The Business Impact Analysis is an analytic process that aims to reveal business and operational impacts arising from any number of incidents or events (Wrenn, 2005). It is the initial step in the Business Continuity Plan. A Business Impact Analysis should include: * A work flow analysis to identify and prioritize process that must be recovered. * The potential impact of uncontrolled, non-specific events on business processes identified during the work flow analysis. * The impact of legal and regulatory requirements. An estimate of the maximum allowable downtime (MAD) and the associated acceptable level of losses for the identified business processes. * An estimation of recovery time objectives (RTOs), recovery point objectives (RPOs) and recovery of the critical path (those business processes or systems that must receive the highest priority during recovery. ) (Laughery, 2011) The main operation of Omega is selling services to customers. These services are to find the appropriate consultants and resources and to supply their customers with these resources as quickly as possible.
If there are any disruptions in these operations or outages of equipment, Omega will lose money each day and pay large penalties. The operating processes run on a SAP system in an AIX environment. The processes include finding resources for customers, scheduling, invoicing, paycheck distribution, and managing the treasury and short-term funding. If any part of the SAP system has an outage, Omega basically has a two day window to restore the system without borrowing money which would lead to increase in costs and overhead.
The only operations that have a workaround are payroll and the audit and compliance areas. As Reyes Emme mentioned an interview, “by self insuring payroll funding for a week to ten day period, Omega can provide estimated payroll and then rectify many issues once the system is back online . ” Reyes also mentioned that “the audit and compliance areas are not affected in the short term if an outage occurred. ” Cash flow is a very critical process for the organization. Without any money coming in, expenses would grow very fast in a short amount of time.
If a disruption occurred, Omega would have to start borrowing money within two days and could also lose $3-$500,000 per day in interest. Up-to-date information affects 30 to 40% of short-term contracts. The organization is fully reliant on the SAP application for up-to-date information and day-to-day operations. If an outage occurred for a long period of time, the organization would start incurring account payables penalties since they use just-in-time practices. The penalties would be 10% of $100,000 per day.
The main issue that Omega needs to address is the long period of time it takes to recover data from tape backups. Today, it takes three to four days to recover any data. Omega is working with SunGard their vendor to reduce this time frame to twelve to sixteen hours. An effective Business Impact Analysis will assess the impact of a disaster over time. The length of time depends in part on the process. The impact analysis has to identify what this time window is by which recovery has to be in place (Hiles, n. ). Works Cited Hiles, A. (n. d). Business Impact Analysis: What’s Your Downside? Retrieved from http://www. rothstein. com/articles/busimpact. html Laughery, K. (2011). The ABCs of BIAs: The Business Impact Analysis component of Business Continuity Planning. Retrieved from http://www. conetrix. com/articles/The-ABCs-of-BIAs. aspx Wrenn, G. (2005). Ten steps to a successful business impact analysis. Retrieved from http://searchsecurity. techtarget. com/tip/Ten-steps-to-a-successful-business-impact-analysis