Briefly describe the main purpose of Business Impact Analysis (BIA), Business Co

Question

• Briefly describe the main purpose of Business Impact Analysis (BIA), Business Continuity Planning (BCP) and Disaster Recovery Planning (DRP) policies. Determine how these policies are similar and how are they different.
• Suggest a generally well-known example of an incident in the past 10-15 years, such as Hurricane Katrina, that highlights the importance of conducting the appropriate planning and development of these policies (i.e., BIA, BCP, and DRP). Identify the areas in your example that would be affected the most without a policy such as the ones mentioned above.

Explanation / Answer

Business impact analysis (BIA) is an essential component of an organization's business continuance plan; it includes an exploratory component to reveal any vulnerabilities, and a planning component to develop strategies for minimizing risk. The result of analysis is a business impact analysis report, which describes the potential risks specific to the organization studied. One of the basic assumptions behind BIA is that every component of the organization is reliant upon the continued functioning of every other component, but that some 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 has to close, but would come to a complete halt if the information system crashes.

As part of a disaster recovery plan, BIA is likely to identify costs linked to failures, such as loss of cash flow, replacement of equipment, salaries paid to catch up with a backlog of work, loss of profits, and so on. A BIA report quantifies the importance of business components and suggests appropriate fund allocation for measures to protect them. The possibilities of failures are likely to be assessed in terms of their impacts on safety, finances, marketing, legal compliance, and quality assurance. Where possible, impact is expressed monetarily for purposes of comparison. For example, a business may spend three times as much on marketing in the wake of a disaster to rebuild customer confidence.

Business continuity planning (BCP) "identifies an organization's exposure to internal and external threats and synthesizes hard and soft assets to provide effective prevention and recovery for the organization, while maintaining competitive advantage and value system integrity

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