What is a Business Impact Analysis?

The Business Impact Analysis process is a key component of business continuity planning in an organization. The BIA seeks to gather information from all parts of the business and helps understand the organization. The Business Impact Analysis is the cornerstone on which an effective Business Continuity program is put in place, leading to a resilient business that is recoverable under most conditions.

Business Impact Analysis Definition
Different Business Continuity practitioners will have different definitions, but the Business Continuity Institute define the BIA as :
The BIA identifies the urgency of each business activity undertaken by the organization; by assessing the impact over time of an interruption to this activity on the delivery of products or services. This information is used to identify the timescale of appropriate continuity and resumption strategies for each activity individually and in relation to one another.
Or :
The Business Impact Analysis is the foundation on which the whole BCM process is built. It identifies, quantifies and qualifies the business impacts of a loss, interruption or disruption of business activities on an organization and provides the data from which appropriate continuity strategies can br determined. 

Role of Business Impact Analysis in Business Continuity Planning
In the Business Continuity life cycle, one of the earlier phases involves Understanding The Organization. Before any recovery strategies can be put into place, a thorough and comprenhensive knowledge of the business is required. The three tools for understanding your organization, for business continuity purposes, are :
1. Business Impact Analysis (BIA) for evaluating the impact over time of a disruption to an organization's ability to operate.
2. Continuity Requirements Analysis (CRA) to estimate the resources, facilities and external services that each activity will require at both resumption and return to normal after a disruption.
3. Risk Assessment to estimate the likelihood and impact on specific functions from known threats.

The BIA, along with a Disaster Recovery Plan, a Business Coninuity Plan and a Crisis Management Plan, is an essential piece of documentation for any Business Continuity Program.