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Running Head: QUANTITATIVE IMPACT ANALYSIS 1
QUANTITATIVE IMPACT ANALYSIS
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QUANTITATIVE IMPACT ANALYSIS 2
Question: As the Business Continuity Manager, you assign responsibilities for the completion of
the Business Impact Analysis to each member of your team. You explain to your staff that they
will be responsible to calculate the annual loss expectancy (ALE) of assigned risks. Your staff
looks at you bewildered, so you need to explain the formula to them and how to use it.
What explanation would you give so that your staff understands that formula?
Provide an example of how to use the formula.
Develop a matrix using the formula as part of your example.
The main objective of business impact analysis is to ensure that the most probable types of risks
to the firm have been identified and mitigation measures put in place before the risks cause a lot
of damage to the firm. Business impact analysis is an organized process to determine and
evaluate the potential effects of a given thread to the firm’s most critical business assert or
process. It involves identification of the threads and ways to minimize its effect or prevent it
from occurring.
This also involves identification of costs linked to failures due to thread including the loss of
cash flows, replacement of the damaged assert, paid salaries, profits loss, information, staff and
data loss among others. It helps quantify the importance of the business components and gives
ways to allocate funds for measures to protect this components.
In most cases, the impact is expressed in form of money that needs calculation of different values
including the total cost of occurrence, the assert value, the exposure factor, the single loss
expectancy and the annualized loss expectancy. The above values can be calculated as explained
below.

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