Framework 182               Change Impact Analysis

Introduction
Inadequate preparation can result in poor decisions with potentially catastrophic consequences; conducting the appropriate impact analysis allows the chance to explore the possible impact of the decisions before implementing them.
"...An impact analysis......is a step-by-step process for determining the potential positive and negative consequences of the business decision..."
Masterclass, 2022
It can be used to look at unplanned disruptive events like loss of data, a breakdown in the supply chain, a natural disaster, etc. In some ways it is similar to scenario planning.
Understanding the potential implications of the decision can help decision-makers make better decisions, eg make contingency plans for potential problems.
One of its common uses is in software development, ie before making a change to software, conducting an impact analysis can highlight potential pitfalls.
Importance of impact analysis
i) minimise loss (as a form of risk management, it lays the foundations to mitigate potential losses due to changes in an organisation, process, product, etc)
ii) prepares for problems (lays the foundations for tackling problems if they should happen)
iii) encourages buy-in (as change can disrupt harmony, by encouraging staff to assess the impact of change in planning for its implementation; it fosters ownership; this is sometimes called the IKEA affect, ie you care more about the furniture you assemble than that you purchase already assembled)
Methodologies
There are 3 main methodologies for assessing the impact of organisational change.
i) traceability impact analysis (usually part of software development to discover the links between different parts of a product;
"...This type of analysis prioritises consistency, ensuring that all the elements of change are aligned with each other, and meet all requirements..."
Masterclass, 2022
There is software available to conduct these analysis.)
ii) dependency impact analysis (this method studies dependencies, ie the effect of a change on an entire system, eg changes in a distribution system impacts on supply chain operation.)
iii) experimental impact analysis (evaluate impact of past disruptions to predict the impact on the future, ie analyse historical data to see how certain decisions caused problems in the past and how to cater for them in the future.)
Steps to conduct impact analysis (6)
i) organise a team (have representatives of all key stakeholders that can be impacted by the change as part of the team)
ii) brainstorm (consider all possible areas of the business that could be impacted by the change, ie list all possible work streams that could be impacted and how they may be impacted)
iii) evaluate (gather all the relevant information that identifies the benefits and consequences of the proposed change)
iv) report findings (write up the findings from all relevant stakeholders; present the findings as a decision tree or influence diagram)
v) make adjustments (get feedback from all relevant stakeholders and make any modifications as required like contingency plans, etc)
vi) implement the change (while making the change, monitor the performance and be prepared to make modifications if required)