Project Risk Impacts

Project Risk Impacts define standardized severity ratings for assessing the potential consequences if project risks occur, supporting systematic risk analysis and response planning. Create impact ratings with descriptive names and explanations (for example, "Critical" for risks threatening project viability, "High" for major cost or schedule impacts, "Medium" for manageable setbacks, "Low" for minor inconveniences, "Negligible" for minimal effects) that project managers select when recording Project Risks. When documenting a risk (for example, "key supplier bankruptcy may halt procurement"), assign an appropriate Impact rating alongside the Probability rating to calculate overall risk severity and prioritization. This enables consistent risk scoring across projects (all project managers use the same impact definitions), facilitates risk prioritization when combined with probability (Critical impact + High probability = immediate mitigation required), and supports resource allocation decisions (focus mitigation efforts on highest-impact risks). Organizations typically define 3-5 impact levels matching their risk management framework, often with quantified thresholds (for example, Critical = >£100k cost impact or >4 weeks delay, High = £50k-£100k or 2-4 weeks delay), ensuring project teams consistently assess and communicate risk consequences to stakeholders and leadership.