A Business Impact Analysis (BIA) entails the procedure of identifying the essential business activities and required resources to ensure continued operation in the event of a business function or process interruption. It predicts the consequences of business disruption and collects the necessary information for recovery (Huang et al., 2020). Organizations use the BIA in developing and implementing practical business continuity plans. Companies that have effectively implemented the business impact analysis can recover their operations notwithstanding the condition or circumstance (Huang et al., 2020). The development of an operational BIA incorporates the establishment of component priorities, determination of component reliance and dependency and informing personnel of their roles in the recovery strategies.
Methods for Establishing Component Priorities
There are many ways involved in developing component priorities during BIA. The identification of business functions and processes is essential in establishing the component priorities. This includes the determination of the organization’s business activities and processes to identify its goals. It specifies the departments that are responsible for ensuring the procedures are completed effectively. Furthermore, it indicates the amount of time required to accomplish the various business tasks and processes. The business functions of an organization include purchasing, human resources, marketing, production, researching and accounting and finance. Business functions and procedures are essential in establishing component priorities since they describe the business operations that are being analyzed. They also play an important role in BIA by providing ways in which the assessment is going to be conducted.
Moreover, BIA scenarios and components have a significant duty in developing component priorities. There are several components of a business impact analysis; the exploratory component of BIA determines the weaknesses of the business processes and functions. It entails identifying both short-term and long-term risks that may arise during the execution of business processes and operations (Hassel & Cedergren, 2021). These risks may include machine breakdowns, power failures, employee nonattendance, property damages and failure of any other necessary factors for conducting the business operations. On the other hand, the planning component develops recovery measures that can be implemented to reduce the potential risks to the business operations. For instance, an analysis of what happens in varied scenarios may be applied to gather information on nature and possible solutions to potential threats. Furthermore, the planning component develops procedures that can be applied to alleviate the risks if they emerge.
The financial and service impact of components not being available is another business analysis aspect that is also used to establish component priorities. This is due to the ability of financial and service impact analysis to deliver detailed information that is related to possible monetary effects or economic consequences of a specific component. The financial and service implications consist of customer dissatisfaction, high expenditure rates, contract penalties, regulatory fines and rescheduling of novel business plans (Huang et al., 2020). They are essential in indicating the effects to the business functions if the threat manifests itself and gives solutions to the company’s internal and external impacts.
The recovery time frameworks are a group of significantly important initiatives in addressing the recovery time necessities, such as the maximum amount of time business operations can continue when specific business processes fail. They assist the organization in identifying the highly essential short-term, medium-term and long-term intervention procedures that need to be implemented (Paquin, 2018). Furthermore, the recovery time frameworks provide the best ways of reducing the time consumed while preventing business interruptions.
Methods for Determining Component Reliance and Dependencies
Business impact analysis needs to address component dependencies and reliance. The development of BIA is surrounded by the notion that all business parts are reliant on each other, and hence each asset is equally significant as the rest. Component dependencies consist of necessary inputs needed in improving business operation efficiency. They incorporate the resources required for the effective functioning of the component (Paquin, 2018). The component dependencies ensure workflow is efficient in an organization. The identification of component dependencies supplements the whole business impact analysis process and supports the threat recovery strategy. The determination of component dependencies requires identifying the financial insinuations of every organization associated with the company.
Moreover, a practical business impact analysis should have the ability to determine the essential resources that will be needed in the process of recovering from a disaster. All of the necessary resources need to be measured monetarily. During the development of BIA, there is an estimation of the amount of finances the business will be required to provide to reduce the potential risk or prevent damages caused by a disaster. To improve the efficiency of the procedures indicated in the BIA, the identified estimate of resources must be realistic and affordable by the organization (Paquin, 2018). There are various resources that need analysis, including vital records, data files, equipment, staff and components of the system.
In addition, human assets are very important in reducing the impact of a disaster within an organization. The development of a business impact analysis requires the skills of a recovery coordinator. This person is responsible for guaranteeing that the system is effectively managed and is successful in accomplishing its task (Paquin, 2018). Several other human assets play a significant role in the establishment of a BIA. The human resources include the security officer, the facility manager, the information recovery team, the risk management officer, the chief financial officer and the management personnel of the various affected departments of the organization.
Moreover, human assets are crucial since they provide the organization with talent, experience, recovery skills and knowledge. The staff with skill and talent effectively determine the necessary means to prevent or control a disaster while the experienced personnel act as a source of insight into the situation. Furthermore, the human assets are in charge of the entire process since they ensure the financial requirements are met (Paquin, 2018). They also develop effective and cost-efficient intervention measures and procedures, and they share comprehension on the means of preventing the occurrence of a similar situation in the future.
Recommendations
The involvement of all organization personnel is essential in the development of a business impact analysis. This is because the involvement guarantees that every sector of the business is included in the BIA. Moreover, through the participation of external personnel who are not part of the business, the organization is able to improve the effectiveness of the established disaster recovery strategies (Paquin, 2018). These external experts, including business consultants, are also crucial since they are skilled and experienced and are therefore able to prevent or reduce the amount of business disruption a disaster can cause to the organization. In addition, education of all organization members on the business impact analysis is necessary to ensure they know the role they are required to play when recovering from a business interruption.
References
Hassel, H., & Cedergren, A. (2021). Integrating risk assessment and business impact assessment in the public crisis management sector.International Journal of Disaster Risk Reduction, 56, 102-136. Web.
Huang, Y. H., Chang, W. R., Cheung, J. H., Lee, J., Kines, P., & He, Y. (2020). The role of employee perceptions of safety priorities on safety outcomes across organizational levels. Ergonomics, 1-30. Web.
Paquin, C. (2018). Modelling environmental effect dependencies with principal component analysis and bayesian dynamic linear models(Doctoral dissertation, École Polytechnique de Montréal). Web.