A business impact analysis (BIA) provides organizations with a structured way of highlighting worst-case scenarios and determining their likely consequences. It’s a process that lets you identify various mission-critical aspects of your operations, including processes and assets that allow for normal service delivery, and outlines the risks that could compromise them. Knowing what could go wrong leaves you in a stronger position to plan and prepare for achieving continuity in the face of disruption.
More significantly, a BIA does not compartmentalize vulnerable aspects of your operations. Instead, it gives you oversight of dependencies that connect systems and processes so you know how the disruption of one might influence the functionality of another. This knowledge leaves you in a strong position to assign resources appropriately when putting together continuity plans instead of leaving gaps that only become obvious when it’s too late.
An appropriate business impact analysis example is of a retail sector business that relies on inventory management software from a third-party vendor. This is clearly a mission-critical dependency, yet one which is left in the hands of an outsourcing partner. BIA analyses such dependencies, identifies the associated risks and points to options for mitigating them, such as using a software escrow service to guarantee continuity through source code access in the event of vendor failure.
Regardless of the industry in question, BIA analyses dependencies like third-party software or outsourced services, allows for recovery time objectives (RTOs) and recovery point objectives (RPOs) to be estimated, and supports business continuity planning (BCP) and risk management. These top-level advantages apply to businesses of all sizes and are especially useful as organizations seek to scale their operations without exposing themselves to new vulnerabilities.
A BIA is also an excellent framework for regulatory compliance. A range of general and industry-specific rules require organizations to understand and plan for the risks posed to operational resilience. Unless you know what may occur in a crisis, you cannot prove to regulators that continuity is possible when the worst happens. So, in terms of compliance and business continuity, business impact analysis is unquestionably valuable.
“Being proactive and placing security and resilience at the start of any development means that we can confidently explore ideas and push boundaries, safe in the knowledge that we are managing any risk associated with our software supply chain responsibly”.
Andy Ellis
Head of NatWest Ventures
Organizations cannot afford to ignore the threats that face them from a continuity perspective. Operational resilience has become especially pertinent given the proportion of businesses that now outsource some or all of their IT resources to third-party vendors. BIA provides the clarity and certainty necessary to keep regulators and clients happy.
Setting up a Software Escrow Agreement involves identifying critical third-party software and outsourced services, listing key vendors, and documenting essential technical and contractual details such as SLAs and recovery terms, directly supporting the Identify Critical Processes and Inventory Systems and Vendors stages of a BIA.
This process not only clarifies operational dependencies and risks but also ensures that in the event of vendor failure, the organisation retains access to the source code and documentation needed to recover vital services and maintain business continuity.
As part of the Determine Business Impact stage of a BIA, organisations must assess the consequences of third-party software or service disruptions over varying timeframes, considering impacts on revenue, operations, regulatory compliance, and customer trust.
Software Escrow reduces the impact of disruptions by ensuring rapid recovery of critical services through access to source code and essential technical documentation. Software escrow also supports business continuity and strengthens operational resilience, helping protect customer trust and meet regulatory requirements under DORA, PRA, APRA, and FFIEC.
For critical third-party software, organisations must define acceptable downtime (RTO) and data loss (RPO). However, setting these objectives can be challenging, especially when estimating for situations where the vendor is no longer around to support, that’s where software escrow helps.
Software Escrow Verification simulates a release event and times the restoration of the application and data using the source code, build instructions, and technical documentation deposited in escrow. This process provides organisations with concrete evidence of recovery times, enabling more accurate assessments of how quickly services can be restored.
The final stages of a business impact analysis are document findings and update plans. Software Escrow supports this stage by providing clear, verifiable evidence of recovery plans such as escrow agreements, source code deposits, build documentation and recovery time estimates. It also singles out risks which might otherwise be missed, such as a vendor’s refusal to adhere to escrow agreement terms.
These insights make a business impact analysis report more actionable. Moreover, updates to continuity plans and steps involved in disaster recovery can be determined with confidence. Aspects like rebuild procedures and the creation of stronger contractual terms to manage vendor relationships are encompassed here.
Join 14,000 customers in 135+ countries
If a vendor fails, you can take control. A Software Escrow Agreement supports BIA by ensuring access to the source code, data, and materials behind critical third-party software, ensuring recovery. Learn more.
Having a business continuity plan isn’t enough, you need to know it works. Software Escrow Verification supports BIA by enabling you to test and document continuity plans for critical software. Learn more.
If your vendor goes down, you don’t have to. SaaS Escrow supports BIA by securing the code, data, configurations, credentials, and environments needed to recover critical third-party SaaS applications. Learn more.
Book a call to learn how Software Escrow can support your business impact analysis.
