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 It’s 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 you’ve 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
consideration—anything 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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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 items—for instance,
comparing solution options—capture 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 assessment—that is, your own assessment of what is known—and
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 you’ve 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 you’ve 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.

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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 Magnitude Source for

Positive / What makes the impact
Area or Potential Impact (small, medium, additional
Negative positive or negative
System large) information
Remittance Solution requires Negative Current equipment Large S. Radiya
Processing purchase of new should last another 3 Expense
remittance processing years.
equipment
Remittance Solution will eliminate Negative Small team is already Medium S. Radiya
Processing one FTE from daily spread thin during peak Capacity
remittance processing seasons. Will need to
team identify other resources
to support excess
volumes or we will miss
customer service level
agreements.
Customer Remittance data will Positive Higher percentage of Medium R. Evans
Service appear on customer customer calls can be Customer
account 3 days sooner addressed in first call. satisfaction
than current state
Mail No change
processing
Financial Change data pull from Negative Requires 8 hours of Small M. Stewart
Reporting remittance processing coding/testing, plus will Project effort
System from once daily to twice increase daily system
daily usage

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.

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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 Impact on Project Development Implementation / Other Issues / Overall Contact
User Impact Considerations Impact
Name Priority Impact of Budget Schedule Risk Impact
Solution Impact Impact
Remittance Medium Requires High High Low Low Current equipment Large S.
Processing - purchase of $100 - $200K Schedule New hardware is Once trained new should last another 3 unbudgeted Radiya
Hardware new remittance for new increase ~3 mo. not complex and hardware will not be an years. equipment
processing equipment, Implementation has been used issue for users expense of up
equipment unbudgeted delay: 2 weeks by others for > 5 to $200K
for addtnl years with no
training reported issues.
Remittance Medium Eliminates one Low Low Medium Medium Medium S.
Processing - FTE from daily some s/w Some software Unknown s/w Learning curve will impact process speed technical risk Radiya
Software remittance development development interface / during first qtr after implementation, may
processing currently in effort currently interaction with cause rework and customer satisfaction issues
team budget in schedule new equipment due to errors
Remittance Medium Eliminates one None Medium None Medium Small team already Medium S.
Processing - FTE from daily Implementation Learning curve will spread thin during capacity from Radiya
Users remittance delay by 2 impact process speed peak seasons. Need smaller staff
processing weeks for during first quarter to identify other w/ new
team additional after implementation, resources to support equipment
training may cause additional excess volumes or unknown
rework and customer we will miss
satisfaction issues due customer service
to errors level agreements.
Customer High Remittance None None None None Higher percentage Low R.
Service data will of customer calls customer Evans
appear on can be addressed in satisfaction
customer first call. should
account 3 days improve w/
sooner than proposed
current state solution
Mail Low No change No change No change No change No change No change None
processing
Financial High Change data Low Low Low Low Requires 8 hours of Small M.
Reporting pull from Some s/w Some s/w Straightforward Increased frequency of coding/testing, plus included in Stewart
System remittance development development change to reports will improve will increase daily current
processing currently in effort currently existing reporting visibility and issue system usage project effort
from once daily budget in schedule system resolution speed
to twice daily
Cumulative $100 - $200K Adds 3 months Medium - Some issues may occur during early High - increase in
Impact increase to unknown s/w learning curve budget for new
development interface / equipment
schedule interaction with
new equipment

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