Business Impact Analysis (BIA)
Business Impact Analysis (BIA) is the process of assessing the impact on the
organization should a particular event occur, for example the failure of a
process or the occurrence of any other risk.
Impact can be experienced in a number of ways and its dimensions include:
- Coverage: The processes and people affected.
- Spread: The dynamics of how it spreads over time.
- Duration: How long it lasts, both if nothing is done or if a recovery
effort is undertaken.
- Mop-up cost: The short-term cost of handling the impact.
- Long-term cost: The cost in terms of lost business and other longer-term
- Dissatisfaction: The effect on customers and others in terms of
An impact analysis may include:
- Mapping of the processes and resources in the business area being
- Identifying those who are dependent on the outputs of these processes.
- Assessment of the criticality of continuity for this overall area.
- Identification of weaknesses and single points of failure.
- Selecting a set of points for deeper analysis.
- Full assessment of the impact of the selected points.
The result is then carried forward into action planning where plans are
- Immediate action to reduce the probability / impact of risks
- Monitoring of the risks to determine changing probability.
- Preparation for contingency action should the risk occur and the
Business impact analysis is often done as a part of Business
Continuity Planning (BCP) and may categorize risks depending on the
overall impact and satisfaction/cost effects. BIA and BCP are also
effectively part of business risk management (which is closely related
to quality management).