The Business Impact Analysis (BIA) is a critical component of a Business Continuity Plan (BCP). It helps organizations understand the impact of disruptive events on their business operations and ensures that recovery strategies are appropriately aligned with the organization’s needs.

Goal of BIA

• Objective: To create a document that helps understand the impact of disruptive events on business operations and guide recovery strategies.

Key Steps in BIA Development

1. Gathering Assessment Material
   • Organizational Charts:
     • Purpose: Determine functional relationships and dependencies within the organization.
     • Use: Helps in identifying key personnel, departments, and how they interact with each other.
   • Examine Business Success Factors:
     • Purpose: Identify factors critical to the success and operation of the business.
     • Use: Helps in prioritizing business functions and understanding what is essential for continued operation.
2. Vulnerability Assessment
   • Identify Critical IT Resources:
     • Purpose: Determine which IT resources are essential for critical business processes.
     • Use: Helps focus recovery efforts on key IT assets.
   • Disruption Impacts:
     • Purpose: Understand how disruptions affect business operations.
     • Components:
       • Maximum Tolerable Downtime (MTD): The maximum time a process can be disrupted before causing irreparable harm to the business.
       • Loss Quantitative: Measure financial losses such as revenue loss and repair expenses.
       • Loss Qualitative: Assess non-financial impacts such as loss of competitive edge or public embarrassment.
     • Classification: Impacts are often categorized as low, medium, or high.
3. Develop Recovery Procedures
   • Purpose: Outline procedures for recovering critical processes and IT resources.
   • Components:
     • Recovery Time Objectives (RTO): The target time by which a business process must be restored after a disruption.
     • Alignment: Ensure that RTO is less than MTD to prevent significant impact on operations.
4. Analyze Compiled Information
   • Document the Process:
     • Purpose: Create detailed documentation of the analysis and findings.
     • Components: Include process dependencies, recovery strategies, and impact assessments.
   • Identify Interdependencies:
     • Purpose: Understand how different business processes and IT resources are interrelated.
     • Use: Helps in identifying potential cascading effects of disruptions.
   • Determine Acceptable Interruption Periods:
     • Purpose: Define how long each critical function can be interrupted before severe consequences occur.
5. Documentation and Recommendation
   • Purpose: Finalize the BIA document with recommendations based on the analysis.
   • Components:
     • Documentation: Include detailed findings, impact assessments, and recovery strategies.
     • Recommendations: Provide actionable steps for improving resilience and recovery capabilities.

Key Concepts

• Maximum Tolerable Downtime (MTD): The maximum period that a business process can be down without causing significant harm to the organization.
• Recovery Time Objective (RTO): The target time for recovering a critical process after a disruption.
• Quantitative Loss: Measured in financial terms (e.g., revenue loss, repair costs).
• Qualitative Loss: Non-financial impacts (e.g., reputation damage, loss of customer trust).