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Tag Archives: BIA

In undertaking a Business Impact Analysis (BIA), the analyst is required to estimate the impact on the organisation of a disruption to a product, services, process, or activity. If you read the literature about undertaking a BIA, you will often find lists of types of impact that can be considered, such as financial or reputational, and in many instances you will see something such as “Damage to the Environment” listed as an impact. This is incorrect, and in a common misconception.

It is incorrect because something such as “Damage to the Environment” is not an impact on the organisation. It is an impact that a disruptive event can have, but the impact on the organisation is what happens as a result. Including such things as a direct impact on the organisation confuses cause with effect. A well known example will illustrate what I mean.

The Deep Water Horizon oil spill has a major impact on the environment of the Gulf of Mexico, but the impact on BP was not environmental. The impact on BP was the reputational damage, the cost of cleaning up the oil spill, the compensation claims, and the fall in share price. Yes, “Damage to the Environment” is an impact, but only in so much as it is the cause of real impacts on the organisation.

Confusing cause and effect is, in my opinion, one of the common causes of poor BIA’s in the public sector. This is because analysts naturally look at the wider effects on society of a disruption to services, rather than the impact on the public sector organisation itself.

 

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How often have you wished that you could undertake a Business Impact Analysis (BIA) quickly, with all the relevant people and decision makers available in one place? For most people, undertaking a BIA is a bit like having a tooth removed very slowly over a period of weeks or months. Very painful.

I’ve been reminded this week of how it doesn’t need to be like this, particularly for a small or medium sized organisation. One of my latest clien’s is a small manufacturing and service company, and I was able to undertake a BIA workshop for the top management in an afternoon. This didn’t just cover the strategic level, but went all the way down to the operational detail of which activities needed to be recovered by when, and what resources were needed to recover each activity. We even spent time on discussing strategy and tactical options for recovery.

What made this possible was not just the size of the company, but that the senior management were willing to put in the time and effort and that they knew the operational detail in their area of responsibility. Such a refreshing change. It would be wonderful if all BIAs were like this, but they’re not. Obviously this is not possible with a large organisation, but the main reasons why it is not possible in most small to medium sized organisations is that the senior team won’t spare the time, and more importantly, they don’t seem to know the operational details! Personally, I call that a failure of management.

Earlier on this week, despite all my knowledge and experience, I made the mistake of failing to explain to one of my client’s the difference between an activity that is important and one that is time critical. The net result was that I nearly lost the client as they felt that I didn’t have an understanding of their organisation and its goals.

Something that’s important needs to be done, but it is not necessarily something that needs to be done shortly after an organisation has been disrupted. For example, it’s important that my company files a tax return, and if it fails to do so it will initially be fined, and will eventually be closed down. However, filing a tax return does not feature on my company’s list of urgent things to be done after a disruption, even if the tax return is due.

Being able to understand the difference between important and time critical activities is critical to the success of any business continuity plan. Being able to explain it to a client, and in my case actually remembering to do so, is critical to the success of any business continuity consultant.