Business impact analysis plays a key role in formulating a company’s business plan as it entails a thorough evaluation of the impact that one’s business policies may have on the company, the market and the society. Business impact analysis involves a detailed investigation of the potential risks that may entail the implementation of certain business projects such that the organization may be mentally and financially prepared to face the losses incurred in case of disasters.

Sample Business Impact Analysis

Business impact analysis conducted by: John Russell, Business Analyst, Peterson Business Private Limited.

Date of submission of report: May 15, 2012.

Analysis timeline: May 2, 2011 – May 15, 2012

Aim: The business impact analysis is an essential component of the organization’s disaster recovery plan. It attempts to probe into the various factors through which potential risk factors can be brought to light. The primary objective of the analysis is also to help prepare back up plans and financial recovery schemes that may aid the company retrieve its losses.

Business unit concerned: Finance and accounts.

Project head or Manager: Joe Burke.

Business process involved: Maintaining an up-to-date record of the day to day revenue earned and expenses made by the company.

Recovery time objective: 2 – 3 days.

Function classified as: Essential, that is, it can only survive an activity disruption of 2 – 4 days.

In case of disaster or disruption, what would it impact the following:

  • Human life: No.
  • Financial loss: Yes.
  • Legal issues: May be.
  • Operating efficiency: May be.
  • Reputation: Yes.

Estimate of financial loss in case of disaster: 2000$ per day.

Revenue loss in case it affects operating efficiency: 1000$ per day.

Other losses:

  • Failure in account records may result in faulty allocation of project funds, which in some cases may lead to total freezing of essential projects due to lack of funding thereby affecting the company’s business prospects and reputation.
  • Discrepancies in account records may also affect the company’s attempt to further its business prospects by repelling investors from taking interest in an organization that fails to maintain transparency in its financial records.

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