Business impact analysis is an often misunderstood component of your business continuity planâ€”but it doesnâ€™t have to be.
First, letâ€™s review business continuity planning, which is simply the creation and validation of a plan for how your business will recover critical activities after an extended disruption, such as a disaster.
Business impact analysis is one of the first steps in creating a business continuity plan in that it simply seeks to identify your businessâ€™s exposure to a sudden disruption of critical activities.
How do you conduct a business impact analysis? Many resources, including templates, are available. Letâ€™s review the basic steps.
First, when looking at your firmâ€™s activities and the cost of their loss during a business disruption, youâ€™ll want to be sure you consider both financial costs and non-financial costs (such as customer service, supplier confidence, and market perception). Be sure to consider a number of possible scenarios. For example, what if your building is completely destroyed? What if some key personnel are not available? What if the disruption occurs during a peak period for your business?
Second, youâ€™ll decide whatâ€™s critical and whatâ€™s not. An activity is probably critical if (a) its functionality is required by law, or (b) you consider its disruption unacceptable.
Third, for each critical activity, youâ€™ll then assign two values: a recovery point objective, which is the acceptable amount of data that will be recovered, and a recovery time objective, which is the acceptable amount of time to restore the activity.
You may want to perform a business impact analysis before you create a business continuity planâ€”and your IT infrastructure will play a big role in both. Is your data backed up? How often? Give us a call and let us help guide you through answering these questions and developing a plan for your critical business needs.