Business Impact Analysis BIA: Detailed Process Steps & Examples

Business Impact Analysis

Any business involves some level of risk. And when your company expands, those risks compound and have a bigger potential for harm. While you cannot totally protect your company from every possible worst-case scenario, a business impact analysis BIA helps prepare you to deal with the consequences of those risks occurring. Thus it can give your company the best chance of recovery. We’ll go over some business impact analysis examples and the process involved in conducting the analysis.

What is a Business Impact Analysis BIA?

Business impact analysis BIA is a structured procedure used by your organization to analyze and evaluate the probable consequences of a disruption in vital business activities caused by disasters, accidents, or emergencies. A business impact analysis is an important component of a company’s business continuity plan.

A business impact analysis will show you how your company would be impacted if your business processes were disrupted due to a business interruption. Conducting a business impact study also allows you to analyze each process and department independently and in connection to one another, determine which functions are most critical to the continued operation of your firm, and develop a recovery strategy.

While a business impact analysis isn’t essential for compliance with any major data security frameworks (though it is for ISO 22301 compliance). It is the first step in creating a good business continuity plan for your company. Finally, your company’s financial and reputational health is its ability to recover from a disaster, whether it’s a data breach, a natural disaster, or another type of business disruption.

A business impact analysis will also provide you with the tools you need to maintain compliance with legal and data security obligations, as well as recover from a business disruption while functioning ethically and lawfully. While individual departments may understand the consequences of a broken process or function, you won’t be able to completely realize those consequences for your entire firm unless you carry out business impact analysis and all of that information is put in one place.

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Examples of Common Losses in a Business Impact Analysis BIA

It would be impossible for us to mention every single business interruption scenario here. Also, it is unlikely that your company could build and implement a strategy for every possible loss situation.

Instead, concentrate on the most common business impact analysis loss examples and how they are likely to harm your company. Consider these business impact analysis examples; if your company has a manufacturing component, you must plan for accidents that result in loss. Fires, broken pipes, and machine faults are all very real risks. Alternatively, if your company sells CRM software, clients expect their sales/customer data to be available whenever they need it.

As a result, your engineering team must ensure that your application is highly available. You may need to add redundancy to your systems to withstand failures, as well as closely monitor your application and the systems it runs on. This is to ensure that your clients experience the least amount of disruption possible.

Every company must be ready for business emergencies. Production servers failing, suppliers failing to deliver supplies on time or at all, labor disputes, electricity outages, the loss of a key employee, and cyberattacks are all likely to have a negative impact on your organization.

Natural and man-made catastrophes are also major sources of business interruption. Depending on where your company’s offices, storage facilities, servers, or other important business operations are located, you should plan for the disasters that are most likely to harm you. Earthquakes, hurricanes, wildfires, terrorist attacks, or large power outages would all have an impact on your business in different ways. Hence, you must plan for them.

Process Steps for a Business Impact Analysis (BIA)

There is no single way to conduct a business impact analysis. It will be different for each firm, and each company must tailor its approach to its organization’s specific requirements. However, a few elements of a business impact analysis must be included for it to be successful.

#1. Getting Ready

Before you can begin your business impact analysis, you must first assemble the project team that will carry it out. This could be a team of current personnel or an outsourced team committed to conducting business impact evaluations. To prepare for the real work of the business impact analysis, this team should identify and document the objectives and scope of the impact study in collaboration with higher management.

Before you begin, you should decide which departments you’ll involve, how the information will be collected and maintained, and the project timetable.

#2. Obtaining Information

The next phase in your business impact analysis is to collect raw data about your business processes. Interviews with the personnel who oversee and execute each process, as well as a business impact analysis questionnaire, are the two most frequent ways for gathering this data. The most effective way to collect information is through a business impact analysis questionnaire. If you used interviews instead of a questionnaire, you would collect the same information stated below. However, it will be of less standard.

Questionnaire for acquiring information

Here is a good selection of questions to include in a questionnaire:

  • The procedure’s name
  • A full description of where you’ll carry out the procedure.
  • All of the process’s inputs and outputs
  • The resources and tools employed in the process
  • The procedure’s users
  • The sequence of events
  • The financial and operational consequences
  • Any regulatory, legal, or compliance consequences
  • Previous Data

Essentially, your list should include questions that employees from various departments can answer. Managers will most likely understand the financial and operational implications. However, lower-level employees performing processes will be able to provide a detailed description as well as all of the inputs and outputs. Your compliance staff, in-house counsel, or division management can provide answers to regulatory and legal implications. You might also distribute the survey to outside business partners who have knowledge of the process or members of higher management who are involved in it or have a stake in it.

Conclusively, anybody who performs or oversees any component of the process should complete the business impact analysis survey. This is to produce the most comprehensive strategy feasible.

Once all surveys have been collected, you should compile all of the data into a single document that clearly lists the information stated above for each phase. Check that no information is missing and that the collected data is brief and clear. This is to ensure that everyone reading it understands the process and the most significant information about it. If it helps, you can even make flowcharts for each phase.

#3. Review and analysis of information

The effect study can begin once you have gathered all of the necessary information regarding each business process.
The business impact analysis team will examine each process in order to ascertain three things:

Which functions and processes are critical to the ongoing operation of your business? This judgment will result in a prioritized list of all processes. If there was a large-scale tragedy tomorrow, this list would advise your company which procedures needed to be restored first and which could wait.

What human and technological resources are required for each process to run smoothly? In the event that a process fails, you will be able to prioritize people and technology.

What is the recovery timetable for restoring the process to normal (or as close to normal as possible) operation? When making this decision, examine both how long it will take in practical terms and how quickly your team will need to recover the process to avoid any reputational or monetary losses. Also, discover any significant gaps between these two.

If you find that a process must be operational within 12 hours to keep your firm going, but your present resources can only get it operational within 24 hours, that is an issue that must be addressed in the recommendations portion of your business impact study.

Finally, you should have a prioritized list of processes and a recovery sequence for important functions. This will ensure that your firm can quickly determine how to prioritize recovery in the case of a business interruption. Leadership will be able to select what to focus on first, whether the incident affects every department, one single department, or a few departments throughout the firm.

#4. Development of Business Impact Analysis BIA reports

After you’ve reviewed and confirmed all of this information, you’ll develop a business impact analysis report to submit to top management and other disaster recovery stakeholders. This report is the most essential result of your business impact study. It will be used to communicate your findings and suggestions to the people in your organization who have the authority to change the disaster recovery process.

Your company’s disaster recovery strategy cannot be fully created and effective without a business impact study. This is because your disaster recovery process will be based on a shaky foundation. Your company’s leadership cannot establish a fully informed disaster recovery procedure if they do not understand which processes are most vital to get up and running and what resources are required to do so. When developing and delivering your report, make sure that your business impact analysis team and your company’s leadership team understand this.

Your final business impact study report should include the following information, at a minimum:

  • A summary
  • The scope and objectives of the business impact analysis
  • Methodologies for gathering information
  • A summary of the findings
  • In-depth findings for each department, including:
    • the most important procedures or functions
    • the effects of disruptions on many parts of the business
    • the duration of the disruption that is tolerable
    • the acceptable levels of loss
    • comparison of prospective financial expenses and expected prices for recovery procedures that could be used
    • Documents supporting the findings
    • Recommendations for Recuperation

This is the report you’ll deliver to management and also the stakeholders to provide them with insight into the process. It’ll assist them to grasp your findings and then also learn what the best solutions for recovering each process are. Take the time to ensure that it is comprehensive, well-written, and easy to understand.

#5. Recommendation implementation based on business impact analysis

The final phase in this process is to put recommendations into action. Once your team has completed the business impact study and conveyed the findings, it is ultimately up to leadership to take action. However, your team may assist promote the conclusions of the research and persuade leadership to follow through on your suggestions.

When you discover that any of your earlier recommendations aren’t operating as planned, new processes are adopted, or new departments are formed, this final stage should incorporate updates and revisions to the recommendations. Furthermore, your company isn’t a static entity; it’s constantly changing and expanding, and your business impact study should also reflect that.

How does BIA support compliance with regulations and standards?

By pointing out potential areas of non-compliance and offering suggestions for improvement, Business Impact Analysis (BIA) can aid in conforming to regulations and standards. A BIA may find a crucial business process that doesn’t have enough safeguards in place to protect sensitive information. In order to mitigate the risks and maintain conformity with applicable regulations and standards, this data can be used to formulate corrective measures.

How can BIA be used to support continuous improvement?

The results of a Business Impact Analysis (BIA) can help a company improve steadily by illuminating its most pressing opportunities and threats. Important business operations that don’t have adequate backup or recovery plans, or processes that aren’t optimized for efficiency, are just two examples of the sorts of problems that a BIA can help illuminate. This data can be used to inform strategies for strengthening organizational resistance and sustaining progress.

How does BIA support the development of recovery strategies?

With the data gleaned from a BIA, businesses can better prepare for and bounce back from any kind of disruption. A BIA can tell you what parts of your business are crucial, how much damage a disruption could do, and what kinds of assets and resources you’ll need to get back up and running. This data can be used to devise recovery plans that put a premium on getting critical services back online as soon as possible while keeping disruptions to a minimum.

What is the role of technology in BIA?

The field of Business Impact Analysis relies heavily on technological advancements (BIA). Numerous occurrences have the potential to disrupt a company’s operations, including the use of information technology and the services it provides.


Whether you’re using your business impact analysis for compliance purposes, such as an ISO 22301 audit, or simply preserving it for future reference, it should be saved in a location where your compliance, IT security, and leadership teams can easily access it.

You can set policies and due-date reminders on your documents within the program, so you or your colleagues are immediately notified when it is time to review/revisit a document, policy, or analysis.

Business Impact Analysis FAQs

What is included in an impact analysis?

The process of impact assessment involves the isolation of activities or events that are the most likely to affect the business, its finances, and also its operations. On an external scale, the impact analysis looks at the social, economic, and environmental significance of these events and evaluates their effects.

What are business impact analysis examples?

Impacts to consider include:

  • Lost sales and income.
  • Delayed sales or income.
  • Increased expenses (e.g., overtime labor, outsourcing, expediting costs, etc.)
  • Regulatory fines.
  • Contractual penalties or loss of contractual bonuses.
  • Customer dissatisfaction or defection.
  • Delay of new business plans

How do you do an impact analysis?

What Are the Steps in Implementing an Impact Assessment?

  1. Select the Project(s) to be Assessed.
  2. Conduct an Evaluability Assessment.
  3. Prepare a Research Plan.
  4. Contract and Staff the Impact Assessment.
  5. Carry out the Field Research and Analyze its Results.
  6. Disseminate the Impact Assessment Findings.

How often should a business impact analysis be performed?

Every two yearsThe BIA is a point-in-time analysis—your situation could change in a year or two. The recommended interval for updating your BIA is every two years; for some businesses, however, it will be longer (if things don’t change much), and for others, it will be shorter (banks are required to do one every year).

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