- Business impact analysis (BIA) is an essential component of an organization's business continuance plan; it includes an exploratory component to reveal any vulnerabilities, and a planning component to develop strategies for minimizing risk. The result of analysis is a business impact analysis report, which describes the potential risks specific to the organization studied. One of the basic assumptions behind BIA is that every component of the organization is reliant upon the continued functioning of every other component, but that some are more crucial than others and require a greater allocation of funds in the wake of a disaster. For example, a business may be able to continue more or less normally if the cafeteria has to close, but would come to a complete halt if the information system crashes.
As part of a disaster recovery plan, BIA is likely to identify costs linked to failures, such as loss of cash flow, replacement of equipment, salaries paid to catch up with a backlog of work, loss of profits, and so on. A BIA report quantifies the importance of business components and suggests appropriate fund allocation for measures to protect them. The possibilities of failures are likely to be assessed in terms of their impacts on safety, finances, marketing, legal compliance, and quality assurance. Where possible, impact is expressed monetarily for purposes of comparison. For example, a business may spend three times as much on marketing in the wake of a disaster to rebuild customer confidence.
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| Using a pandemic recovery plan template: A free download and guide: The H1N1 virus continues to spread -- download our free pandemic planning template and read our step-by-step guide on pandemic planning for businesses. |
| IT disaster recovery (DR) plan template: A free download and sample plan: Download our free IT disaster recovery (DR) plan and then read our step-by-step guide on IT disaster recovery planning. |
| Data replication technologies and disaster recovery planning tutorial: In this tutorial, learn how to choose the best replication product, and about how technologies like data deduplication and virtual servers are changing replication. |
| Disaster recovery essentials: E-Guide on DR planning and testing strategies: Our special E-Guide will help you hone your disaster recovery (DR) skills, find the gaps in your DR strategy and help build an effective testing plan. |
| CONTRIBUTORS: |
Kevin Miller |
| LAST UPDATED: |
15 Jun 2005
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