A financial services organization needs to quantify the potential operational and financial consequences of service disruptions and establish timeframes for restoring critical functions. Which continuity planning component should they complete first?
Continuity Strategy Formulation
Business Impact Analysis
Plan Validation Exercise
Threat and Vulnerability Assessment
The correct answer is Business Impact Analysis (BIA). The Business Impact Analysis is specifically designed to identify and prioritize critical business functions, determine recovery time objectives (RTOs), and calculate the maximum tolerable downtime for various systems and processes. This analysis forms the foundation of effective business continuity planning by helping organizations understand which functions are most time-sensitive and what the impact would be if these functions were disrupted.
Threat and Vulnerability Assessment focuses on identifying potential risks rather than analyzing the business impact of disruptions. Continuity Strategy Formulation occurs after the BIA when the organization determines how to restore critical functions. Plan Validation Exercise is performed to test the effectiveness of the plan rather than identify critical functions and downtime parameters.
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