Business Impact Analysis
November 03, 2022
Business Impact Analysis is the analysis that is performed to estimate the effects of the incident that takes place in the company. BIA does not strictly concentrate on a certain factor, gathering and analyzing all possible cases and factors. Among the ones that usually create the vast majority of incidents are natural disasters, political situations, equipment issues , and, of course, cyberattacks.
Aside from estimating the damage, BIA aims at reviewing the business stability and the ability to operate on an uninterruptible basis. That is the side product of the initial analysis, since you receive not only the list of things that can fail but will also see the ones that continue working. The key target of BIA is to provide a view on the business activities and assets that can be damaged in an incident, the time it will take to recover them, and the probable improvement vector for these ratings.
In simple terms, BIA is about to reveal how much damage the cyberattack can deal - in monetary terms and reputation. It clearly shows how much equipment and personnel may be involved in a certain incident and how much time you will need to clean up the rubble. It may not be so obvious why such apocalyptic preparations are needed - but let us explain.
How does BIA work?
BIA is a procedure that initially takes a long time to complete, as the team of specialists who work on it needs to collect a whole bunch of data. If the company has poor or no journaling, that may extend the period even more, as the analysts should also gather all things. Usually, the information they need may be classified as follows:
- Relations between activities, assets and external factors. The outage of a root process (for example, the delivery of raw materials) or element may inflate everything that bears upon it.
- Complexity of activities and assets. Some business processes are very hard to initiate once they are stopped, and even harder if the info they use is damaged. The same thing is about assets.
- Level of corporate readiness. For faster response to the incident, companies can do a lot of proactive preparations - such as creating backups, having the needed resources in stock, uninterruptible power supplies, or qualified personnel inbound. These parameters can sharply influence the resulting numbers.
- Risks of certain events to cause influence on the business. This is what insurance agents usually do, but data analysts should also perform this operation. It supposes that the chances for all possible disruptions are calculated, and the impact of each is figured out. However, real-life modeling also supposes calculating the chances that some events will happen simultaneously.
As you can see, Business Impact Analysis is a good example of big data analysis. This kind of review may be performed manually (or with the most simple application software), but it will already take a lot of time and effort and will not guarantee a precise result. Human factor and lack of the operativity of calculations brings a big error in the estimates. That’s why even little companies prefer automated solutions - the programs that collect all things automatically and keep an eye on the changes to correct the results for more actual information.
Examples of disruptions that are taken into account in BIA
There could be plenty of places where the hazard for normal business functioning is present. However, in Business Impact Analysis, only the most relevant are used - ones that meet pretty often and can really influence the operations. These are:
- Cyberattacks, including ransomware, data breaches and others;
- Supply chain disruptions;
- Key employees outages;
- Issues with hardware and software;
- Power outages or problems with power supply.
Business Impact Analysis Stages
Usually, the BIA process is divided into 10 consequential stages. In the case of specialized software usage, some of them can be skipped.
- 1️⃣ BIA approval. Since the operation involves a lot of time and specifically trained employees, the company’s management will likely perform this procedure only on-demand. If they receive a recommendation from a certain person or an outsourcing company, it is essential to ensure that this procedure is needed.
- 2️⃣ Personnel preparing. We already mentioned that for business impact analysis, it is important to have people who can run the procedure and analyze the output. In corporations, the most common case is to hire outsourced workers who specialize in that particular task.
- 3️⃣ Planning the BIA. Making all possible checkups is interesting but will cost too much money and time to perform. Management should choose what situations they want to simulate.
- 4️⃣ Info gathering. When the surface of a checkup is chosen, the amount of information and its sources becomes clear. Now it comes the time to collect the information from all these places. This stage may take the most time given that not all sources will be readily available.
- 5️⃣ Data processing. The raw data gathered from business’ elements is still not ready to be used for calculations and analysis. Personnel in the BIA should sort information by type and weight in further analysis. This stage may take a lot of time as well.
- 6️⃣ Exactly, analysis. It can be performed both manually and with the help of specific software that makes it easier to group the data, weed out the irrelevant elements and make quick and massive calculations.
- 7️⃣ Creating the report. Outputs from the BIA are still not so simple to understand and require additional processing to give only the most important information and conclusions. The report logically divides into parts that describe different situations.
- 8️⃣ Results presentation. It may be just showing the papers to the management who ordered the analysis and a full-scale presentation using graphic content.
- 9️⃣ Taking into account the analysis outputs. Such a job is done must not be ignored, especially when it shows up some really dangerous events that can possibly happen. The BIA results in implementation into the business strategy will not only decrease the risks now but also mitigate them in all future projects.
- 1️⃣0️⃣ Real-life application. After all stages, the conclusions made through the analysis should be brought to life. That is not an easy task, especially in large companies, but if the business impact analysis results were considered worth attention, the results should be applied.
Why is BIA important?
Any kind of business builds around the prediction. You may try to predict that the demand for certain goods will remain high or that you’d have consistent competitive advantages over other companies. However, it is important to remember that business is not only about gaining money but also about spending them on your contractors and because of unpredictable circumstances. Any company should have a reserve that will allow it to keep going in harsh conditions. And business impact analysis helps the companies to determine how much money they should have for the cases when something goes wrong.
The most often case of modern-day disasters of corporations - cyberattack - is what was not predicted by companies before. DDoS attacks disable the companies’ sites, ransomware attacks lead to dramatically large payments, and data breaches compromise the image of a reliable corporation. Predicting the possible losses and, more importantly, studying how to make them way smaller is among the key functions of BIA in modern business.
Business Impact Analysis vs Risk Assessment
Most of people who are familiar with business processes&procedures may say that BIA is actually the other name for risk assessment (RA). And they are right - the latter is similar to Business Impact Analysis, especially in the aforementioned part with risk estimation. Before BIA was developed into a separate procedure, it repeated many actions that were typical for RA. But now, risk assessment is a part of BIA and is rarely performed without calculating an impact in monetary terms.
Automated solutions for Business Impact Analysis
The massive amount of data is hard to collect, handle and analyze without automatization. Most “manual” BIA approaches still use simple data aggregation tools, like table operators or spreadsheets. However, there is specialized software that can effectively perform all sorts of impact analysis continually. There are enough vendors to have various solutions that differ in their coverage, calculation speed, and prices.
Such solutions are usually available in the Software-As-A-Service (SaaS) form - it is pretty convenient for that class of programs. As most companies have a different structure, the programs will show their best performance only after “personalization” for the specific corporation. Still, small companies may use unified solutions that are not customizable but way cheaper than their SaaS counterparts.
How often should you do a BIA?
Modern business environment evolves pretty fast, and it is essential to be ready for all new problems and threats. To be sure about the actuality of your past analysis, it is better to keep an eye on the last political, economical and cybersecurity news. Moreover, all of them correlate, so the events in one may affect all others, creating a wave of new risks. All such things should be considered, and the corresponding analyses should be performed.
Cybersecurity should receive some excessive attention, as it has a tendency to evolve and have rapid changes without any external influence. In particular, ransomware breakouts happen not only due to worldwide-scale events (COVID pandemic, war in Ukraine, etc), but also without any serious reason. Some groups may become way more active just because they’ve spent all money they gained before, or after a loud banter chat with the other crooks, where they’ve bet who will hack more companies.