A business impact analysis determines and documents the impact of a business disruption event to each critical business process. The entity’s critical business processes and the requirements necessary to undertake each critical business process (as identified using a templates such as the template on page 106 of this workbook) are required for the business impact analysis.
For mature, large, complex or geographically dispersed entities the business impact analysis should be completed following consideration of the whole-of-entity view.
An objective and consistent basis on which to assess the impact of a business disruption event needs to be established. The level of impact can be assessed using a scale, such as the one presented in the table below.

The maximum tolerable period of disruption is set at or above the point where there would be a significant impact on business drivers (Score 4). 2 The maximum period of time that an entity can tolerate the disruption of a critical business process, before the achievement of objectives is adversely affected.
3 The recovery time objective is the target time set for recovery of an activity, product, service, or critical business process after a business disruption event, or recovery of an IT system or application after a business disruption event. 4 The recovery point objective is the point in time (before the business disruption) to which electronic data must be recovered after a business disruption event. It considers disruptions to the activities and resources that support critical business processes.

This moderating process will prioritise the critical business processes at the entity level, and identify commonalities and interdependencies across business units and service areas. In effect, the entity can do without the business process for any time under that point, as it will not prevent the entity from achieving its objectives.

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