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Business impact analysis (BIA)


Business impact analysis (BIA) is a systematic process for determining and evaluating the potential effects of an interruption to critical business operations as a result of a disaster, accident or emergency.


A BIA is an essential component of an organization's business continuance plan. It includes an exploratory component to reveal vulnerabilities as well as a planning component to develop strategies for minimizing risk. The end result is a business impact analysis report, which describes the potential risks specific to the organization studied.



One of the basic assumptions behind conducting a BIA is that while every component of an organization is reliant upon the continued functioning of every other component, some components are more crucial than others and require a greater allocation of funds in the wake of a disaster. For example, a business may be able to continue more or less normally if the cafeteria had to close, but would stumble if the information system crashed.


The analysis quantifies the importance of business components and suggests appropriate funding to protect them in the event of a disaster. The possibilities of failures are likely to be assessed in terms of their impacts in areas such as safety, finances, marketing, business reputation, legal compliance and quality assurance.

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