BIA (Business Impact Analysis) is a risk management tool that can elevate your management system to a new level of excellence! BIA is a fundamental practice in the field of risk management and is vital for the creation of a BCP (Business Continuity Plan).
The main objective of this tool is to identify and assess the potential impacts that a certain event may have on our operations and on the continuity of the organization’s deliveries. BIA is an essential tool to help us better understand the risks we face and that may impact our processes, as well as to prepare ourselves to deal with them in the right way.
For certain companies, depending on the context in which they are inserted, an interruption in the supply of their products or services can have a much greater impact, significantly affecting the organization’s sustainability. In these cases, this possible interruption can directly affect stakeholders, harm the company’s reputation, generate fines and sanctions, and even make business continuity unfeasible.
Therefore, many companies with a considerably more sensitive context use BIA (Business Impact Analysis) in conjunction with risk management. This marriage can not only ensure greater assertiveness for the continuity of operations but also improve risk management and processes as a whole. In addition to facilitating the creation of contingency plans and business continuity.
For all these reasons, in our today’s content, we will get to know this tool a little better and understand how it works. In summary, BIA works in 3 basic steps, let’s see:
1st step: Mapping critical processes
An initial step to apply BIA (Business Impact Analysis) is to map the critical processes of your company. This means identifying what is vital for your operation to occur, what has a significant impact on your strategic and financial objectives.
Obviously, in companies with good management systems, all processes are important and play an equally important role. However, we need to consider that some of them are not so fundamental or do not have the potential to immediately stop the operation. Thus, they can be treated more calmly and without much ado.
However, some processes pose greater risks of interrupting the supply of products and services and, therefore, need to be better mapped to ensure that their risks are assessed and treated correctly.
2nd step: Assessing the severity of risks on processes
Once the critical processes are identified, BIA determines that we analyze the impact that the interruption of these processes can have on the organization and what risks can generate a possible interruption.
With the risks mapped, we can classify them better, as well as understand whether their incidence can or cannot generate interruptions in the production chain. Here, the severity of the risks will be a fundamental factor for the next phase of BIA.
Based on the results of the mapping and the analysis of the severity of the risks, we will be able to allocate resources and investments for business continuity, ensuring that we are prepared to deal with possible incidents and crisis events.
3rd step: Planning business continuity
Everything that has been executed so far – such as mapping vital processes and analyzing the severity of risks – will serve so that we can develop Business Continuity Plans (also called BCPs).
The goal is to create actions that, in case of risk incidents, maintain essential operations during and after the possible crisis. This helps minimize negative impacts for all stakeholders, avoiding losses and other problems.
This stage may involve various types of actions, such as creating control points and mitigation actions. However, the main focus is on creating contingency plans that ensure greater damage control and business continuity after the incident occurs.
BIA (Business Impact Analysis): resilience and business continuity
The COVID-19 pandemic has shown everyone that crises and risks that can interrupt production chains and, thus, business continuity, can arise at any moment. Additionally, since each business has its own context and peculiarities, some factors may go unnoticed by some but are crucial for other organizations, and this is where BIA (Business Impact Analysis) can be a significant differentiator.
The analysis provided by the BIA methodology is comprehensive and profound, ensuring a systemic and broad view of processes. This provides valuable insights into how to ensure business continuity, as well as how it can lead to process improvements and various optimizations.
Furthermore, since the focus of BIA is to ensure that processes continue to function and, more than that, deliver products and services, the methodology is essential for ensuring stakeholder satisfaction.
In some cases, business continuity and contingency plans may even be related to the well-being and safety of stakeholders, such as a hospital needing to care for its patients or an industry needing to protect its employees if a boiler malfunctions. Thus, we can say that Business Impact Analysis is necessary to ensure financial results, guarantee processes, and, beyond that, ensure greater safety and satisfaction for stakeholders.
