Business Impact Analysis is usually used in the context of business continuity planning. The business impact analysis will not only used to locate and identify risk and its impact but it is also used to make a plan and decide what people, other resources and information will be needed instantly to save the organization from closure. The business impact analysis will therefore involves identifying risk, its impact and also urgent continuity planning.
The objectives of business impact analysis are to estimate the financial consequences of a worst case scenario to each major business unit, estimating the operational consequences in a worst case scenario, estimating the number of personnel required for recovery operations, estimating the time required for each business unit to come back to its original working condition as it was before happening of the incident.
While having a business impact analysis two objectives should be clearly set up that are recovery point objective and recovery time objective. Recovery Point Objectives are the objective set out for the acceptability of the dormancy of the data that will be recovered. Recovery Time Objectives are the objectives set out for the acceptable time to restore the functions of the organization. The Recovery Time Objectives should not ignore the maximum acceptable tolerable period of disruption; the time planned should not exceed the acceptable limit. Similarly Recovery Point Objectives should not ignore the importance of the limit of tolerable data loss.
Business Continuity Planning is a major part of Business Impact Analysis. It will be analyzed that how to reinstate with in minimum possible time? How to retain the customers? How to retain the key employees? Business Interruption Policy can be taken from an insurance company, which can reduce the impact of the incidents. Consequential losses will also be covered in this policy. This analysis of business impact is really very important and significant for the proper functioning of the organization in a disastrous situation.