Introduction
In the modern world, changes in a business’s strategy can have radical implications. An organization must find a way to see the effect of a change before it takes place. Doing so will future-proof the organization against new innovations and enable a business to make the right decision at the right time.
This is where Business Impact Analysis (BIA) comes in. BIA is a widely used method for predicting the impacts that an action will have on a business.
Challenges for Impact Analysis
Predicting the future is always going to be easier said than done. There are a number of common problems a firm may face when starting an impact analysis:
- Picking the right question: Performing an effective business impact analysis will in part depend on the question you are trying to answer, and the data you have available. Questions with a very wide scope will be much harder to analyze.
- Inaccurate or unavailable data: A prediction is only as good as the facts you are basing it on. Data issues can take a wide range of forms, from internal problems with a lack of documentation or poorly managed archives, to external issues relating to untrustworthy sources or a lack of research.
- Lack of procedures: Though impact analysis sounds simple on the surface, creating reports and analysis with no experience is not easy. Having pre-defined templates and reports can speed up the analysis process massively.
- Domain specific problems: Different business areas that are subject to impact analyses can have specific issues related to each area. For example, a technology impact analysis will struggle if cross layer links between IT and Business architecture are not clear.
- Stakeholder buy-in: This can be an issue for any business initiative, and business impact analysis is no different. A properly conducted impact analysis can encompass an entire organization, and if any parts are not on board, this can cause issues for data collection, reporting or even post-analysis implementations.
Document Tracing
A second area that process maps often consider is which documents are updated by the fulfilment of certain activities.
This mapping exercise is useful in itself but as we have already seen, having these mappings also opens the door to understanding what process activities might be affected by a change to a document. A common example of this would be how a change in law can require the update of a quarterly report to an industry regulator.
We have considered some of the ways that the techniques of impact analysis, although more commonly used by the more technical parts of the enterprise, can deliver significant value by building on the process mapping activities undertaken at the business level. Taking advantage of impact analysis does require that the necessary mappings between items exist (or that there is resource available to perform the mapping), but such mappings are already commonly performed in process mapping exercises, in which case it makes sense to take maximum advantage of the corporate intellectual property that has been developed in this way.</
How to succeed with an impact analysis
In order to carry out an impact analysis the organization must first map functions and how they depend on applications, how applications depend on physical hardware...and then trace through from end to end. This can be a manual process, where an architect looks back through historical models to understand this information. Alternatively, many modeling tools have some form of impact analysis functionality.
Orbus Software’s iServer365 tool has built-in impact analysis capabilities, with the central repository containing technology assets, process models and mapping relationships between them, enabling rapid identification of how external events might spread.
More broadly, there are a few general actions that a firm can take to perform a successful impact analysis. Partly this will involve solving some of the common challenges described above; a lot can be solved by properly consulting stakeholders and maintaining control of IT architecture.
When addressing the scope of a business impact analysis, the widely used SMART method can help to rein in excessive analysis, notably with regards to timing and specificity.
Having a convenient and reliable method of collecting information is another wise choice. IServer solves this through the central repository model, but even without such a tool there are solutions such as cloud-based storage and automated data collection through forms.
Summary
As the events of 2020 have demonstrated, businesses need to be prepared to face a huge number of different challenges. While there will always be certain events outside of a firm’s control, what can be prepared for should be prepared for. Business Impact Analysis, whether for technological change, process change, organization change or product change, can offer protection from significant impacts and ensure business continuity.
Last Updated on 16 October, 2024