Business Impact Analysis
Option #1: Community Resilience and the Private Sector
Write a paper outlining the process of conducting a business impact analysis. Describe which of the steps you feel are most important.
Your paper should be 4-5-pages in length and conform to APA guidelines in the CSU Global Writing Center. (Links to an external site.) Include at least two scholarly references in addition to the course textbook. The CSU Global Library (Links to an external site.) is a good place to find these references.
Business Impact Analysis
A business impact analysis (BIA) is an inherent tool entailing foundational elements that evaluate risks associated with operating a business and provide its long-term view. Such an analysis Helps companies in preparing for any foreseen trends that could easily impact their profitability. BIA serves a great purpose of identifying critical processes by setting up recovery strategies to assure business continuity and deliver on its promises regardless of any disruptions (Păunescu et al., 2018). Ideally, a BIA predicts certain business consequences emanating from the disruptions, processes, and systems. It is paramount for any successful company to make intelligent and well-timed actions and decisions. These inherent decisions lay a foundation for gaining profit and market dominance, achieving its objectives, and positively impacting people (Sadgrove, 2016). Furthermore, a business must be prepared to respond effectively to any disruption and plan for any consequential inevitability and associated costs. As risks are always on the horizon, better-equipped businesses need to discern and prepare adequately for them and know how to conduct a proper business impact analysis to continue their operational resiliency in the future.
Process of Conducting a BIA Analysis
Although the process of conducting a business impact analysis can be daunting, the following are key steps to achieve this. The first step is to plan how the whole process will be conducted. This entails considering and regarding the process as a project needs to be planned. Similar to any typical project, a project plan that includes the scope of the analysis, its objectives, and the stakeholders need to be composed. A clear and well-written project plan is essential in providing a clear path for an effective BIA by enabling stakeholders to comprehend their responsibilities and the required resources (Graham & Kaye, 2015). At this juncture, one needs to organize the various distinct pieces of the BIA to allow easier access to and understanding of the information needed, facilitating effective actions.
The second step is to organize the business impact team. A suitable project team consisting of trusted individuals, either current employees or outsourced members, needs to be formed to carry out the analysis. The business impact team should include an IT professional, project manager, executive sponsor, and manager in charge of continuity planning alongside being equipped with thorough knowledge regarding the particular business. The team will prepare for the work appropriately by defining and documenting the scope and objectives of the impact analysis (Faertes, 2015). Also, the selected team will liaise with upper management to determine the departments that will be involved, how the required information will be gathered and stored, and the project timeline. Notably, some instances may recruit a third party to perform the analysis to ensure accurate results. The team should have sufficient experience to work through the most common risks companies face and the best ways to avert them.
The next step is the information gathering process, which mostly involves using a detailed questionnaire and BIA interviews to survey the desired parties. The surveys and interviews provide useful insights into the business processes to key stakeholders about potential consequences in a better manner if the business functions are interrupted (Graham & Kaye, 2015). Here, the project manager provides a solid list of questions, including the name of the process, location of the process to be performed, inputs and outputs, tools and resources, process interdependencies, the impact of any process disruption, timing and duration of the disruption, and historical data. To ensure an objective and accurate analysis, everyone involved needs to understand the importance of the business impact analysis properly. The members need to have a closer view of the whole process to provide new perspectives. Upon collecting relevant information, the data should be consolidated into a single document listing all information for every process clearly and concisely.
After gathering all relevant information, the fourth step is to evaluate and review the business process information. The collected information can be done manually or automated by a computer, depending on the reliability and practicality of the methods in formulating a conclusion. An intensive review will attain multiple objectives, including creating a prioritized list of business processes, identifying technological and human resources required to optimize the level of operations, and establishing a suitable recovery timeframe (Faertes, 2015). The timeframe provides an accurate budget and timeline, acting as a disaster recovery plan for any possible losses and disruptions. Essentially, the members need to be actively involved at this stage and allowed to offer their input, add new observations and make necessary changes that prioritize prompt recovery.
The fifth step involves preparing a business impact analysis report to facilitate disaster recovery and business continuity. The report is a documentation of the findings presented to the key stakeholders and upper-level management. Ideally, it should include a summary and list of the findings arranged from the most frequent to the least frequent, external and internal organizational dependencies, ranked critical business processes, mitigating plan for potential threats, members who undertook the analysis, a conclusion of the findings and suitable recommendations (Păunescu et al., 2018). The BIA report acts as a guide to developing the business continuity plan, alongside providing response priorities for restoring business operations.
Finally, the last step is the implementation of the recommendations within the BIA report. This is the role of leadership to act on the analysis findings after the team has communicated the findings. The business continuity plan should include an explanation of the process, communication processes, allocation of resources, mitigating measures, training, auditing, and restoration procedures. There should be room for updates and changes if the recommendations do not work as intended.
Most Important Steps of the BIA Analysis
Although the BIA analysis entails six primary steps, some steps can be considered more critical than the rest. The whole analysis is heavily dependent on the ability and capability of the project team. As such, it is exceedingly vital to choose selected individuals with the right expertise, knowledge, and skills to conduct the process effectively. A highly skilled project team will be able to communicate and address potential risks as well as come up with an appropriate business continuity plan. Likewise, the other critical stage is reviewing and analyzing the collected information. A thorough and detailed analysis ensures that all crucial information is included in the report. Fundamental processes need to be prioritized to result in plausible recommendations and quick determination of a recovery plan.
Conclusion
A business impact analysis (BIA) is an essential tool consisting of elements that examine risks associated with running a business. The analysis offers a long-term perspective of future trends and disruptions that may adversely affect business profitability. BIA entails six major steps: planning, selecting a project team, gathering information, analyzing the findings, preparing a BIA report, and implementing the recommendations. With clarity, a BIA is an efficient tool that fosters the understanding of meaningful information relevant to birthing recovery strategies to ensure continuity of business operations in case of possible disruptions.
References
Faertes, D. (2015). Reliability of supply chains and business continuity management. Procedia Computer Science, 55, 1400-1409. https://doi.org/10.1016/j.procs.2015.07.130
Graham, J., & Kaye, D. (2015). A risk management approach to business continuity: Aligning business continuity and corporate governance. Rothstein Publishing.
Păunescu, C., Popescu, M. C., & Blid, L. (2018). Business impact analysis for business continuity: Evidence from Romanian enterprises on critical functions. Management & Marketing, 13(3), 1035-1050. https://doi.org/10.2478/mmcks-2018-0021
Sadgrove, K. (2016). The complete guide to business risk management. Routledge.
