Business Impact Analysis: An Important Overview(2021)

Ajay Ohri


All successful businesses rely on data to make well-timed and intelligent decisions directed towards market dominance and profit. Data is king, and the metrics of business data used for a variety of impact analysis analytics depending on the kind of information required from it. It is today possible to use business impact analysis and business analytic analytical tools in tandem to do risk impact analysis, drive traffic, improve content strategy and make businesses more powerful in finding data relevant to customers both present and potential, what they need, how to improve the business which are all critical factors and decisions impacting one’s business.

In this article let us look at:

  1. Business Impact Analysis Defined
  2. Why Business Impact Analysis Is Important?
  3. How to Conduct a Business Impact Analysis?

1. Business Impact Analysis Defined

What is BIA? The impact analysis reports used in businesses known as Business Impact Analysis or BIA uses the meaningful data generated to recover, analyze, and predict the forecast of the business at a future data, study the disruptions and their consequences impacting the business, and develop a business strategy to help such businesses recover in emergencies. Such factors have also identified that impact the profitability of businesses, like the impact analysis examples of service delays, delayed supply deliveries, non-availability of raw materials etc. Risk assessment management is also an important part of BIA. 

2. Why Business Impact Analysis Is Important?

The BIA should be part of every business because it is crucial to risk minimization, planning, and business strategy, which directly impact the business’s health and growth. Possible disastrous disruptive scenarios can be financial emergencies, floor accidents, supplier and delivery failures, utility failures, raw material unavailability, labour disputes, cyber-attacks, and even disasters that are man-made. Two factors are important in BIA namely.

Making business plans ahead of time: Decisions made in the middle of a crisis are very different from having an action plan. Smart plans have room for contingencies and crisis management while making well-calculated data-driven plans and strategies driving them towards business goals, better revenues and efficient productivity.

Prioritizing strategy: Business is a landscape riddled with problems. The BIA helps decide the operations via a prioritization list, which considers the time-constraints and impact on the business. It also places recovery plans and their testing criteria within reach of the business. Such criteria also quantify the business costs, erosion of customer base, penalties, fines, loss of revenue due to the disruption, time is taken to recover, disrepute to the business etc. Ignoring these BIA examples and suggestions could lead to insolvency, business closure and more dire consequences.

3. How to Conduct a Business Impact Analysis?

There are no fixed guidelines on how to do impact analysis or get and implement a business impact analysis for the organization. However, the sequential process of business impact analysis steps that are normally followed is discussed below.

Approval: This is the way to initiate the BIA process with the project’s senior management endorsing it. It should define the goals, objectives, and scope making sure the business impact analysis is aligned with the future goals and achievements sought by the business. It also needs to define the project team, the time frame for conduct of the impact analysis and ensure the project team has the necessary skills and infrastructure available to them. 

Data/Information Collection: Though there are several ways of garnering information, the interview technique and a questionnaire are the best tools to make the business impact analysis. The questionnaire needs to be relevant and survey in detail the targeted areas on which the questions are based to be able to assess the impact of that factor on business disruptions. Identify the stakeholders like supervisors, team members, managers, and more who can be interviewed and hand out the questionnaire in advance for the best impact in discussions. The impact analysis report must include the following features. Namely

  • Process and department names.
  • Detailed process description and its performance location. 
  • Tools and resources used in processing.
  • Process outputs and inputs.
  • Process users. 
  • The operational and financial impact. 
  • The need and timing of BIA.
  • Historical data
  • The compliance, regulatory, or legal sanctions mandated. 

Review: All data collected needs to be documented, checked and reviewed for it being meaningful before it moves to the analysis steps. It can be achieved manually or through an automated process, and the results reviewed again for being reliable, accurate and practical for the inferred conclusions. This review stage identifies the technology, impact analysis tools and human resources for optimal operations, creates a prioritized business functions list of processes, and establishes the time framework for the recovery processes.

Report creation: The impact analysis findings are documented in the business impact analysis report, which normally contains the following.

  • Executive summary.
  • Scope and objectives. 
  • Evaluation methodology and data collection techniques.
  • The BIA findings summary.
  • The detailed reports for each finding with features like cruciality of the processes, acceptable disruptions and durations, impact of disruption, tolerable loss levels, recovery costs and more.
  • Files and supportive documents.
  • Recovery recommendations. 

This report is placed before the management for effective decisions at the senior levels of management.

Action with The final step is to put the impact analysis into action using the online project management software of Once approved, the process is divided into time-bound tasks allotted to team members for implementation. The software offers multiple options like a Gantt chart used for structured long-term planning or the visual Kanban boards. One can also upload the spreadsheet tasks to the software as a new project to get the big picture of dependent and independent tasks while breaking the process into milestone marks and phases.


Business impact analysis is a crucial part of smart business plans and strategies that analyzing disruptions, risks and losses of a business and suggest remedial action for the management and recovery from such risks identified.

If you are interested in making it big in the world of data and evolve as a Future Leader, you may consider our Business Analyst Training, a 10-month online program, in collaboration with IIM Indore!



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