What is a Business Impact Analysis (BIA) —and why do you need one?

BurntBusinessSo you’ve bought into the need for a BC/DR plan, and you’ve identified and prioritized the risks your organization could face. That means it’s time for the next step—determining the impact those risks would have on your business if any of them materialized.

How would your company be affected? What business processes would be interrupted, and what would those interruptions mean? Let’s say everything was disrupted at once—what would you address first? And then what?

These and other make-or-break questions are critical to resolve in an emergency. The good news is they can be answered ahead of time—with a business impact analysis.

What exactly is a business impact analysis?

A business impact analysis (BIA) is a way to—wait for it—analyze the potential impact of risks on your business. By performing a thorough, methodical BIA before a crisis occurs, you’ll be better able to:

  • Identify all of your business functions, from the big stuff at the organization level, all the way down to what happens in individual divisions and departments
  • Determine which processes are vital to your company’s operation and which can be safely ignored
  • See where dependencies exist between processes and resources and uncover important functions you may have overlooked (because, for example, a critical process depends on something you had considered trivial)
  • Uncover and categorize the different impacts a disruption could have on your organization— including financial, operational, legal—on your customers, and on your reputation
  • Estimate the time your organization could go without a particular process before business viability was threatened (maximum allowable downtime, or MAD)
  • Learn what it would take to recover processes to a minimum acceptable level within the MAD window
  • See which resources that would be necessary to restore your company’s most critical processes if a disruption occurred

Conducting a BIA is about setting priorities; identifying which processes are most vital, gauging how long you could go without them, and determining how best to get the lights back on if things went wrong.

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