Business impact analysis in a nutshell

 2017-01-25 11:50 AM by
Business impact analysis in a nutshell

Firstly, what is business impact analysis?

"A business impact analysis (BIA) is a process that identifies and evaluates the potential effects (financial, life/safety, regulatory, legal/contractual, reputation and so forth) of natural and man-made events on business operations." - Gartner.

 

What that's really saying is that a business impact analysis involves trying to understand your business environment and what affects it, and then making plans for when events that impact the ongoing function of your business occur.

A business impact analysis is really one of the cornerstones of business continuity planning.

Business continuity is the process of planning and the philosophy of constantly improving one's business.

As a small business owner, one is actually constantly doing informal business impact analysis exercises. Essentially, formalising these and then documenting the actions and responses that need to be taken is creating a business continuity plan.

So, here's an example of a business impact analysis: a car wash company in the East Rand of Johannesburg determines the potential effect of the Rand Water disaster on their business and then plans for that scenario. The answer might be to sink a borehole and have adequate water tanks on their premises to deal with a severe water outage as a result of local authority incompetence. This is not something one would ever have considered planning for, but I am sure a lot of businesses out there are now actively doing formal and informal business impact analyses in areas we had never expected to as our infrastructure continues to take strain for a number of reasons.

Having business impact analysis sessions in your business is a way to build your business continuity plans. It is important to be as inclusive as possible about who attends the sessions. The people in the front line of your business may not be managers but may have great insights into what actually happens on a day-to-day basis. As such, they can inform you and provide really telling details that can improve a business continuity plan.

A business impact analysis will be geared towards events affecting any number or combination of the following areas:

Locations - where we operate from
Assets - used to keep the business running
People - our staff
Services - essential services provided to our business
Service providers - the entities that provide the services
Your business impact analysis will build a continuity plan around a scenario that is affected by one or more of the above.

What kind of scenarios are we talking about?

Each business is unique in its own way, but there are a number of commonalities that each business should plan for. The unique areas of a business and the business impact analysis required for these are in the domain of the individual businesses.

Common scenarios for which a business impact analysis needs to be completed and then formalised into the business continuity plan are:

Loss of data
Loss of electrical power
Loss of telephony services
Loss of internet connectivity
Virus or hacker attack on infrastructure in office and web facing

Theft of equipment
Theft of vehicles
Office break-in
Fire or flood in location
Loss of location and need for alternative locations
The list is endless so how do you plan for these? You work out the scenarios, work out the solutions that will keep your business going in the face of any of these scenarios, document these in a business continuity plan, appoint a business continuity manager and spend a lot of time communicating.

Business continuity should be an active part of your business, that way you will be able to sail over the speed-bumps of any disaster and enable your business to cope and manage these with minimum downtime or hassle.

IronTree is coming out with a cloud-based business continuity system that will enable everyone from the smallest to the largest businesses to document their business impact analysis into a live responsive business continuity plan that is hosted online and packed with features to assist your business when it really needs it.