Business Impact Analysis
A systematic process for evaluating the potential effects of disruptions to critical business operations, identifying recovery priorities, and determining the resources needed to maintain or restore essential functions within acceptable timeframes.
A Business Impact Analysis (BIA) is a foundational exercise in business continuity planning that helps organizations understand which processes and systems are most critical to their operations and what the consequences of their disruption would be. The BIA process involves identifying critical business functions, assessing the impact of disruptions over time (financial, operational, legal, reputational), determining maximum acceptable downtime (Recovery Time Objective or RTO) and data loss tolerance (Recovery Point Objective or RPO), and identifying the dependencies (systems, people, third parties) that each function relies upon.
BIA is a key requirement across multiple compliance frameworks. ISO 27001 Annex A control A.5.29 addresses information security during disruption, and the broader ISO 22301 business continuity standard makes BIA a core planning activity. SOC 2's Availability criteria require organizations to demonstrate that they can maintain system availability consistent with service commitments, which necessitates understanding business impact. NIS2 mandates business continuity measures including backup management, disaster recovery, and crisis management, all of which should be informed by a BIA. In technology due diligence, the existence and quality of a BIA demonstrates operational maturity and helps assessors understand the organization's resilience posture.
Conducting a BIA effectively requires input from across the organization, not just IT. Business unit leaders must be involved in assessing the impact of disruptions to their functions, as they understand the operational, financial, and customer-facing consequences. The BIA should be documented formally, reviewed and approved by management, and updated regularly — typically annually or whenever significant changes occur in business processes, technology infrastructure, or organizational structure. The outputs of the BIA directly inform business continuity and disaster recovery plans by prioritizing which systems and processes must be recovered first and what level of redundancy and backup investment is justified.
Related frameworks
Related terms
Business Continuity Plan
A comprehensive document that outlines the procedures and strategies an organization will follow to maintain or rapidly resume critical business functions during and after a significant disruption, covering people, processes, technology, and communication.
Business Continuity
The capability of an organization to continue delivering products and services at acceptable predefined levels following a disruptive incident. Business continuity planning covers the strategies, plans, and procedures needed to ensure operational resilience.
Disaster Recovery
The strategies, plans, and procedures for restoring IT infrastructure, systems, and data following a catastrophic disruption such as a natural disaster, cyberattack, hardware failure, or other event that renders primary systems unavailable.
Risk Appetite
The level and type of risk an organization is willing to accept in pursuit of its objectives. Risk appetite defines the boundaries within which the organization operates and guides decision-making about which risks to accept, mitigate, transfer, or avoid.
Risk Assessment
A structured process for identifying, analyzing, and evaluating information security risks. Risk assessments determine the likelihood and potential impact of threats to an organization's information assets, guiding decisions about which controls to implement.
Assess your compliance posture
Run a free self-assessment for ISO 27001, SOC 2, GDPR, NIS2, or Tech DD and see exactly where you stand.
Start free assessment