Arielle has taught Business and Customer Service as well has Master's degree in Business Administration.
BIA & Planning Component
The main goal of a business impact analysis, or BIA, is to determine the critical business processes that are essential to the financial survival of a business. The second most important goal is to determine how long the business can function if one of these critical processes were halted due to disaster, accident, or an emergency. In this lesson, we'll follow a grocery store business to discover how the BIA can help protect businesses from unnecessary financial loss.
Goals, objectives, and the extent of the project are determined during the planning phase of a BIA. Setting goals helps focus the analysis on critical areas of the business. For example, if we think about the grocery store, is the most critical function of the business the computer system that operates the cash registers? Or, is it the logistics system that oversees delivery of inventory?
The computer system not only affects the cash registers, but the security systems, customer data, and inventory systems as well. Although both systems are important, the computer system would take first priority in establishing recovery. So, a good goal for this BIA would be to reduce the recovery time of the computer systems in the event of an unplanned outage.
Creating BIA objectives will help determine the strategies to use in achieving each goal. Based on the goal discussed above, a good objective would be to find the fastest way to recover the grocery store's computer system. A good strategy would be to have techs on call in the event of a loss.
The extent of the BIA report is determined by its goals. For instance, if the goal is simply to reduce downtime, the extent would focus on fixing the cause of the problem after it occurred. However, if the goal is to eliminate downtime entirely, the extent would then focus on installing a backup system.
Once the company's upper management approves the BIA plan, an announcement should be made by an executive or top-level manager to all relevant employees. It's important to stress the importance of the entire team's participation and cooperation. Upper management can also help you identify key employees, or knowledge experts from each department to consult throughout the process.
The Data Collection Process
The data collection process begins by first listing all the common business functions your business uses. Once that's done, you must determine which of these processes are interdependent. In the case of the grocery store, a list of common functions might be payroll, computer systems, logistic and delivery systems, warehouse, and human resources. Within this list, payroll and human resources are likely to be interdependent, and so are the warehouse, logistic, and delivery systems.
There are four main types of BIA data collection: questionnaires, in-person interviews, workshop sessions, and automated surveys. A simple questionnaire would suffice to determine the critical business functions and their relationships, while group sessions are advised when meeting with knowledge experts to determine function interdependence. In-person interviews and automated surveys can be used when collecting information from employees who serve on the front line.
The Analysis Process
Once the data is collected, it needs to be analyzed. This part of the BIA process can be done manually or with the help of technology. Challenges during this phase include determining recovery time and recovery methods. To work through those challenges, statuses must be created to categorize the impact of losses. Once this is done, a timeframe for recovery is assigned. Examples of statuses range from critical, urgent or important, to non-essential. Creating appropriate statuses will help you to determine which systems have priority for recovery.
Prioritization of Unit Processes
Once each process and business unit has been categorized, the next step will be for you to determine which functions have first priority for recovery. In our grocery store example, it was determined that the computer system was the most critical. Through the BIA, we may determine that the maximum level of downtime is a few minutes to a few hours. While the delivery and warehouse systems were categorized as urgent, the maximum level of downtime for these systems is up to 24 hours. Creating a recovery time chart will also help you and your team keep track and follow the BIA plan.
Importance of Gaining Approval
It's important to have management approval early in the beginning stages to gain buy-in from the entire team. Once the BIA is completed, the findings are also presented to management. A typical BIA report will include an executive summary, objectives and statement of scope, data collection summary and list of methods used to collect data, as well as a final summary with details.
The final section of the report should entail recommendations to the executive and upper management team for approval. This is a crucial step in the process which will ensure future buy-in from the management team as well as the rest of the company.
The BIA is used to determine the critical areas of business process and the impact that loss of these functions would have on the financial status of a company. Conducting a beneficial and thorough report requires proper planning. During this phase, the goals, objectives, and strategies should be well defined. Analysis of the data should center on determining recovery time and methods of recovery for each critical business function identified. Once this is done, each process should be prioritized by those that are most critical to business operation. The key to conducting a successful BIA is to include the executive or top level management team. Their approval will help to gain cooperation from team members during the data collection phase. The final step in the BIA process is to make recommendations and gain approval from upper management and the executive team to begin implementing the recovery plan.
To unlock this lesson you must be a Study.com Member.
Create your account
Register to view this lesson
Unlock Your Education
See for yourself why 30 million people use Study.com
Become a Study.com member and start learning now.Become a Member
Already a member? Log InBack