Business impact analysis (BIA) steps include; establishing the business unit impacted, identifying the specific functions, evaluating the impacts, and documenting the findings. BIA is critical for all businesses, especially when undergoing significant changes. BIAs help organizations understand and demonstrate the potential consequences of disruptions to their regular operations as part of the overall risk management process by assessing what is important to the organization and understanding the potential impacts of various incidents or events.

Business impact analysis (BIA) is a process businesses use to identify and assess the potential impacts of disruption on their operations. By understanding the possible risks and vulnerabilities an organization’s business faces, organizations can put in place mitigating plans and protections to help keep the company running in an unexpected incident.

Every business should conduct a business impact analysis, or BIA, to help identify and assess potential impacts to the organization in the event of an unexpected disruption. By taking steps to understand your company’s vulnerabilities, you can put into place mitigating controls and build a plan to ensure that business continuity is maintained in the face of any challenge.

It is a process of identifying and assessing the potential impacts that a disruption (e.g., natural disaster, power outage, cyber-attack) could have on an organization’s ability to continue conducting business. The goal of conducting a business impact analysis is to develop mitigation plans and strategies to reduce the impacts of such disruptions. In this post, we’ll walk you through the steps of conducting a BIA for your business.

What is the Purpose of the Business Impact Analysis?

-To identify, prioritize and assess the potential impacts of a disruption to normal business operations on the strategic objectives of an organization

-To provide decision-makers with options for mitigating or managing risks and preserving business value in the event of a disruption

-To help inform planning for continuity of operations in the event of a disruption.

The goal is to help organizations protect their critical operations, reduce the impact of incidents, and resume normal operations as quickly as possible. Additionally, identify and assess the potential impacts to the organization if one or more key services are unavailable. This information can then help prioritize and determine which services are most critical to the organization.

A BIA typically includes an assessment of the potential impacts to people, property, infrastructure, information, and the environment. It can also identify any possible critical dependencies that need to be considered when developing a disaster recovery plan. Organizations should review their BIA on an annual basis or whenever there is a significant change in their business operation.

A BIA should be conducted regularly, as new risks are identified, and changes occur in the business environment. It’s also essential to update the BIA after major disruptions to accurately reflect the organization’s current state.

A BIA typically includes an assessment of risks and vulnerabilities and a review of potential impacts to people, processes, systems, and data. It may also estimate the financial costs associated with mitigating those impacts.

If your company’s heating system goes out in the middle of winter, it may be inconvenient but not a critical failure. However, if your POS system goes down, the financial impact will be more severe over time.

Challenges of Performing a Business Impact Analysis

  1. Determining the scope of the analysis can be difficult because it is not always clear what should be included in the analysis. The BIA’s scope should be based on the Goldilocks Principle: It must be just right. Actionable outcomes will be impossible to define if the scope is too broad. If the width is inadequate, all processes will be designated as highly essential, and the resulting financial consequence analysis will be granular.
  2. Identifying and assessing potential impacts can also be problematic because it can be challenging to predict how an event or incident might affect a business.
  3. Developing mitigation strategies – Once the impacts have been identified, it is necessary to develop plans to mitigate those impacts.
  4. Communicating the analysis results – This can be challenging because it is often necessary to present complex information clearly and concisely.

Without buy-in from senior executives, the BIA’s recommendations will not be adequately implemented throughout the company. The success of your BIAs will also rely on the participation and input of mid-level managers and front-line staff. If they don’t take their involvement in and information to the BIA process seriously, the outcomes will be incorrect.

Factors to Consider in Assessing Disruptions

There are a variety of factors that should be considered when assessing the potential impacts of disruption, including:

-The nature of the disruption (e.g., duration, severity)

-The type of business operations being conducted (e.g., critical or non-critical functions)

-The dependencies on other organizations or infrastructure systems

-The time required to recover from the disruption.

business continuity management

Steps in Business Impact Analysis

Establish the business objectives that the event or situation will impact under analysis.

Business Unit Overview

  • Explain the functions of your unit/division in a few paragraphs.
  • What are the unit’s normal work hours? How many people are currently employed in the department?
  • What is the unit’s average workload (e.g., the number of customers registered, audits completed, timesheets entered)?
  • Where applicable, relate the work volume mentioned above to Shillings or revenue. (Revenue collected)
  • Is there a maximum volume or other significant periods? Is this the case? (e.g., June return filing, payments finalized at the end of the month)

Identify the specific functions or operations of the business that will be affected by the event or situation.

Critical business processes

The unit/division’s key business processes should be identified and described. For each procedure, define Recovery Time Objective (RTO). RTO The Recovery Time Objective (RTO) is when the process will take to be restored following a catastrophe. The Recovery Time Objective (RTO) estimates how long the procedure may be down.

Also, identify a Recovery Point Objective (RPO) for each process. RPO is The tolerance of data loss, measured in terms of time before a procedure is significantly impacted, is known as the acceptable level of data loss.

Key Business Process Recovery Time Objective* Recovery Point Objective** Maximum Tolerable Period of Disruption*** Can this be performed manually? For how long? ****

Evaluate how the event or situation will impact each business objective and function.

Identification of Regulatory, Legal, or Service Level Requirements

Describe any regulatory, legal, or customer service level constraints (e.g., Acts, Accreditation) that would be impacted if a disruption disrupted business unit operations.

Identification of Vital Records

Any data needed to enable fundamental business procedures in day-to-day operations is a record. Vital records are critical for operating and recovering a company unit, division, or location. Vital records can be in various formats, including tapes, CD-ROM disks, microfilm/fiche, hardcopy papers, reports, reference materials. If necessary, use many pages.

Document the findings of the impact analysis in a clear and concise report.

  • The report’s executive summary, scope, objectives, methodology, discussion of findings, recommendations, and appendices with supporting documents such as the survey(s) utilized should all be included.
  • Define any technical lingo, clarify the concepts presented, and appropriately label graphs and charts with quantitative data.

Post-BIA actions

Once the BIA is completed, the process does not stop there; however, the real fight has only just begun in many vital respects.

The BIA is not only a descriptive document, but it is also an impact analysis tool that offers valuable data for ongoing risk evaluation and contingency planning.

  • BIA’s suggestions are critical, and they should ideally result in additional actions such as a follow-up gap analysis or feasibility study.
  • The BIA may provide a snapshot of the company’s potential financial liabilities and crucial operations at one point in time. To generate new insights, be prepared to do BIAs annually because no business is static.


An analysis of the impacts in your organization is critical to understanding how you can better prepare for disruptions. As part of this process, it’s essential to identify what functions are impacted and evaluate the potential consequences. A BIA should be conducted at critical points where there might be significant changes so that an organization can understand its risks before they become realities. If you’re interested in learning more about BIAs, contact us today! Our experts will thoroughly assess how we can minimize risk through careful planning using our expertise in business impact analyses (BIA).


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