Business Impact Analysis (BIA)

Business Impact Analysis (BIA)

Modern-day enterprises thrive on making data-oriented decisions to further their business objectives. Such organizations seek to implement a business continuity management system (BCMS) as a part of their business continuity planning. The idea behind business continuity planning is to create a plan for preventing and recovering from potential threats such as cyberattacks and natural disasters. Just like an information security management system (ISMS), BCMS has its own set of requirements given under ISO 22301:2012. Major components of a BCMS include management support, business impact analysis, risk assessment, and a business continuity plan. 


With LIFARS on retainer, a cybersecurity incident or a data breach will be handled with the highest priority under strict SLAs. Have your own Computer Security Incident Response Team on call and ready for deployment as your private 911 cyber-emergency. Repurpose unused hours for one of our proactive or advisory services and strengthen your security posture to make the most of your investment. 


What is Business Impact Analysis? 

Carefully planning to deal with potential risks helps organizations in sustaining their operations in the long run. Put simply, Business Impact Analysis (BIA) is a tool to manage organizational risks. It helps a business by predicting possible consequences when business operations are disrupted due to the realization of a risk. A BIA collects relevant data for developing organization-specific strategies for recovery in emergencies. 

It also identifies potential scenarios that can harm a business, its operations, and financial stability. A BIA exercise specifically focuses on financial and operational aspects of disruption. It covers 

  1. Contractual liability, 
  2. Increased expenses due to expedition, outsourcing, overtiming, etc. 
  3. Delayed sales and income 
  4. Lost sales and income 
  5. Regulatory fines 
  6. Customer dissatisfaction 
  7. Delay of new business plans 

Does the timing and duration of a disruption matter? 

The timing of a disruption to your business functions may have a significant impact on the overall loss. For example, consider that your business has a chain of supermarkets. If a disruption occurs just before the holiday season and your IT systems are not working, you stand to lose a substantial amount of your sales. Similarly, the duration of disruption is also a crucial aspect to be considered in a BIA exercise. Consider that your business has planned to organize a sale across all the stores at 10 AM. Because of a network connectivity issue, the sale does not begin as scheduled in all the stores. The apparent results are customer dissatisfaction and lost income. 

Possible disruption scenarios 

Some of the most common business disruption scenarios can be: 

  1. A data breach or other cybersecurity incidents 
  2. Physical damage to your organization’s building(s) 
  3. An outage of utility services such as electrical power 
  4. Interruptions in supply chain 
  5. Loss of network connectivity 
  6. Breakdown of systems, equipment, or machinery 
  7. Natural disasters such as earthquakes and floods 
  8. Large-scale employee disputes 

Is BIA important? 

BIA would be a part of any comprehensive plan for minimizing organization-level risks. No business is prone to accidents, emergencies, and planned disruptions by malicious individuals. If you are in the middle of a disruption, your response would be random and less effective. With due diligence, a business can make a well-thought and thoroughly discussed plan to recover from an unfavorable situation. When you have a documented action plan in place, it gives more confidence to the management as well as your team while mitigating such disruptions. 

Besides, a BIA also prioritizes business operations that require immediate recovery along with detailed instructions on testing recovery plans. One cannot deny that problems are not a part of the modern-day business landscape. Ignoring such possibilities directly threatens long-term survival and solvency of a business. 

To perform a BIA, your team will carry out activities such as: 

  1. Identification of an organization’s business operations 
  2. Prioritizing operations based on their nature and importance 
  3. Impact on the organization if an operation is affected 
  4. Individuals responsible for the recovery 
  5. Expected recovery time and damages 


How is BIA different from risk assessment? 

You would have seen that every other regulation or standard talks about implementing security measures appropriate to the risk. While this appropriation is often subjective, risk assessment identifies situations or possibilities that can disrupt a business process. On the other hand, a BIA measures impact on the business when its operations are not functional due to a disruption. Risk assessment tries to determine the probability of a risk; BIA relies on the inability of a business to perform a particular operation. BIA focuses on minimizing the recovery time; risk assessment assists in determining how to prevent a disruption. Moreover, a risk assessment does not consider financial and non-financial aspects; while a BIA does.


Ending Notes 

You will come across many theories that justify one being better than the other. Also, there are divided opinions on what should be conducted first: risk assessment or BIA. ISO 22301 allows both of these approaches. Our recommendation is to perform risk assessment first to get a better idea about the incidents that are most likely to happen. After this, you will be better equipped to perform a BIA as you already have the list of risks your business faces. Even if you disagree with our recommendation, you should never perform a risk assessment and BIA together at the same time.  




  1. ISO 27005:2013 Information technology – Security techniques – Information security risk management 
  2. ISO/TS 22317:2015 – Societal security – Business continuity management systems – Guidelines for business impact analysis (BIA)