Business Impact Analysis
Now that the world has gone through a global pandemic due to COVID-19, most organizations are updating their business impact analyses or performing new ones.
Describe how pandemics differ from other business disruptions for each of the following areas:
Scale.
Velocity (how quickly things change).
Duration.
Workforce shortage.
External interaction and coordination.
Infrastructure availability.
Describe at least one mitigation method or strategy for each area. Don’t forget to provide your references and links.
Sample Answer
The COVID-19 pandemic highlighted the unique challenges posed by widespread public health crises compared to more typical business disruptions. Organizations updating their Business Impact Analyses (BIAs) must account for these distinctions to build truly resilient strategies.
Here’s how pandemics differ from other business disruptions across key areas, along with mitigation methods:
How Pandemics Differ from Other Business Disruptions
1. Scale
- Difference: Unlike localized events (e.g., a power outage affecting one building, a regional natural disaster, or a targeted cyber attack on a single company), pandemics are global. They affect entire populations, economies, and supply chains simultaneously across continents. This means that traditional mitigation strategies that rely on resources from unaffected regions or redundant systems in different geographical areas are severely challenged or rendered ineffective. Both demand and supply are affected globally and concurrently.
- Mitigation Method: Global Supply Chain Diversification and Regionalization.
- Description: Instead of relying on single-source suppliers or concentrating production in one low-cost region, organizations must diversify their supply chains across multiple countries and regions. This includes identifying alternative suppliers, considering nearshoring or reshoring some production, and holding strategic buffer inventory for critical components. The goal is to reduce reliance on any single point of failure that a widespread health crisis could incapacitate.
- Example: A Kenyan manufacturing company that previously sourced 90% of a critical raw material from China might now aim to source 40% from China, 30% from India, and 30% from a local or regional African supplier to reduce dependence on a single affected zone.