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Business Impact Analysis

  • Process Outline
  • Instructions for Conducting a BIA


In this outline:

  • Learn the importance of targeting solutions at those areas with maximum impact on the business

By deciding:

  • Who resources the business impact analysis team
  • How to gather impact data
  • What are the consequences for IT of identified business impacts

Disaster Recovery Planning (DRP)

The role of BIA in DRP

  • Project goals
  • Identify threats
  • Business Impact Analysis
    • Identify critical processes
    • Identify IT resources
  • Design contingencies
  • Produce plan
  • Test and Deploy
  • Maintain the DR Plan

Purpose and Process

Purpose of Business Impact Analysis (BIA)

  • To quantify effect of disruption on business operations
    • Financial and functional impact
  • Business-focused
    • Enables or justifies decision on what to protect at what cost
  • To identify and classify backup resources
    • Divide the musts from the wants for assurance of business continuity

The BIA Process

  • Identify main business functions
    • For example, sales, marketing, finance, manufacturing, IT, et al.
  • Identify major activities of each function
  • Identify dependencies for all major activities
    • Must include all prerequisites or facilitators
      • For example, ICT infrastructure and applications
    • Manufacturing facilities, raw materials, customer contact centers, etc.
    • Accommodation and transportation
  • Quantify consequence from the loss of prerequisites

Who is Involved?

Membership of BIA Team

  • First decide who should be involved
    • Senior management and board members
    • Functional managers
    • Divisional managers
    • Site or geography managers
    • Operational staff
  • Board-level senior managers
    • May be appropriate for small companies
    • Too far from the action in large organizations
    • But
      • Can set corporate objectives and priorities
      • Can add credibility and authority to project

Who Contributes to BIA

  • Functional Managers
    • Usually the most appropriate contributors
      • Sales, marketing, manufacturing, finance
    • Focused on a single business function
    • Generally have a rational view on its place in the overall business
    • May need to consult with their supervisory and operational staff to identify all touch-points on IT systems
  • Divisional managers
    • Divisions may often be treated individually as small companies
    • Approach and format should be consistent
    • Each division may wish to field its own management team
    • Potential difficulty with representation of cross-divisional functions

BIA Detailed and Local Knowledge

  • Site or geography managers
    • Good overview of all functions
    • May be appropriate to treat each site as individual company
    • Approach and format should be consistent
  • Operational staff
    • Good knowledge of fine detail
    • Need to keep in perspective
    • Typically too many for workshop session
    • Less cross-functional understanding
    • Need to ensure level of contribution is consistent across different functional areas

How to Gather Data

Gathering BIA Data

  • What data do we need to gather?
    • Fundamental purpose of the function
    • Activities performed to achieve the purpose
    • Resources required to perform the activities
    • Consequences of non-availability of those resources
  • How to gather the data
    • Questionnaires
    • Structured interviews
    • Focused workshops
  • Organizing the data
    • Categorize requirements
    • Document the results
    • Text, spreadsheets, or database
    • Purpose-designed software

BIA Questionnaires

  • Designing and using questionnaires
    • Make it easy for targets to respond
    • Convenient
    • Don't have to get all players together at one time
    • Results need sanity checking
    • Time-consuming to achieve good results
    • Can precede workshop (to set the agenda, for example)
  • Need skill and care to prepare effective questionnaire and avoid pitfalls
    • Leading the audience toward an answer
    • Danger of poorly considered response - completed in a hurry
    • Poor response rates - or not completed at all
    • Frequently need to contact respondents to clarify answers
    • Easy for recipients to avoid hard or unpleasant concerns
    • Inability to elicit full, frank information
    • "You didn't ask that!

BIA Interviews

  • Structured interviews
    • Time-consuming and costly
    • Capable of good results
    • Danger of narrow thinking
    • Results need sanity Checking

BIA Workshops

  • Focused workshop
  • Recommended approach
    • Quick
    • Lower cost than alternatives
    • Highly effective
    • Synergy from group
    • Moderation from peers in real time
    • Common understanding and decision criteria
  • Drawbacks
    • Difficult to schedule
    • Needs good facilitator
    • May still need follow-up

Business and IT Perspectives

Business Perspective of BIA

  • Creates a statement of
    • The critical operational needs
    • How quickly I need it back
      • How do I meet catch-up implications after the information systems become available again?
    • How much I can afford to have lost when the process is restored
    • The (non-IT) resources that are essential for me to achieve my fundamental purpose
      • What do I need to do to ensure their availability?
  • Identifies critical business applications
    • Time scales and impacts
    • Document in the DR plan
  • Drives the IT perspective of BIA

IT Perspective of BIA

  • From an IT perspective
    • Driven by the business perspective of must-have applications
  • Drivers
    • What are the dependencies of the application?
      • What other applications are required for it to function?
      • What infrastructure (hardware, software, networking, etc.) does it require?
    • How soon must it be available and what is the acceptable restart position?
    • What volumes, timings, and user population are required in disaster mode?
    • Is there a backup regime appropriate to these needs?
    • Does the application support a staged/phased recover, or is it all or nothing?
    • How will we protect it during DR mode operation?
  • Identifies supporting infrastructure of the critical business applications
    • Document in the DR plan

Recovery Plan Document - By When?

  • Time vs. Impact
    • Impact increases or levels off over time
    • Impact never decreases over time

Categorizing Applications

Application Categories

  • Keep it simple using three categories
    • 1 = essential to organization's ability to operate
    • 2 = significantly reduces the organization's capabilities or profitability
    • 3 = useful, but not important in the short term
  • Restoring applications
    • Category 1, as soon as possible within limits specified by the BIA
    • Category 3, put to one side for consideration later
    • Category 2, do simple cost/benefit analysis to ensure response is appropriate to need


  • In this outline, we have seen that BIA concerns
    • Identifying the cost of disruption in functional and financial terms
    • Setting priority for restoring applications according to business needs
  • Meaningful BIA is dependent on
    • Appropriate contributors
    • Appropriate data gathering techniques
  • BIA output is viewed from two perspectives
    • Business Perspective
      • People, processes, non-IT resources, recovery time, musts/wants
    • IT Perspective
      • Technology resources required to deliver business applications in time scale demanded


This category has the following 2 subcategories, out of 2 total.

Pages in category "Business Impact Analysis"

The following 3 pages are in this category, out of 3 total.