How to Conduct a Business Impact Analysis (BIA)

A Business Impact Analysis (BIA) is a critical process for measuring the impact of a business disruption before it happens. It helps organisations understand their operations and where improvements can be made, while also providing the data needed to create a disaster recovery plan and business continuity plan.
While the specifics of conducting a BIA may vary by organisation, it generally follows these five steps:
1. Plan
The first step in conducting a BIA is securing approval from senior management and gathering the right team. You’ll need trained individuals who can carry out the BIA, and they should adhere to the ISO standard for business impact analysis. A BIA plan should also be prepared to guide the process and our free template can help outline the key issues and activities to address.
2. Collect Data
Data is the cornerstone of any BIA. You’ll need to gather both quantitative and qualitative data. This can include documentation, interviews, and questionnaires from managers and key players within the organisation. The data should include business process information, such as where processes are performed, what resources are used (personnel, equipment, suppliers), and any other relevant details. This will allow you to determine the potential impacts of a disruption.
3. Analyse Data
Once you’ve collected the data, it’s time to analyse it. Identify mission-critical business processes and the technologies those processes depend on. Assess the impact of disruptions to these processes—financial, operational, and regulatory. You should also define performance metrics such as recovery time objectives (RTO) and recovery point objectives (RPO) to set clear expectations for recovery.
4. Document and Present the Findings
After analysing the data, the next step is to present the findings in a way that senior management can understand. A report should be prepared to highlight the most critical processes and the potential impacts of disruptions. This report will help guide the development of a business continuity plan.
5. Develop a Business Continuity Plan
While a BIA identifies the impact of disruptions, a risk assessment determines the likelihood of different threats affecting the organisation. By coordinating the results of the BIA with the risk assessment, businesses can define strategies for the recovery and restoration of critical processes. With executive support, these strategies should be implemented into a business continuity plan (BCP).
Example: Business Impact Analysis (BIA) for a Recruitment Firm
Let’s say we have a recruitment firm that specialises in connecting companies with job candidates. The firm relies heavily on technology to manage candidate databases, track client relationships, and conduct interviews. Below is a detailed Business Impact Analysis (BIA) for this recruitment firm, specifically focusing on technology and how it aligns with the needs of Managed Service Providers (MSPs) who could help support such firms with their IT infrastructure.
1. Plan
The recruitment firm’s leadership team approves the BIA, and a cross-departmental team is formed, including representatives from IT, HR, Sales, and Customer Service. The team adheres to ISO standards for conducting a BIA and prepares a plan that outlines key areas of focus, which includes critical business processes and the technology that supports them.
2. Collect Data
The team collects data from each department:
- HR provides details on candidate management systems, interview scheduling tools, and databases that track applications and client placements.
- Sales highlights CRM systems used for tracking client relationships, contract negotiations, and client communications.
- Customer Service discusses ticketing systems, client support tools, and email communication platforms.
- IT outlines all critical technology infrastructure, such as cloud storage, servers, and SaaS tools used to support recruitment operations.
The team also collects data on the hardware (computers, networking equipment), software (CRM, ATS, email), and personnel (employees, contractors) that are critical to the firm’s operations.
3. Analyse Data
The analysis begins by identifying mission-critical business processes and the technologies that support them:
- Candidate Database Management: The system used to store and manage candidate profiles, resumes, and job history. This is essential for the recruitment process and is directly linked to the recruitment firm’s ability to place candidates quickly.
- Client Relationship Management (CRM): The CRM system is used to track clients, sales leads, contracts, and communication. It is critical for managing the client base and ensuring ongoing business.
- Job Placement Systems: The system used for matching candidates with jobs, tracking placement status, and managing communication with both clients and candidates.
- Email and Communication Systems: Email platforms, VoIP services, and collaboration tools like Slack, which are essential for daily communication with clients and candidates.
Identifying the Impact of Disruptions:
- Loss of Candidate Database: If the candidate database is lost, the firm will be unable to access critical information on candidates, which will directly impact its ability to place candidates and generate revenue.
- Financial Impact: Loss of candidate data will cause delays in placements and lost contracts. Potential revenue loss of up to £100,000 (depending on the number of open placements).
- Operational Impact: Operations would come to a halt while manually rebuilding candidate data, leading to inefficiencies and downtime.
- Reputation Impact: Clients and candidates would lose trust in the firm’s ability to manage their information securely.
- RTO: 2 hours, RPO: 1 hour.
- Loss of CRM System: Losing access to the CRM will result in the loss of client tracking data, communication logs, and contract details, leaving the sales team without essential tools to maintain and grow client relationships.
- Financial Impact: Potential delay in follow-ups, leading to lost sales opportunities and client dissatisfaction.
- Operational Impact: A slowdown in business development and reduced customer engagement.
- Reputation Impact: Clients may become frustrated with the lack of communication and disorganisation.
- RTO: 4 hours, RPO: 2 hours.
- Loss of Job Placement System: If the job placement system goes down, the recruitment firm cannot track placements, monitor job status, or update clients or candidates, leading to inefficiencies.
- Financial Impact: Delayed placements and reduced job orders.
- Operational Impact: Inability to track the status of ongoing placements.
- RTO: 6 hours, RPO: 4 hours.
- Loss of Communication Systems: Loss of email or VoIP services would disrupt both internal communication and communication with clients and candidates, halting business operations.
- Financial Impact: Inability to communicate with clients and candidates could lead to contract cancellations and missed opportunities.
- Operational Impact: Entire staff becomes isolated from the rest of the team and clients.
- Reputation Impact: Clients and candidates might believe the company is unprofessional or unreliable.
- RTO: 2 hours, RPO: 1 hour.
4. Document and Present the Findings
The team creates a detailed report based on the analysis, including:
- A list of critical business processes such as database management, CRM, job placement tracking, and communication systems.
- Impact assessments for each process, covering financial, operational, and reputation risks.
- A prioritised list of processes based on the severity of the impact if they were disrupted.
The findings are presented to senior management, who use the data to make informed decisions about the business continuity and disaster recovery strategies.
5. Develop a Business Continuity Plan (BCP)
Based on the BIA findings, the recruitment firm now develops its Business Continuity Plan (BCP):
- For candidate database management, the firm implements regular backups and cloud storage solutions with an RTO of 2 hours and an RPO of 1 hour to ensure quick recovery.
- For CRM systems, the firm establishes a secondary CRM or manual processes to track clients and engagements if the main CRM goes down.
- For job placement systems, the firm sets up a manual fallback system to track placements and ensures data is stored offline.
- For communication systems, the firm adopts a hybrid system using both cloud-based email platforms and VoIP systems that are backed up and accessible via multiple devices.
The recruitment firm also ensures that each team member knows their role in the event of a disaster and that the IT MSP providing support for these systems is aligned with their recovery goals.
Reviewing and Updating the BIA
The BIA is reviewed periodically (e.g., annually) to account for new systems, processes, and risks. If the firm introduces new technology or expands its operations, these changes will be incorporated into the BIA to ensure that the plan remains relevant and effective.