ProjectConnections.

com Template

Impact Analysis
Contributed by Sinikka Waugh and ProjectConnections Staff

INTRODUCTION: Impact Analysis

The guideline and template content starts on the following page.

What This Is
An Impact Analysis will help you capture and evaluate the impacts, both positive and negative, of a given
solution or change on a project. Understanding how a solution will impact the business areas and systems
within the organization helps with decision making, like selecting one of multiple solution options or
evaluating the addition or revision of a requirement. In addition to defining the work to be done from a
technical and project perspective, it also starts identification of the change management planning efforts
that will be necessary if the solution/change is approved.

Why Its Useful

Within the project lifecycle, and within the domain of business analysis, there are two primary uses for an
impact analysis. The first is to understand the impact a given solution will have on the business. If the
project team needs to choose between multiple options, for example, completing an impact analysis for
each will help identify which is the more favorable solution.
The other use for an impact analysis is to assess and articulate the impact of any changes that come up
during the project lifecycle. Analyzing the impact of the change helps determine whether or not the change
is feasible and whether or not it should be approved.

How to Use It
1. Clearly define the item or items to be assessed. A clear definition will help you understand
which areas of the business and its processes might be impacted. You may be using the impact
analysis to document the impact of a single item or compare the impacts of multiple options.
2. Understand the goals. Review the objectives and requirements of the project to use as the
baseline for evaluating impact.
3. Decide which areas/domains you will focus on during the analysis. An impact analysis is
similar to a cause-and-effects assessment, so look for areas where the solution or change will affect
people, processes, capabilities, or resources, to name a few. When evaluating several similar items,
such as comparing solution options, developing a common and consistent set of analysis domain
elements will help ensure an apples-to-apples comparison.
4. Gather information and conduct the analysis using the guidelines and template in the following
pages. Impact analyses are part independent assessment (your own assessment of what is known)
and part collection of input from stakeholders, users, the development team, and surrounding
organizations. Use the project's Stakeholder Analysis to identify people and departments that may
have valuable input. (See the Stakeholder Analysis template on our website for an example.)
5. Evaluate the results. Once youve analyzed the information and consolidated it into the analysis
table, step back and evaluate the overall impact.
6. Finally, summarize your findings and develop a recommendation to be provided to the
project stakeholders, sponsor, and project manager.

The guideline and template content starts on the following page.

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ProjectConnections.com Template

Impact Analysis
Contributed by Sinikka Waugh and ProjectConnections Staff

Impact Analysis Template

INTRODUCTION TO IMPACT ANALYSIS
The purpose of an Impact Analysis is to evaluate the effects, both pro and con, of an item under
considerationanything from solutions to a stated problem to a pending organizational change. In order
to be sure you understand all the ramifications of a possible change, not just the obvious ones, it's
important to consider the situation from multiple perspectives. This guideline, and the template that
follows, are designed to help you examine the proposed change(s) as thoroughly as possible.
There is no single way to conduct this type of analysis; each business situation will require unique
considerations of the areas of potential impact (domains). As with any analysis, it is also useful to employ
the help of both a knowledgeable stakeholder and an independent individual to broaden your perspective
and identify areas you might have overlooked.

PREPARING FOR AN IMPACT ANALYSIS

Start by clearly defining the item or items to be assessed.
There's more to a change's impact than how it affects the production or testing schedule; be sure you
trace the impact far enough that you will see as much as possible of the bad and the good that can come
from it. A clear definition of the items under analysis, including attributes and range, will make it easier to
understand what areas of the business, its processes and its organization might be impacted.
If you're evaluating one or more proposed project solutions, this might include the solution
development, implementation, and day-to-day operations efforts following implementation.

If you're evaluating a change to an organization or process, you might need an

assessment of performance both before and after implementation.

Review the project objectives and requirements to develop a baseline for evaluation.
Impact analysis requires a reference for determining the impact of the items under review against the
intended goals of the project. These can include:

Project cost

Development schedule

Risks to the project or domain

Functional requirements

If a solution meets all the project requirement objectives, but also increases development costs, blows the
schedule beyond acceptable limits, and introduces new risks, it might not be the one with the least or
most favorable impact.
Define which business areas (domains) will be involved or changed by implementation.
This is where your analysis will focus. Step back and look at the bigger picture, and consider getting some
outside perspective on the situation.
Start by looking at the process flow charts, systems, and organizations/users who will be
affected by the solution or change.

Consider the potential impact on existing systems, the knowledge and skills of users, and
existing processes or practices.

Create a list of those items and a brief descriptive note about each element or aspect
potentially affected by the solution.

Take note of how you make these decisions for the Context section of your analysis
document.

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See our Terms of Service for information on PMO/group use and corporate subscriptions.

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ProjectConnections.com Template

Impact Analysis
Contributed by Sinikka Waugh and ProjectConnections Staff

CONDUCTING THE IMPACT ANALYSIS

Construct the table
The Impact Analysis table allows decision makers to assess the proposed solution or change against its
effect on each domain it impacts. List the affected business areas in the left-hand column; you will use
this table to capture the assessed impact, including any other issues that should be considered.
Use multiple tables if necessary. When evaluating several similar itemsfor instance,
comparing solution optionscapture the results of each item in a unique table. Trying to assess
separate options in a common table will quickly become confusing and make summary evaluation
difficult. When evaluating multiple solutions it's best to tally a cumulative impact for
development/implementation at the bottom of each table, and use that to compare the options.

Use the same affected business areas in each table. When you're comparing several items,
it's important to use a common and consistent set of domains for every item being analyzed, to
ensure an apples-to-apples comparison. If you happen to identify a new domain during the
analysis, remember to go back and evaluate all the other solutions/options to see how they will
impact that new domain as well. If a domain is impacted only by one solution, you can simply
record "None" or "No Impact" in the other tables, as appropriate.

We've provided two examples of Impact Analysis tables, one for the assessment of an individual option
and another with a weighted scoring approach for evaluating multiple options.
Gather information and conduct the analysis
Impact analyses are part independent assessmentthat is, your own assessment of what is knownand
part collection of input from stakeholders, users, the development team, and surrounding organizations.
Begin by reviewing each step of the process. Ask yourself what would happen if the
solution/change were introduced. What would be different? Look at it from as many different
perspectives as possible.

Interview affected stakeholders and domain owners. Once you've collected their input, ask
who else you should talk to; they may know of impacted domains you overlooked.

Be thorough. A good rule of thumb is to continue soliciting input until youve got at least two
similar inputs corroborating or validating the information.

Carefully assess each impact. Is it beneficial or detrimental to the defined objectives? Why?
Capture your findings in the table(s) you've created.

Quantify the impact whenever possible; it will make it easier to assess the magnitude of an
impact. When the impact can't be directly quantified, you may need to develop a relative scale
(e.g. High/Medium/Low or Good/Bad/Worse/Unacceptable). If you do, document the scale
against ranges, to provide some consistency in ratings and a basis for evaluation.

EVALUATE YOUR FINDINGS AND MAKE A RECOMMENDATION

Once youve analyzed and consolidated the information, step back and evaluate the overall impact.
Remember, all domain areas are not of equal importance; some will affect the project more than others.
Summarize your findings and assess the overall impact to the business, then capture your cumulative
assessment in at the bottom of the table (for multiple analysis items) or in the summary text for the report
(for a single analysis item). Be as quantitative as possible; document the impacts in areas like expenses,
schedule, capacity, and resources.
When you've completed your summary, document your conclusions and recommendation for the
stakeholders, sponsor, and project manager. If you analyzed multiple solution options, recommend the
solution that presents the least or most favorable impact. If you were evaluating the ramifications of
making a change, recommend whether or not to approve and integrate the change.
See the next page for an example of a one-page analysis for analyzing a single proposed solution or
change across multiple domains. Go to page 5 for an example of an impact analysis table to be used
when analyzing multiple options across several domains.

Copyright 2010 Emprend Inc./ProjectConnections.com. Permission for Members use on their projects.
See our Terms of Service for information on PMO/group use and corporate subscriptions.

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ProjectConnections.com Template

Impact Analysis
Contributed by Sinikka Waugh and ProjectConnections Staff

Impact Analysis Example, Format 1 (Analyzing a Proposed Solution)

This analysis is being conducted in order to assess the impact of a proposed solution to the issues with
the remittance processing system. The results of the analysis will be used as part of the solution
evaluation criteria.
Context
Business areas interviewed for impact were identified from the Project Business Context Diagram, which
can be found at the following link: ABCproject_business-context-diagram.pdf. System experts interviewed
for impact were identified from the Project System Context Diagram, which can be found at the following
link: ABCproject_system-context-diagram.pdf.

Impact Analysis Table

Business
Area or
System

Potential Impact

Positive /
Negative

What makes the impact

positive or negative

Magnitude
(small, medium,
large)

Source for
additional
information

Remittance
Processing

Solution requires
purchase of new
remittance processing
equipment

Negative

Current equipment
should last another 3
years.

Large
Expense

S. Radiya

Remittance
Processing

Solution will eliminate

one FTE from daily
remittance processing
team

Negative

Small team is already

spread thin during peak
seasons. Will need to
identify other resources
to support excess
volumes or we will miss
customer service level
agreements.

Medium
Capacity

S. Radiya

Customer
Service

Remittance data will

appear on customer
account 3 days sooner
than current state

Positive

Higher percentage of
customer calls can be
addressed in first call.

Medium
Customer
satisfaction

R. Evans

Mail
processing

No change

Financial
Reporting
System

Change data pull from

remittance processing
from once daily to twice
daily

Negative

Requires 8 hours of
coding/testing, plus will
increase daily system
usage

Small
Project effort

M. Stewart

Summary
The overall impact of the proposed solution to the remittance system issues has large negative impact in
terms of expense due to the purchase price of the system relative to the limited customer satisfaction
benefits being offset by the inability to reduce staff due to the need for surge capacity.
Recommendation
In conclusion, based on the summary assessment of the impacts presented by this proposed solution to
the remittance system issues, the team conducting the analysis recommends that this option be removed
from consideration as a solution on this project.

Copyright 2010 Emprend Inc./ProjectConnections.com. Permission for Members use on their projects.
See our Terms of Service for information on PMO/group use and corporate subscriptions.

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ProjectConnections.com Template

Impact Analysis

Impact Analysis Example, Format 2 (Analyzing Multiple Solutions/Options)

Replicate this table for each solution or option being analyzed. Use the "Cumulative Impact" row to compare and evaluate the options as with Format 1.
Impact on Business Area or System
Name

Priority

Remittance
Processing Hardware

Medium

Remittance
Processing Software

Medium

Remittance
Processing Users

Medium

Customer
Service

High

Mail
processing
Financial
Reporting
System

Low

Cumulative
Impact

High

Impact on Project Development

Schedule
Impact
High
Schedule
increase ~3 mo.
Implementation
delay: 2 weeks
for addtnl
training
Low
Some software
development
effort currently
in schedule
Medium
Implementation
delay by 2
weeks for
additional
training

Implementation /
User Impact

Other Issues /
Considerations

Overall
Impact

Low
Once trained new
hardware will not be an
issue for users

Current equipment
should last another 3
years.

Large
unbudgeted
equipment
expense of up
to $200K

S.
Radiya

Medium
technical risk

S.
Radiya

Medium
capacity from
smaller staff
w/ new
equipment
unknown

S.
Radiya

R.
Evans

M.
Stewart

Impact of
Solution
Requires
purchase of
new remittance
processing
equipment

Budget
Impact
High
$100 - $200K
for new
equipment,
unbudgeted

Eliminates one
FTE from daily
remittance
processing
team
Eliminates one
FTE from daily
remittance
processing
team

Low
some s/w
development
currently in
budget
None

Remittance
data will
appear on
customer
account 3 days
sooner than
current state
No change

None

None

None

No change

No change

No change

No change

No change

Low
customer
satisfaction
should
improve w/
proposed
solution
None

Change data
pull from
remittance
processing
from once daily
to twice daily

Low
Some s/w
development
currently in
budget

Low
Some s/w
development
effort currently
in schedule

Low
Straightforward
change to
existing reporting
system

Low
Increased frequency of
reports will improve
visibility and issue
resolution speed

Requires 8 hours of
coding/testing, plus
will increase daily
system usage

Small
included in
current
project effort

$100 - $200K
increase

Adds 3 months
to
development
schedule

Medium unknown s/w

interface /
interaction with
new equipment

Some issues may occur during early

learning curve

Contact

Risk Impact
Low
New hardware is
not complex and
has been used
by others for > 5
years with no
reported issues.
Medium
Unknown s/w
interface /
interaction with
new equipment
None

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See our Terms of Service for information on PMO/group use and corporate subscriptions.

Medium
Learning curve will impact process speed
during first qtr after implementation, may
cause rework and customer satisfaction issues
due to errors
Medium
Small team already
Learning curve will
spread thin during
impact process speed
peak seasons. Need
during first quarter
to identify other
after implementation,
resources to support
may cause additional
excess volumes or
rework and customer
we will miss
satisfaction issues due customer service
to errors
level agreements.
None
Higher percentage
of customer calls
can be addressed in
first call.

High - increase in
budget for new
equipment

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