Business Impact Analysis: a first step towards cyber resilience
Business disruption can inflict financial and reputational damage on companies, making it crucial for businesses to be proactive in understanding and mitigating potential risks. A 2021 report by the Economist Intelligence Unit explored the impact of disruptions in the global supply chain. The research found that the financial consequences of disruptions in the surveyed companies averaged 6-10% of annual revenues. It draws attention on companies’ actual preparedness to face cybersecurity incident.
Amidst the continuous evolution of cybersecurity threats, companies must be proactive in getting ready for possible future incidents that could disrupt their activities. This involves embracing a cyber-resilient approach through Business Continuity Management. The very first step of such approach consists in identifying the business’s critical activities and the estimated impact caused in case of disruption. A comprehensive analysis, known as Business Impact Analysis (BIA), has to be conducted to assess the impact of business disruption and estimate the recovery time required for business to get back to normal.
The BIA process involves identifying the organization’s critical activities, evaluating their dependencies, and quantifying the impact of disruptions on the activities. Through detailed analysis, the BIA provides insights into financial losses, operational downtimes, reputational damage, and regulatory implications that could result from various types of disruptions. In this article, we will explore the importance of BIA and the essential checklist for its successful execution.
Roadmap to a perfect Business Impact Analysis
There are several points of attention that have to be taken into account when creating a BIA:
A Senior Sponsor/Support from Management
Having the backing of senior management is crucial for the success of a BIA. A senior sponsor provides the necessary authority and resources required for the process to be carried out effectively, ensuring that it receives the attention and priority it deserves. Typically, a senior manager will sign a policy that sets the requirements for the content and reviews of the BIA’s.
A Methodology
A robust methodology is essential for conducting a comprehensive BIA. It should be systematic, consistent, and tailored to the organization’s unique needs. The methodology ensures that the BIA covers the most critical activities and that the stakeholders understand their role by providing a clear path forward.
Tailored Impact Criteria
At the heart of the BIA lies the impact criteria, which evaluates the severity of disruptions on various aspects of the organization. To maintain consistency, a single business impact scorecard should be developed. Impact criteria may differ across organizations depending on their context, risk landscape, and industry. Typically, these criteria include financial impact, customer delivery impact, regulatory impact, and reputational impact, presented in a table from critical to low priority.
A Dedicated Person/Team
Assigning a dedicated individual or team to conduct the BIA is essential to ensure that the process receives the necessary attention and expertise. They should have a clear idea of the overall business functions of the company and collaborate with various departments to gather accurate data and insights. This will happen through interviews and/or questionnaires with the different business teams to identify potential disruptions and understand their impact.
Realistic RTOs & RPOs
The BIA report shall identify realistic Recovery Time Objective (RTO) and Recovery Point Objective (RPO). The RTO evaluate the longest duration of disruption acceptable for each business process or application. After a disruption, some data might not be recoverable. The RPO indicates the maximum amount of data loss expressed in amount of time, which is typically linked to the backup frequency. It is important that realistic RTO’s and RPO’s are defined and based on business requirements.
Critical Activities & Dependencies
Because some business processes or applications are more critical than other (c.f., their impact), and because dependencies exist between them, they cannot be restored at the same time. It is crucial to define the priorities and sequences to be followed when restoring them. The BIA should help identify critical activities that would inflict the company the most significant damage if not performed. It should also help understand all the dependencies between applications and processes.
Recovery Strategies
Based on the recommendations of the BIA report, businesses can elaborate the strategy to adopt in the event of disruption. If critical activities are properly identified, the report will help identify the most suitable solutions to promptly restore each of these activities. Thereby, preventing substantial losses.
Prepared & Tested Disaster Recovery Plan
Lastly, a well-prepared and regularly tested Disaster Recovery Plan (DRP) is vital to ensure that the organization can execute recovery strategies seamlessly in the event of a disruption.
In conclusion, every business must anticipate disruption and dedicate sufficient time and resources to the elaboration of a well-designed strategy to recover from it. However, conducting a thorough Business Impact Analysis is only a first step towards proper cyber resilience. The implementation and test phases are key steps and will require resources before achieving sufficient resilience. Moreover, organizations must also make sure to update the BIA regularly due to the ever-changing landscape of cyber-threats. Embracing BIA as an integral part of risk management is essential for organizations aiming to thrive in today’s unpredictable business environment.