What does the term "business impact analysis" entail?

The term "business impact analysis" refers specifically to the process of evaluating the effects disruptive events can have on business operations. This analysis aims to determine how various types of disruptions—such as natural disasters, cyber-attacks, or other unexpected incidents—can impact a company's ability to function and deliver products or services. This assessment helps organizations understand potential vulnerabilities and establish priorities for recovery and continuity planning.

By focusing on the implications of disruptive events, a business impact analysis informs the development of strategies to mitigate risks and enhance resilience. It enables decision-makers to identify critical functions and the resources needed to maintain or quickly restore those functions during crises. This process is crucial for creating effective business continuity plans and ensuring ongoing operational capability in the face of challenges.