Is Your Company Ready for the Business Impact of the Next Natural Disaster?
Throughout 2018, we witnessed numerous natural disasters. From Hurricanes Michael and Florence to the California wildfires, these disasters amounted to billions of dollars of damage. Despite the hurricanes and wildfires that lay siege through the Florida panhandle, Northern California, and the Carolinas, many companies fail to acknowledge the risks of these types of disasters and the detrimental effects they can have on business operations. Sadly, these devastating disasters cannot be prevented, but you can take the necessary steps to protect your business from suffering interruptions to critical systems and processes.
What is a Business Impact Analysis and Why is it Important?
A Business Impact Analysis (BIA) is an evaluation of the possible impact to various processes or systems should an interruption or stoppage occur due to an accident, emergency, or disaster. Simply put, the analysis is a way to predict the negative outcomes of disruption to a business or its processes and develop strategies to help the business recover in the event of an emergency. A BIA can provide a clear picture of the critical or essential systems or processes of your business that must be in place to continue to allow the business to run. By determining which processes or systems are critical, your business is able to address the areas which need to be quickly recovered and the amount of time necessary or allowable to recover them.
An Overview of the Business Impact Analysis Process:
Business Impact Analysis Phase 1: Getting buy-in and the green light from senior management for the BIA project. This will also be the phase where the objectives, goals and scope are defined to provide clarity to the overall project. A project manager, along with a project team, will need to be established, or this can be outsourced to a third party.
Business Impact Analysis Phase 2: Obtaining information and data is the next important phase of the BIA analysis. During this phase, the BIA project team will conduct interviews or provide users with a BIA questionnaire in order to obtain the necessary information. A BIA questionnaire is typically a detailed survey which requests knowledgeable users’ questions about their processes, timing and the maximum allowable time of disruption, any operational, financial, regulatory, and legal or compliance impacts that may arise given a disruption.
Business Impact Analysis Phase 3: Now that key information on the business processes has been collected, the information needs to be analyzed and reviewed. This is done in order to accomplish the following:
- To determine a prioritized listing of business processes or functions, with high criticality at the top of the list.
- To determine which individuals and technology resources are needed to maintain an ideal level of operations.
- To determine the recovery time frame, which is the length of time required to recover a business process of function and bring operations back to normal.
Business Impact Analysis Phase 4: The BIA report and a listing of any findings is now able to be documented. The BIA report is typically presented to senior management and should include the following: an executive summary, the objectives and scope of the analysis, any methodologies used to obtain data and information, a detailed listing of the findings and supporting documentation, and recommendations to be implemented for recovery.
Business Impact Analysis Phase 5: The final BIA report should be presented to senior management in order for them to implement any recommendations or make any adjustments to their strategy planning or goals for the company’s disaster recovery or business continuity plan.
Additionally, a best practice is to complete the BIA every two years, depending on how much the business processes or functions have changed. For some businesses it may be shorter and other businesses it may be longer depending on how much has changed since the last BIA was completed.
Connect with Business Impact Analysis Consultants
At Freed Maxick, our Business Impact Analysis team works with you and your company to understand your process from requirements through deployment to understand the complete picture, not just one area.
For more information about business impact analyses, disaster recovery and business continuity plans or other related risk consulting programs and services, please contact Heather.Jankowski@freedmaxick.com or call 716.847.2651.