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Business Impact Analysis

Find out which disasters are typical for your community or business.  This small investment of time will go a long way toward averting serious damage to your business and minimizing the disruption a crisis can cause.

Large corporations often hire risk managers or consultants with experience in disaster planning and recovery to handle this task, but small businesses can do the analysis and planning on their own.

A Business Impact Analysis determines which business functions and processes are required for the organization to continue to function and fulfill its mission in the event of an emergency.  For example, with an Accounting Department, the Accounts Payable function may be less critical to the survival of the organization than the Accounts Receivable function.  Identify which functions are vital to the organization to continue to exist within a very short period after an emergency.  Determine the consequences that would be encountered as a result of a disruption to each vital business process and information application.  Understand the tangible and intangible losses your business would suffer as a result of a serious disruption to those operations.

Where do you stand right now?  The following chart will help your company recognize and understand hazards and help determine recovery planning priorities.  A security review, by a local security company or engineering firm, can help identify your facility security vulnerabilities.  Identify the federal, state and local codes and regulations such as Occupational Safety and Health (OSHA), fire codes and environmental codes.  Consider the financial impact if your business shuts down as a result of a disaster.  What would the impact be for a day, a week or an entire revenue period?

Sample Vulnerability Analysis Chart

When listing the types of emergencies, think about what can happen within your facility, in your community or at other facilities.  Think about your geographic location.  Keep in mind the proximity to nuclear facilities or businesses that produce hazardous materials.  Think about emergencies from a technical standpoint such as computer failure or those emergencies caused by human error such as substance abuse or poor training.  In the probability column, estimate the likelihood of each emergency happening.  What is the human impact of each emergency?  What is the possibility of death or serious injury?  Consider the property impact.  What are the costs associated with damaged equipment or complete losses?  What is the business impact?  Assess the impact of business interruption such as product distribution or critical supplies.  Internal resources include personnel, back-up systems and equipment such as emergency supplies.  External resources include relationships with fire and police departments, local emergency management agencies, hospitals and community service organizations.

Category:Disaster Planning

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