Business Impact Analysis (BIA): All You Need To Know | Zerto

BIA | Business Impact Analysis

A-to-Zerto Glossary of Terms

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Overview

A business impact analysis (BIA) is an integral part of business continuity planning that evaluates the effects of disruption. A BIA is similar to risk assessment, though the two differ in their areas of focus.  

What Is Business Impact Analysis?

BIA looks at the critical, time-sensitive operations of your organization to determine what will happen in the event of any interruption, disruption, or disaster, including natural disasters.  With an emphasis on business continuity requirements and resource dependencies, the BIA shows how downtime will impact the organization and therefore justifies certain business requirements. 

BIA is part of the business continuity planning and helps to identify the critical business processes, and their related resources, systems, and services.

As shown in figure 1 below, all business functions, processes, IT systems and services, infrastructure elements become an input to the BIA process.

Figure 1: BIA process (inputs, processing, outputs)

Criticality categories are used the determine the mission-critical functions or processes that will most likely become the focus from a business continuity standpoint. For a given process criticality may change over time as the impact of that process worsens the longer it remains unavailable.

As its name says it, the BIA also estimates the impact of the loss of a critical business process in term of financial cost, reputational damage, regulatory compliance and much more.

Business continuity management team members then use the information to set up business recovery strategies. With an emphasis on business continuity requirements and resource dependencies, a BIA shows how downtime will impact the organization and therefore justifies certain business requirements.

Where Does BIA Stand Overall in the Risk Management Process?

BIA is a key element of the business continuity planning along with risk assessment. They both inform the establishment of the business continuity plan and the disaster recovery plan that are part of Risk Management for operational risks. Operational risks are mainly related to failed processes or events that cause disruption over business operations. Figure 2 below illustrates what the risk management process looks like for operational risks.

Risk management overall covers other areas such as strategic, financial and compliance and governance risks that are mainly managed through business or corporate strategy.

Diagram showing the process flow and activities involved in Risk Management

Figure 2: Risk Management Process for Operational Risks

The quality of the BIA will set the bar for an organization Risk Management process outcome. Getting it done right doesn’t ensure the quality of the whole process, but not putting the right effort into it is a guarantee to failure.

What is the Difference Between BIA and Risk Assessment?

You can undertake a BIA without risk assessment, but every risk assessment involves some sort of business impact analysis.

A business impact analysis explains the effects of and the severity of the loss of key business functions and/or processes, disregarding of what is responsible for that loss. It doesn’t matter what caused the loss of the business function or process. What counts is to understand the impact of the loss to determine the recovery plan and timeframes to resume operations.

Risk assessment analyze potential threats and vulnerabilities that make up a risk, then assess the likelihood of this risk happening. It also spells out how the business would be affected, what resources and functions would be impacted. This leads to the prioritization — i.e., tiering—of these risks.

It also helps business leaders determine how a specific threat will affect business operations. Essentially, risk assessment identifies potential risks, assesses their severity, and determines the best course of action to mitigate or eliminate them.

When combined, BIA and RA enable a business to focus on the most critical risks or threats based on their likelihood and impact.

Risk assessment, which is a related step of business continuity planning, identifies specific potential disasters and setbacks such as cyber-attacks, network failure, natural disaster, supplier failure, utility outage, and so forth. The risk assessment focuses on mitigating these areas of vulnerability.

BIA, in turn, attempts to predict how any of the identified risks, exposed through the risk assessment stage, would affect the business if they were to occur. This will determine the type of recovery for each of these risks is required to mitigate the impact on the business and ensure business continuity. For IT disaster recovery, the conclusions of the BIA will drive the RTOs and RPOs requirements associated with all types of applications and processes supporting the business.

Risk Assessment: 3 Key Starting Points for Effective Business Impact Analysis

BIA and SLA Metrics

Within the context of business continuity, a service level agreement, or SLA, represents a promise about how long a business process or function will remain unavailable in the event of a disruption and assume the commitment of every party involved.

Through the BIA, an organization will estimate the downtime it can tolerate for a given process or function. This will be reflected in the SLA for that process.

One output of the BIA is the estimation of the maximum tolerable time (MTD) and maximum tolerable data loss (MTDL) that can be sustained over a given business process. These two metrics will be used by the disaster recovery (DR) teams to determine the RPOs and RTOs required to meet the SLA.

Diagram depicting Maximum Tolerable Downtime (MTD) and Maximum Tolerable Data Loss (MTDL)

Risk Assessment, BIA, SLA, RTO and RPO: What’s the Link? MTD and MTDL

A Solution to Meet Your Most Stringent SLAs

Zerto understands that unplanned disruptions do not just affect IT operations—they have a domino effect on your entire organization. As a BIA will show, your organization’s reliance on technology to maintain operations and remain visible to the world steadily increases. Zerto enables an always-on experience that transforms business as usual, helping you realize your innovation goals. 

The Zerto solution ensures that your IT systems remain resilient through the identified potential disruptions and can deliver the RPOs and RTOs that meet the most stringent SLAs established through your BIA.

By providing the best recovery point objective (RPO) and recovery time objective (RTO) at scale in the market, Zerto simplicity and resilience supports true business continuity.  

Zerto Solution Overview

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