Likelihood and Impact Analysis

Likelihood and Impact Analysis is a method used to evaluate potential risks by assessing how probable they are (likelihood) and the possible consequences if they occur (impact). This helps organizations prioritize which risks need attention by understanding which are most likely to happen and could cause significant harm. For example, a company might determine that a cybersecurity breach is highly likely and could severely damage its reputation, so it focuses on strengthening security measures. This process aids in making informed decisions to manage and mitigate risks effectively.