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BIA Approach : Types of Impact, Recommendations & Conducting Interviews

and , April 20, 2021, 0 Comments

Change Managers use different approaches to conduct a Business Impact Analysis. There can be several approaches to conduct a BIA. We have discussed an approach that we have carved out based on our change management experience. In the second part of this article we described about the Processes, Preparation and Stakeholder identification. In this article we will go deeper to understand the further steps of the BIA Approach. Let’s get familiar about the Types of Impact, Recommendations, Leadership/Sponsor Alignment and Conducting Interviews.

Types of Impacts
Note that the ‘A’ in BIA stands for ‘Analysis’, not subjective opinion. Hence, it is important to remove subjectivity as much as we can while identifying and categorizing the impacts. One of the most important phases in conducting the BIA is the categorization of impacts. This is a famously confusing aspect and change consultants face confusion while classifying impact categories that are most relevant to the organization. Here are a few impact types:bia-approach-impact-recommendations-interviews-marketexpress-in

Recommendations for identifying impacts

Broad categorization can be as it is stated above, however, here are a few tips to identify the business impact categories:

Tip 1: Dollar Vs. Non-Dollar Impacts – It is always good to categorize impacts into qualitative and quantitative categories. This helps to get a holistic view of the damage caused due to disruptions of various lengths. We suggest taking up three issues each. Making the impacts in each category go beyond six makes the BIA interviews quite long and confusing for the participants.

Tip 2: Something that cannot be measured, cannot be implemented. Hence, keep the categories constant across all departments in the organization. This helps to evaluate the impact of disruptions in a single measuring scale.

Tip 3: The impact should be necessarily chosen keeping the core mission of the business. It should be in-line with the strategy, mission and operation. Most of the BIAs includes  heads like Operating expense, revenue loss, goodwill etc. However, the categories must be derived from what is inimitable to each organization. For an instance, banks working under heavy regulatory boundaries will usually have ‘impact on penalties’ as a major quantitative impact area. Manufacturing organizations will have an impact on the supply chain as a qualitative impact area.

 Leadership / Sponsor Alignment: Connecting Stakeholders

The next step is to share the identified impacts with the departments, the COO, the CFO and get their alignment on the impact categories that are most relevant to the organization’s mission and strategy. Conducting a BIA with the identified impact without taking the sponsor buy-in might force you to re-visit the entire efforts. The next and most critical part is interviewing the stakeholders / leadership. It should be specified clearly that the interview is taken for their benefit and not because you need their help to conduct this.

Conducting the interviews

There is no standard template to follow for a BIA. You may get a lot of free templates on the internet; however, the challenge is what all needs to be taken care of while choosing the right BIA template or creating one.

Recommendations on conducting interviews:

Tip 1: Do not go for templates that reads out a high, medium or low impact. This will be a qualitative data which will be of no use further. It leaves you with non-actionable data.

Tip 2: Keep the change headings concise and not a one liner description. For example, Material approval, Org. structure, Managing supplier contracts etc.

Tip 3: There needs to be a tab for capturing ‘As Is’ and ‘To Be’ to make it clear and make the change visible while discussing the impact. Often times the change is so evident that you may feel there is no requirement of having these two tabs, but we recommend to have these two pointers written so that both the change consultant and the interviewee are aligned on how they are perceiving the current state and future state.

Tip 4: The most important thing here is the Change Description. It should be coherent.

Tip 5: Capture both qualitative and quantitative data for every impact from every interviewee. You can do it as a matrix.

BIA Questionnaire: Select a single business unit or function as a test case. Following is a list of impact categories critical to the questionnaire for the Finance department

  1. Collective financial loss (Revenue lost + Cost incurred): lost revenues, lost sales, monetary penalties, salary paid for unbilled resources
  2. Legal compliance: yes or no, If yes, explanation/implication
  3. Customer confidence: low, medium or high
  4. Supplier confidence: low, medium or high
  5. Organization’s goodwill: low, medium or high
  6. FICO implication– Issues? Accounting standards – global standards – financial implications, end of closure issues
  7. SME interaction – Finance director – outcome of non-performance
  8. Cross functional dependency – cross referencing the impact of procurement/supply chain on the BAU of Finance department – come out with risks/issues that no one has identified and figure out if it is impacting and with the degree of impact

In one of our projects with a manufacturing major of France; we interacted with the SMEs through Focussed Group Discussions (FGDs). They helped us with the ‘as is’ and the ‘to be’ data which we captured in a tailor made template that we prepared explicitly to identify all the critical areas of business where there can be a change impact. The data capture was done in FGDs where we had one-on-one meetings explaining the data pointers to the identified stakeholders; hence reducing the information overload and data redundancy since inception.

We would like to echo that approach is a critical aspect of BIA because the right approach brings the right plan in place which leads to successful implementation. The final step after all these processes is to analyse the data collected. The BIA Analysis becomes input to the change plan. We will discuss BIA Analysis in our trailing article.