Impact

Impact

Impact is a measure of the effect of a risk on one or more project objectives if it occurs. It helps teams assess how significantly a risk event could influence cost, schedule, scope, quality, or stakeholder expectations.

Key Aspects of Impact

• Used in Risk Assessment – Helps determine how severe a risk event would be.
• Measured Qualitatively or Quantitatively – Can be expressed in terms of cost, time, or stakeholder impact.
• Essential for Decision-Making – Prioritizes which risks require mitigation.
• Works with Probability for Risk Analysis – A key factor in risk response planning.

Impact Levels in Risk Analysis

Impact Level	Description
Low	Minor effect; easily managed without major changes.
Moderate	Noticeable impact; requires some adjustments to resources or schedule.
High	Significant disruption; project success may be at risk.
Critical	Major failure; severe impact on project objectives.

Example Scenarios

Software Development

• Risk: A key developer resigns mid-project.
• Impact: Moderate to High – Potential delays while onboarding a replacement.

Construction Project

• Risk: A supplier fails to deliver materials on time.
• Impact: High to Critical – Delays may halt construction and increase costs.

Marketing Campaign

• Risk: A social media backlash against an ad campaign.
• Impact: Critical – Brand reputation damage and loss of customer trust.

Mermaid Diagram: Impact & Risk Flow

graph LR;
    A["Risk Identified"] -->|Assess Probability| B["Likelihood"]
    A -->|Assess Impact| C["Impact Level"]
    B --> D["Risk Matrix Analysis"]
    C --> D
    D --> E["Mitigation or Acceptance"]

Why Impact Matters

• Improves Risk Prioritization – Helps teams focus on the most severe risks.
• Enhances Decision-Making – Supports proactive mitigation strategies.
• Prevents Costly Surprises – Ensures teams prepare for high-impact risks.
• Strengthens Project Resilience – Helps teams adapt effectively when issues arise.

See also: Risk Management, Probability and Impact Matrix, Risk Mitigation, Contingency Planning.