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Business Impact Analysis

What Is a Business Impact Analysis?

A business impact analysis (BIA) is the process of identifying and prioritizing your business processes and functions based on what would be most impacted by a disruption. The more your organization understands which processes are key to keeping your business running, the more effective your business continuity and disaster recovery planning will be.

Why is Business Impact Analysis Important?

A business impact analysis (BIA) is important because it gives an organization the framework needed to prepare appropriately to recover from a disruption. After identifying critical business functions and creating a BIA, an organization can go on to develop a business continuity plan (BCP), focusing on the areas of greatest impact identified in the BIA.

What Are the 5 Elements of a Business Impact Analysis?

What’s included in a BIA will vary depending on the size of the business, the industry you’re in, and how your business runs. However, each BIA is likely to include these 5 elements:

  1. Types of disruptions: The BIA should include a list of the most common disruptions likely to impact your business, at a minimum. These could include fires, natural disasters, employee attrition, cyber attacks, and so on.
  2. Areas of impact: With each disruption, you should outline the area of the business that will be affected and how.
  3. Operational loss: What is at stake when this business area is impacted by this disruption? Will you lose productivity, access to important data, a feeling of trust and safety?
  4. Financial loss: What will be lost financially, and how quickly will you lose it? Is it an hourly loss, a daily loss? Is it direct or indirect?
  5. Time to recover: How long will it take to get back to normal if this disruption happens? And what is the business’s maximum level of allowable downtime?

Business Impact Analysis vs Business Continuity Planning

You can’t create a successful business continuity plan (BCP) without creating a comprehensive BIA first. The BIA is where you identify which processes and functions are core to your business. The BCP is where you put these identifications into action. The goal of BCP is to map how your organization will respond to a disruption in a way that minimizes the impacts discovered in the BIA.

Business Impact Analysis vs Risk Assessment

Risk assessments and business impact analyses are not mutually exclusive. In fact, one of the elements that might be included in a BIA is a risk assessment, where you determine which processes are prone to certain types of risks. While a risk assessment evaluates the likelihood that certain events may occur, a BIA takes this one step further and explores how this risk will impact the business.

Business Impact Analysis vs Disaster Recovery Plan

A disaster recovery plan vs business continuity planning, serves as a continuation of the business impact analysis. Disaster recovery plans spell out what actions will be taken to prepare and responde to a disaster - who is responsible for what and when, how the information will be disseminated, who needs to be brought in to assist, and so on.

How to Conduct a Business Impact Analysis

To conduct a well-rounded business impact analysis, you’ll need to include stakeholders from different departments. This will help you identify all processes and functions that are core to your business, not just a portion. Through interviews, conversations, and data analysis, you can start to illustrate how certain processes can be harmed, and by how much, when experiencing distinct disruptions.


After pulling out what’s essential to keep your organization operational, you can start to estimate both the potential losses and the amount of time it might take to recover and return to more normal conditions. With this information in hand, you can generate a comprehensive, clear BIA report and financial impact matrix. From there, you may work on business continuity and disaster recovery plans.

Business Continuity Consulting Services at TierPoint

TierPoint’s business continuity consulting services can help you ensure your business impact assessment encompasses all risks and critical business areas necessary for your success. Don’t leave it up to guesswork.

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