What does a 'business impact analysis' evaluate?

A business impact analysis (BIA) is a systematic process that identifies and evaluates the potential effects of disruptions on business operations and financial stability. Its primary focus is on understanding how different types of interruptions—be it natural disasters, cyberattacks, or other crises—could impact critical business functions and the overall organization.

The analysis helps organizations prioritize their resources and recovery strategies by evaluating which processes are most critical to success. By assessing the potential consequences of disruptions, businesses can develop contingency plans that mitigate risk and ensure continuity of operations.

This is why the evaluation of disruption effects connects directly to business operations and financial health, making it integral to risk management and assurance processes.