Every organization is greatly dependent on their resources for their day-to-day operations. However, in case of an unforeseen event, there might be critical instances in which an organization has to allocate a great amount of funds and other resources in order to recover from a disaster. If you don’t want your business to be put under a long hold because of disaster-induced disruptions, then you are on the right page. Between two competing organizations where both aim to create an impact in the market, the one that’s well-prepared and is aware of what to do in times of disruptive events is more likely to grow successfully.
Therefore, it is essential for every business to conduct Business Impact Analysis (BIA) to fight off disruptive risks and be prepared for responses in case of an emergency. People often get confused between BIA and risk analysis. In simple terms, BIA embodies diverse phases that are important to contest unacceptable downtime for any organization. In this article, let us guide you on how to create an efficient Business Impact Analysis.
What Is a Business Impact Analysis?
A Business Impact Analysis is a part of the disaster recovery plan that aims to determine the criticality of business systems and functions. The BIA ensures the resilience of business operations and its continuity in case of a disruption before, during, and after an unforeseen event. Considering the impact operational and financial-wise, the BIA is used to keep the business prepared and keep the following objectives on track:
Recovery Time Objectives (RTOs)
Determining the crucial importance of functions and systems based on RTOs refers to the consideration of target time set to recover from the damages inflicted after an incident. RTO is defined as the time duration between the occurrence of a disruption and the recovery of resources. It basically points out the time availability to recover operations that have been harmed to avoid unacceptable consequences. In a business continuity plan, RTOs are validated to generate recovery actions to lessen the possible damage upon disruption. Trained staff and cross-functional teams that are included in dealing with analytical decisions usually estimate the RTOs and determine the dependencies which include business partners and outsource personnel. As every company has its own vulnerabilities, it is also important to take note that internal processes which provide fundamental inputs to critical activities are also deemed as dangerous activities. Such dangerous activities may come from outsource partners, external suppliers, or other company processes that provide vital inputs to your company.
Recovery Point Objectives (RPOs)
Determining the time between the last data backup and the event of disruption is the main measurement of RPO. The RPO refers to the time interval that may pass before the quantity of lost data exceeds the Business Continuity Plan’s tolerance or threshold due to a disruptive event. The values of RPO are identified depending on the application; the time tolerance and the loss of data that may happen in between two backup phases. It also deals with the time needed to conduct, repair, and implement preparations essential to operate the Recovery Time Objectives. It is recommended to have automatic backups, as it lessens the risk of losing data and provides the right intervals that can be easily automated for ease of recovery. An enterprise that backs up data every 24 hours can have a risk of losing data only for the past 24 hours and the same risk model applies to data backups for every 12 hours, every hour, and so on.
Why Is Business Impact Analysis Important?
Risks come and go in an unexpected manner, so ensuring that your organization is prepared to face these disruptions positions your business one step ahead. Carrying out a BIA will evaluate the vulnerabilities and risks when a disaster hits the company. The BIA safeguards important resources from further damage and gives awareness to employees on how unforeseen events can affect normal operations. In line with this, the business impact analysis detects the operative and monetary effects from the disruption, which includes — but is not limited to — a loss and delay in sales and income, an increase in expenses, a delay in business plans, and customer dissatisfaction. Considering the BIA gives the aforementioned factors a chance to be recovered with proper solutions.
Efficient planning enables a business to recover from an interruption and allows a business to focus on the impact of an outage. As technology evolves along with the organization’s IT landscape, every plan needs to be updated with time as well. Key personnel that are trained to be involved with business continuity planning needs to review business plans every now and then to modify areas that need to be apprehended. As new risks are inevitable, changes to the company and its operations need to be considered too.
For a more detailed guide about Business Continuity Planning, click here.
About EC Council’s Business Continuity and Disaster Recovery Course
The EDRP certification is aimed at educating and validating a candidate’s ability to plan, strategize, implement, and maintain a business continuity and disaster recovery plan. EDRP provides professionals with a strong understanding of business continuity and disaster recovery principles, including conducting business impact analysis, assessing of risks, developing policies and procedures, and implementing a plan. It also teaches professionals how to secure data by putting policies and procedures in place, and how to recover and restore their organization’s critical data in the aftermath of a disaster. Learn more about disaster recovery and enroll now! Visit our website at: https://www.eccouncil.org/programs/disaster-recovery-professional-edrp/