In business, nothing is certain. Any business activity including those related to discounts or coupon code mistakes, promotions, or marketing campaigns… also carries with it potential risks and the worst possible outcomes. It is a business that does not make a desired profit, and may even suffer a loss in the early years of operating the business.

At the same time, a lot of things can go wrong, regardless of whether it is within the control of the manager or not. So Research is a very important part of business. In this article, I will introduce readers to the impact of research on business in the most specific way!

The problems don’t end with uncertainty about the company’s net income, or concerns about the company’s potential or position now (and in the future). But it is also unexpected events and situations that can strike each organization right in its daily activities. For example, businesses are also vulnerable to accidents at work. Emergencies can occur and have an impact on business operations. Worse, when natural and man-made disasters occur, business will inevitably suffer.

Under such circumstances, the helpless attitude of “there is nothing we can do” will not benefit all businesses. Part of effective management is ensuring that the right safeguards and response mechanisms are in place in the event of unexpected events.

Usually this is put in place in the form of a follow-up plan or disaster recovery program, which is intended to help the company stay up and running during the period between the aftermath of the disaster and the when activities resume and return to normal.

The development of these measures cannot be done by accident. The key members of the company will decide what action to take immediately, or what recovery process to apply.

However, this approach will not be effective, not to mention the stress on the management side, or the pressure on the implementers. It is important for management to fully assess the potential loss or damage that the business can sustain in the event of an accident and activities that are forced to stop for a certain period of time.

The tool that comes in handy in this case is called Business Impact Analysis.

BUSINESS IMPACT ANALYSIS (BIA)

Business Impact Analysis or BIA refers to the process of identifying, assessing, and estimating the possible effects of disruptions or disruptions of material or functional activities and business processes due to accidents, emergencies or natural disasters. It is a systematic method for predicting possible consequences and possible disruptions, often under a worst-case scenario.

In contrast, the UK has provided specific guidelines for BIA implementation and has shown that the BIA process also includes analysis of business functions or processes that will directly (and indirectly) affected by the interruption.

The result of the BIA is the Business Impact Analysis Report, which provides a detailed description of the potential risks a business will face when a disaster occurs.

Much of the reporting will be quantitative, as it is the language that makes the most impression on managers and employees involved in developing disaster recovery strategies. It will list all the vulnerabilities of the business, including the scenarios that can be missed. The impact of these disruptions will also be included in the report.

Large enterprises have integrated BIA into their systems with their robust and robust disaster planning program and made it one of the critical phases that cannot be ignored.

In fact, these disaster recovery programs would not have been fully developed had the BIA not been implemented. Because the output strategies and policies of the BIA will be so large that they will be included in the company’s disaster recovery program.

Therefore, we can surmise that the BIA has two components: an exploration part and a planning part.

ASSUMPTION IN BIA

BIA operates under two assumptions:

1. Every component of the company depends on the ongoing or ongoing operations of all others.
2. Some components of the organization are more important than others and may need to allocate larger funds if a loss scenario occurs.

For example, assume that the operations of a company’s production line will depend on the human resource function, in terms of recruitment.

If HR cannot carry out the recruitment and personnel management process, production will be affected.

Likewise, if Finance cannot process payroll payments and purchase raw materials for production, production may also be disrupted.

When disaster strikes, however, the departments that suffer the most are the areas of the Finance department and the corporate cafeteria.

The allocation of funds for the restoration and rehabilitation of the two departments will be different. Production will continue even if the cafeteria closes without telling the Finance Department.

As a result, the company will spend more on reviving the Finance Department than the corporate cafeteria.

What are the possible loss scenarios that the business faces and have the potential to impede or disrupt business operations?

Performing a risk assessment helps a company identify future loss scenarios. One of the most common scenarios occurring in businesses and industries is listed below.

• Incidents: Usually, businesses incur losses due to workplace incidents. For example, a fire at a factory where key business activities often take place could result in closure. A broken pipe in the water supply system can also cause paralysis in the work area for a while. Used machines can malfunction, break down and become unworkable without major repairs or replacement with new machines.
• Urgent: These are unexpected situations that can pose a significant danger, so immediate action is required. Immediate action, in this case, is usually business termination. For example, political and civil unrest can cause street riots and other similar acts of violence. Usually, this will force businesses to close and suspend operations until things have stabilized. While the following are not serious or dangerous, they are also considered emergencies, resulting in operational disruptions. Example is:
• The supplier’s failure to provide the necessary materials and goods and services on time;
• Supplier’s failure to supply raw materials and other necessary goods and services;
• Labor disputes within the company resulting in employees’ refusal to continue working until their complaints are resolved by management;
• Utility failures such as lack of water and electricity;
• Cyber ​​attack, when the company’s information system is threatened by outside forces; and
• The absence of key employees can also cause emergencies.
• Disaster: This can be a natural disaster (force majeure) or a man-made disaster. Examples include earthquakes, tsunamis/storms, large wildfires, large scale power outages or failures, and volcanic activity or even recently covid itself. This can result in physical damage to property, especially those used in operations.

Conclusion

There are no official standards or fixed guidelines on how to conduct a BIA. Businesses, depending on their size, nature, and business environment, change their BIA approach to accommodate these variations.

However, we can present this multi-stage process in general terms, or how most companies do it. There may be some tweaking here and there, but the essence remains the same.