Posted on May 28, 2020 | by | Posted in Uncategorized
Great businesses know how to weather rough storms and it’s through Business Impact Analysis (BIA) that they can prepare for unforeseen events. In essence, a BIA is a systematic process that outlines the impacts of disruption in business functions to establish sound recovery methods. Think of BIA as another arrow in your quiver in the quest of battling risks. No matter how smooth the business is operating, the risks are always on the horizon and it’s the well-prepared businesses that are able to mitigate them efficiently. This guide is intended to cover the basics of a Business Impact Analysis so that businesses can develop effective recovery strategies to use in the face of emergency situations.
Assumptions in BIA
In general, a Business Impact Analysis operates under two key assumptions:
For example, we can assume that the operation of a company’s production line depends on the functions of the Human Resources department. If the HR were to fail in the recruitment of workers, the production will decrease. The same thing applies to the financial department where production will suffer when they fail to purchase materials or unable to process salary payments.
The possible loss scenarios for each company will vary and this instance, conducting a risk assessment will help identify those scenarios. From there, the company can perform BIA to better manage such risks for improved recovery planning.
How to conduct BIA in 5 steps
Step 1: Establish the scope of your BIA
The first step in conducting a BIA is to map out your organisation’s critical business functions. If you operate a large company, it may not be necessary to include every function in your BIA. What you should do is identify which parts of your business are the most important and focus on those instead. We recommend keeping your scope as small and manageable as possible. For large organisations, this means keeping your review on the top 10 most significant units or departments.
After identifying the departments, you want to select the right people to interview. These individuals should be doing hands-on work and are likely to have the most knowledge about your company’s critical functions and vulnerabilities. From there, set up a timeline for finalising your BIA. This will keep everything on schedule and help you with the next two steps.
Step 2: Determining the value of the BIA
When conducting a BIA, it’s important that you and your organisation understands the need for business continuity planning. However, not all of your staff may understand the value of BIA specifically so after you’ve established the scope, make a detailed presentation to your management team. This helps everyone realise the amount of investment that goes into the BIA process that will stem from all the hard work and information gathering you and your team have put up.
Step 3: Preparing for the BIA interviews
The next step is to schedule the BIA interview according to the timeline you’ve set up. Allow for at least 2 hours to interview the individuals whom you’ve chosen to highlight your company’s most important functions. Ask them about the processes they handle and the potential impacts it can have on the business should a disruption occur.
Before interviewing, try gathering as much information as possible on the sector you’ll be reviewing like a general overview of the processes, the number of people who work in it, and so on. This streamlines the whole interview process and saves you plenty of time in completing the BIA.
Step 4: Host BIA meetings
Hosting a BIA meeting allows you to ask a series of questions from your management team that will help formulate your company’s recovery strategies should a critical function go down. To do this, you’ll need to ask the following questions:
You want to recap all the answers to these questions with your management team to ensure all information is accurate.
Step 5: Preparing a report
The final step in a BIA is to review all of the data you’ve gathered and evaluate if all the critical functions were highlighted correctly. Compile all of the information into a single report and make sure to include the following:
Once the report is complete, host a final BIA meeting with your management team and review the entire BIA as a whole. Use this as an opportunity to raise questions and open up a recommendations board to ensure everyone is on the same boat. Having a general consensus is key to executing the proposed recovery strategies and mitigate potential risks in the future.
Conducting a Business Impact Analysis is incredibly useful for any company to ensure continuous operations. By following this guide, you’ll be able to create a systematic process that eliminates arbitrary decision making in times of business disruptions.