Elements of a Business Impact Analysis

Lesson Transcript
Instructor: Arielle Rose

Arielle has taught Business and Customer Service as well has Master's degree in Business Administration.

A business impact analysis (BIA) determines crucial business operations and compiles information for planning against unexpected events that can halt these operations. Identify the processes of data collection, analysis, prioritization of unit, and the importance of gaining approval. Updated: 11/20/2021

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.

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  • 0:03 BIA & Planning Component
  • 2:17 The Data Collection Process
  • 3:13 The Analysis Process
  • 3:47 Prioritization of Unit…
  • 4:22 Importance of Gaining Approval
  • 4:58 Lesson Summary
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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.

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