ProjectConnections com Template Impact Analysis Contributed by Sinikka Waugh and ProjectConnections Staff



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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.

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.

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.



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.



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 / User Impact

Other Issues / Considerations

Overall Impact

Contact

Name

Priority

Impact of Solution

Budget Impact

Schedule Impact

Risk Impact













Remittance Processing - Hardware

Medium

Requires purchase of new remittance processing equipment

High

$100 - $200K for new equipment, unbudgeted



High

Schedule increase ~3 mo.

Implementation delay: 2 weeks for addtnl training


Low

New hardware is not complex and has been used by others for > 5 years with no reported issues.



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

Remittance Processing - Software

Medium

Eliminates one FTE from daily remittance processing team

Low

some s/w development currently in budget



Low

Some software development effort currently in schedule



Medium

Unknown s/w interface / interaction with new equipment



Medium

Learning curve will impact process speed during first qtr after implementation, may cause rework and customer satisfaction issues due to errors



Medium technical risk

S. Radiya

Remittance Processing - Users

Medium

Eliminates one FTE from daily remittance processing team

None

Medium

Implementation delay by 2 weeks for additional training



None

Medium

Learning curve will impact process speed during first quarter after implementation, may cause additional rework and customer satisfaction issues due to errors



Small team already spread thin during peak seasons. Need to identify other resources to support excess volumes or we will miss customer service level agreements.

Medium capacity from smaller staff w/ new equipment unknown

S. Radiya

Customer Service

High

Remittance data will appear on customer account 3 days sooner than current state

None

None

None

None

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

Low customer satisfaction should improve w/ proposed solution

R. Evans

Mail processing

Low

No change

No change

No change

No change

No change

No change

None




Financial Reporting System

High

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

M. Stewart

Cumulative Impact







$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

High - increase in budget for new equipment



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