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Home » Business » Impact Analysis: Meaning, Understanding, Types and Necessity

Impact Analysis: Meaning, Understanding, Types and Necessity

By Hitesh Bhasin | October 18, 2019 | Filed Under: Business

Impact analysis is defined as a structural approach adopted by the management level to determine the negative impact of change that has happened because of project implementation or a policy decision.

It is a concept that can tell us about the estimated effect on schedule, effort, and risk due to a change in a specific application or feature.

Table of Contents

  • Meaning of impact analysis
  • Understanding impact analysis
  • Types of impact analysis techniques
    • #1. Experimental –
    • #2. Dependency –
    • #3. Traceability –
  • The necessity of impact analysis

Meaning of impact analysis

Meaning of impact analysis

Impact analysis is conducted by the department that has been directly hit by it so that it can identify and analyze probable costs associated with the change that has happened and find ways and means to rectify it as appropriately as possible.

It can also be seen as a fair assessment of the advantages and disadvantages of pursuing a course of action in light of its probable consequences.

It is all about estimating what the result of a change is and what needs to be modified to accomplish a change. The impact is evaluated on design & architecture, requirements, and schedule and test.

Sometimes new features are incorporated into an application and it becomes necessary to check for changes in its performance.

The impact analysis helps a company to do so with ease.

Understanding impact analysis

We all have heard the proverb look before you leap several times in our life but are you aware that it is the basis of impact analysis. This is a very popular concept that helps a company to avoid any foolish moves and probable pitfalls by thinking the process through.

Business no doubt has a high-risk factor, but it is up to the people involved to minimize those risks and take viable actions that can lead to growth and prosperity.

You cannot simply assume that the step you want to take will be profitable for your business and bring forth a productive change. There is a huge gap between reality and fiction.

Some important questions before implementing a change are whether it will have a positive or a negative impact on your team, efforts, cost, profits, and growth. This is a powerful tool that has been recommended highly by experts.

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It is a formal method of collecting various data and information about the change you want to implement. A good analysis will help a company to understand the areas of deficiencies and make further modifications accordingly.

It can tell you about the pros and cons of your decision and what will the impact be on the overall business.

The impact analysis is used in the fields of strategic management, project management, and change management. It is widely used to evaluate assumptions about a project or planned impacts by comparing different options. It identifies and recommends prevention methods and recovery strategies to mitigate the impact of change on the business.

This is why it is considered a must-do-step that can prove a blessing for everyone concerned.

Types of impact analysis techniques

Types of impact analysis techniques

#1. Experimental –

In this type of impact analysis, proficient design knowledge helps to determine the impact of change. Some examples are informal discussions in a team and reviewing meeting protocols.

#2. Dependency –

In this type of Dependency links between modules, logic, variable and parts are assessed and analyzed to find the consequences of initiating change. Dependency impact analysis occurs at a detailed level.

Dynamic and static algorithms are run on the code to perform dependency impact analysis. The first garners information about program behavior and the second puts its onus on program structure.

#3. Traceability –

In this Traceability links between tests, design elements, specifications, and requirements are captured and analyzed to find the extent of initiating a change. It occurs at a comparably small level.

The necessity of impact analysis

The necessity of impact analysis

Impact analysis is a revered concept and has become necessary in several situations.

  • Impact analysis is generally done to comprehend and identify the probable outcome that can happen after implementing a change. In trying to optimizing the functionality of a product a company can cross the set boundaries and ultimately become responsible for minimizing the overall performance of the product. Impact analysis can save the company from such blunders.
  • The impact analysis helps to list all the dependencies on a particular element so that you can easily make any alterations
  • It tells us about the task that needs to be completed to implement a successful change
  • The impact analysis can easily determine the effort that will be needed for implementing a successful change
  • The necessity of conducting an impact analysis is that it can identify and analyze the model, documents, and files that have to be modified f the company decides to implement the change
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Liked this post? Check out the complete series on Business

About Hitesh Bhasin

Hi, I am an MBA and the CEO of Marketing91. I am a Digital Marketer and an Entrepreneur with 12 Years of experience in Business and Marketing. Business is my passion and i have established myself in multiple industries with a focus on sustainable growth. You will generally find me online at the Marketing91 Academy.

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