Risk assessments recognize all of the risks that have the potential to impact the organization’s operations. It calculates both the impact and the forward likelihood of potential events. A risk assessment is therefore greatly concerned with the possible causes of disruption, from which likelihood is then derived. It’s a valuable tool for recognizing threats and taking action to minimize risks to an acceptable level.
Difference between Risk Assessment and Business Impact Analysis
The key difference between the two business continuity tools is that Business Impact Analysis (BIA) does not directly focus on the likelihood of events, rather, it assumes worst-case scenarios.
|Risk Assessment||Business Impact Analysis|
|Examining the assessment, focused on all potential risks and their likelihood, as well as inward-looking, focused on failure modes, the potential impact of events and the existing controls and strategies to mitigate the impact of risks||Examining the analysis of the impacts that may arise when stakeholders are deprived of products and services, as well as an inward analysis of necessary recovery timeframes, tolerances and levels|
|Commonly gives rise to an ongoing treatment programme, systematically managing the risks you face||The mirror of your organisation’s whole-environment situation and what it stands to lose in major disruptions|
|Concludes the same high-level information and techniques as BIA to determine the impact of events, but also looks much deeper, potentially at all areas of threat, causality, failure, error, omission and so on||Concludes information from high-level sources, such as accounts, market data, company, human, environmental, plus legal, and other impact types, demonstrated as sources of loss. Analyses reliance to allow impact assessment at granular and deeper levels|
Whereas Business Impact Analysis can be conducted unescorted by risk assessment, risk assessment can’t reasonably occur without some form of BIA: risk assessment should use BIA to quantify and prioritise the risks it finds.
The ‘siloing effect’ of ISO and other standards that are being adopted by organisations worldwide can result in confusion. Business continuity managers are faced with the artificial exclusivity demanded by compliance on the one hand and the overlapping integrated reality that is business.
ISO 22317 provides best practises for the BIA process, without reiterating any of the points in ISO 22301. However, as it provides information from a generalist perspective, practitioners may find that they need to create a workable roadmap or use business continuity software that is more appropriate to the size and scale of their organization.