a disaster. Look into creating one for your company to protect your business from risks involving accidents, disasters, emergencies and more.