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Apr 26, 2021 in Analysis

Free Essay: Business Impact Analysis

Business impact analysis (BIA) is a strategic process adopted by firms in creating business continuity plans (BCPs). The BCP ensures continuity of business operations in the event of a disaster. The aim of the BIA is to collect relevant information that allows the firm to obtain a comprehensive insight into diverse business functions (Snedaker, 2014). Therefore, the BIA is a vital process since it serves as the basis for the BCP, helps to lower the impact of disasters that occur in the organization, and ensures business continuity after the disaster occurs.

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Methods for Establishing Component Priorities

The use of surveys is an effective method for determining component priorities. They are conducted amongst employees who have sufficient knowledge of the organizational processes in different departments (Taylor, 2013). Statistical principles are observed while conducting surveys to ensure the validity of the data obtained. For instance, random sampling can be used to select participants of the survey as it eliminates bias in the process.

A brainstorming meeting is another effective method of establishing component priorities. The BIA team meets with employees from all departments and they randomly discuss critical functions and processes of the firm. During these meetings, the BIA team aims at finding the answers for what is regarded as a disaster, the dependency between departments, and which tools are mandatory (Snedaker, 2014). This information helps the team to develop the first draft of the analysis.

After the data have been collected, the BIA team should conduct an analysis that will identify crucial functions and processes. It should rank the processes from the most important to the least crucial. This ranking is based on the analysis of the data collected. At this stage, it is also important to eliminate any instance of bias.

Business Functions and Processes

Business functions include all the procedures undertaken by the business, including the acquisition of raw materials, production, and distribution. All these processes are included in surveys, brainstorming meetings, and the analysis.

BIA Scenarios and Components

There are two scenarios that might occur during the BIA. First, the team may collect sufficient data and analysis, which will result in a successful recovery strategy. Second, the team may obtain insufficient data and conduct ineffective analysis, which will lead to the adoption of a futile recovery strategy.

Financial and Service Impact of Components Not Being Available

When the components identified by the BIA are unavailable, the business will incur significant losses, leading to low customer satisfaction. The losses will occasion from a reduction in the production of goods and services (Tucker, 2015). Therefore, customers will not obtain the products and amenities when they need them, which will result in low customer satisfaction.

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Recovery Time Frameworks

After the crucial functions and procedures have been identified, the recovery time framework and recovery point objectives need to be defined. Recovery time frameworks are set based on their level of criticality. The first tier represents a scenario when there is an outage, but an inbuilt recovery plan is executed and no data are lost (Snedaker, 2014). In the second tier, recovery time framework is set to meet a twenty-four hour period. At this phase, the firm will require finding alternative solutions and tools to restore the system online. In the third tier, recovery time framework is set to meet a forty-eight hour period. This phase applies to firms that have offsite data centers where activities can be transferred to the substitute site. In the fourth tier, recovery time is set between two and seven days. At this stage, hardware and software apps may be accessed from a vendor. In the fifth tier, the recovery time is set above seven days. At this stage, the firm needs to buy tools for restoration (Taylor, 2013). Identifying the phase of the disaster helps an organization to apply appropriate measures that will recover the system.

Determining Component Reliance and Dependencies

Component Dependencies

Determining component dependencies is the second procedure in the BIA. It aims at identifying processes that are contingent on other functions. The preliminary place to identify the dependencies is in the prioritized components identified in the previous stage. The team should commence by listing all the components on which the procedures depend. Once the list has been identified, the analysis should determine where the resilience may be caused by external factors (Taylor, 2013). The final part of the dependency places emphasis on the staff.

Resources Required

Firms have several recovery tools such as Pandora Recovery, Wondershare, Easeus, and Kernel. The choice of the recovery tool depends on aspects like cost and operating system that the organization uses.

Human Assets

The firm should identify if the staff can restore the system. All the critical processes should have personnel who can perform the recovery process. If outsourcing is required, the external entities should be informed of all the processes and their roles.


The process should begin with the selection of the BIA team. It should comprise qualified and competent personnel who understand the organizational objectives. Team members will be tasked with identifying the components in the analysis. The team should then prepare the first draft and present it to the upper management. The feedback from the management will be used to better define the components and processes. Once the BIA team incorporates the feedback from the management, it should submit the final product for approval.

After the BIA has been created and approved, it should be conveyed to the staff. All personnel should be aware of their roles in the event of any disaster. Employee training should be conducted to equip workers with the necessary skills required to restore the system and processes. Furthermore, all external entities that are required in the system restoration efforts should be informed of their roles. This move will minimize the damage caused by the disasters.


The BIA is of utmost significance to any business since it ensures that a company is prepared for both man-made and natural disasters. Surveys and brainstorming meetings are effective methods for establishing component priorities. At this phase, the recovery time framework is also set based on the level of criticality. Identifying component dependencies is the second stage of the BIA that aims at determining external factors that may cause resilience. The resources required for recovery and human assets are identified at this stage. Once a disaster occurs, the operations of the business are adversely affected. The firm cannot continue offering products and services to its clients, which decreases customer satisfaction. Moreover, the business experiences a dramatic decrease in the revenue obtained. Therefore, the company should follow a set of recommendation to minimize the damage caused.

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