A business impact analysis (BIA) predicts the consequences of disruption of a business function and process and gathers information needed to develop recovery strategies. Potential loss scenarios should be identified during a risk assessment. Operations may also be interrupted by the
failure of a supplier of goods or services or delayed deliveries. There are many possible scenarios which should be considered. Identifying and evaluating the impact of disasters on business provides the basis for investment in recovery strategies as well as investment in prevention and
mitigation strategies. The BIA should identify the operational and financial impacts resulting from the disruption of business functions and processes. Impacts to consider include: The point in time when a business function or process is disrupted can have a significant bearing on the loss sustained. A store damaged in the weeks prior to the holiday shopping season may lose a substantial amount of its yearly sales. A power outage lasting a few minutes would be a minor inconvenience for most businesses but one lasting
for hours could result in significant business losses. A short duration disruption of production may be overcome by shipping finished goods from a warehouse but disruption of a product in high demand could have a significant impact. Use a BIA questionnaire to survey managers and others within the business. Survey those with
detailed knowledge of how the business manufactures its products or provides its services. Ask them to identify the potential impacts if the business function or process that they are responsible for is interrupted. The BIA should also identify the critical business processes and resources needed for the business to continue to function at different levels. BIA ReportThe BIA report should document the potential impacts resulting from disruption of business functions and processes. Scenarios resulting in significant business interruption should be assessed in terms of financial impact, if possible. These costs should be compared with the costs for possible recovery strategies. The BIA report should prioritize the order of events for restoration of the business. Business processes with the greatest operational and financial impacts should be restored first. Next steps: Business Continuity Plan and Information Technology Disaster Recovery Plan Business Disruption Scenarios
Business Impact Analysis (BIA)A business impact analysis (BIA) is the process of determining the criticality of business activities and associated resource requirements to ensure operational resilience and continuity of operations during and after a business disruption. The BIA quantifies the impacts of disruptions on service delivery, risks to service delivery, and recovery time objectives (RTOs) and recovery point objectives (RPOs). These recovery requirements are then used to develop strategies, solutions and plans. Download now: Build an IT Strategic Plan That You Will Actually Use Business continuity plans aid in your credit union’s ability to recover from disaster and maintain operations for members. Clearly, it’s an important set of contingencies within disaster recovery practices to keep in mind. Part of business continuity planning is having a business impact analysis (BIA). But what is a business impact analysis? And does your credit union need one? Business impact analyses are sets of data that form the foundation of a strong business continuity plan. These sets of information concern various effects and setbacks that might affect different business processes. As the name suggests, performing a business impact analysis serves to assess what type of impact a particular issue will have on a one of your business processes. Now, does your credit union need a business impact analysis? In short, yes. The BIA is the cornerstone of all of your credit union’s planning. The data you receive from it allows you to better understand exactly how long the specific system or process will be affected and what effect that will have on any related or interconnected systems. A comprehensive evaluation of threats--and what impact those threats might have--is the key to building an efficient pathway back to peak productivity. Your credit union might be impacted in several ways, so it’s best to gauge repercussions over several areas. Try to ask questions about different areas.
Speaking of recovery, recovery time is one of the most important things to be aware of when estimating business impact. Often, it may be easy to look at one aspect of recovery and then apply that specific recovery time to everything else that relies on it. For example, if the server is down, maybe you can get the server back up quickly. However, just because the server is back up doesn’t mean that the entire system is back online and ready to serve members, or that the staff is prepared. A reasonable recovery time objective has a broader valence: it encompasses one particular business function recovering all aspects of that business function. As with all things related to business continuity, business impact planning is always better when it’s tested. If you’ve ever cooked a meal, you’ll know that best results come from persistent testing of the recipe. You don’t want to over-salt, nor under-season, or leave something on the burner too long. Even tried-and-true recipes benefit from a little tweaking here and there to better fit the palates of the diners. If you wait until you serve the food to sample it, you may find that not everything tastes as you’d expect and it may not be to your liking. Similarly, with business impact planning, your credit union will be well served to test impact and recovery as you go. If you expect a certain impact and recovery to take four hours, run a test to see how long it really takes. If you can’t hit that four hour time, not only will you gain valuable insight as to what all you need to take into account in recovery, but you can also adjust your practices to reach your desired recovery timetable. Business impact analysis is extremely valuable for any credit union looking to best serve their members in any emergency event. By accurately profiling what effect various problems might have, you’ll get a clearer picture and build a better plan for recovery. Learn more about Business Impact Analysis:10 Common Mistakes Made When Developing Your Credit Union Business Impact Analysis How to Interpret Your Credit Union Business Impact Analysis Results What is a BIA in BCP?A business impact analysis (BIA) is a systematic process to determine and evaluate the potential effects of an interruption to critical business operations as a result of a disaster, accident or emergency. A BIA is an essential component of an organization's business continuity plan (BCP).
What is the objective of a BIA?A business impact analysis (BIA) identifies and analyzes your business functions then aligns IT appropriately with the business. The objective of the BIA is to identify the effects of a disruption of business functions and provide strategies to mitigate and minimize the risk to your business.
What are some functions that would be identified in the BIA?As part of a disaster recovery plan, a BIA is likely to identify costs linked to failures, such as loss of cash flow, replacement of equipment, salaries paid to catch up with a backlog of work, loss of profits, staff and data, and so on.
Why is a business impact analysis BIA an important first step in defining a business continuity plan BCP )?By analyzing different possible disruptions and their effect on critical business processes, a business impact analysis prepares organizations to more readily handle any emergency. A BIA is also the critical first step in developing an effective business continuity plan (BCP).
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