The Business Impact parameter defines how critical a supplier is to your organization and represents the supplier’s Inherent Risk.
When determining Business Impact, consider factors such as:
The supplier’s criticality to your business operations
The sensitivity of data shared with the supplier
The supplier’s access to physical facilities or data systems
Business Impact Scale
In Panorays, Business Impact is measured on a 5-point scale:
Minimal
Minor
Moderate
Significant
Severe
💡 Note
Business Impact is a subjective parameter, and different organizations may assign different impact levels to the same supplier.
Best Practice Recommendation
If your organization does not have a standardized Business Impact classification process, it is recommended to assign Moderate Business Impact to all suppliers by default.
Impact on Risk Rating
Business Impact directly affects the overall Risk Rating. For example, a security issue identified in a supplier with a Severe Business Impact will result in a higher risk rating than the same issue found in a supplier with a Minor Business Impact.
Initial Set-Up
By default, Panorays uses a predefined formula within the Business Information fields to auto-recommend a Business Impact based on your responses.
Customizing the Business Impact Calculation
You can customize how Business Impact is recommended to ensure consistent classification across your suppliers.
This allows you to:
Upload or define a custom formula for auto-recommending Business Impact
Assign Business Impact recommendations per answer in the Business Information questions
💡 Example
If a supplier receives access to your internal systems, you can automatically classify them as Severe Business Impact.
Customizations can be made by editing the Business Information Management fields in Company Settings.
Summary
Business Impact helps standardize supplier risk classification and plays a key role in determining overall Risk Ratings. Custom formulas allow you to align impact scoring with your organization’s risk methodology.