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Impact Analysis

An impact analysis is used primarily when “change” occurs. For crisis management teams (CMT), this means performing an impact analysis—both perceived and hypothetical—to determine the impact of a crisis or disaster. A crisis/disaster is the biggest change that any individual, community, or corporation can experience. How and when is an impact analysis performed, and what aspects need to be considered by the CMT?

The first impact analysis performed by a CMT is usually at the outset or discovery of a crisis. Immediately upon being formally notified of the situation, the team must uncover and determine what the impacts are—both positive and negative, real and hypothetical—on the following:

  • Departments/divisions
  • Business processes and operations
  • Technology systems (information technology [IT] infrastructure)
  • Facilities
  • Finances/financial institutions/fines
  • Vendors/partners/suppliers
  • Employees
  • Regulatory/legal requirements
  • Long-term ramifications
  • Service level agreements (SLA) (contracts)
  • The general public (for public relations)

Often during a crisis, the impacts of a decision are determined regarding how to immediately resolve, mitigate, or respond to a specific situation,

Case Study: Impact Analysis during the August 2003 Northeast Blackout

The great northeast American blackout of August 2003 is known around the world, among corporations and communities alike. It is known as a defining moment in business continuity, disaster planning, and emergency response processes.

Some were able to weather the power outage, and many others were unable to respond effectively.

One such corporation—a leading human resource service provider in Canada—experienced the blackout just like many other corporations, yet when performing an impact analysis with its crisis management team (CMT), it was able to manage the situation and continue operations without missing a single submission deadline.

Immediate Activation of Crisis Management Plan

When the blackout occurred at approximately 4:10 P.M. on August 14, the company immediately activated its incident management/crisis management protocols, which brought together representatives from all major lines of business and senior executives using cellular phones and personal message devices that were not impacted by the power outage.

They immediately set to work performing an impact analysis of what they knew about the situation and which activities, based on the known assessment, could be implemented. The team focused on which facilities were impacted, whether operations within those facilities were operational, and which workload activities could be transferred to locations in other parts of the country that were unaffected by the blackout.

Not only did they assess the impact on the nonoperational business units but also the impact on those other facilities taking on the additional workload, as these areas would need to extend business hours and ensure only critical functions were the focus.

This analysis was performed for all areas impacted by the blackout and for those that had the potential of receiving diverted phone calls, e-mails, and other core business functions that would be above their normal level of operational activity. This was performed in conjunction with technology team employees located at the other sites, as they would need to initiate many of the redirection activities because those located at the impacted sites no longer had the ability to do so.

Once the impacts were determined and the appropriate response implemented, an assessment was performed as to the impacts upon external sources. This means that they needed to discover if there was any impact to their clients and partners because the corporation was not available, as many partners had specific timelines—and deadlines—for electronic files to be submitted. In many instances, a missed deadline resulted in a financial penalty, as the corporation's unavailability impacted millions of Canadians, most notably throughout the financial systems of the country.

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