Regulatory Impact Analysis is a technique that has been widely accepted, mainly due to its multiple benefits. Many countries and organizations consider it a best practice to apply this technique so that decisions can be taken smoothly.
Some of the main benefits of RIA are explained below in detail.
RIA allows administrations to be able to plan in a better way. This is a broad technique that involves scrutinizing several aspects of a decision. With the help of this procedure, companies know what exactly would be the impact of a decision if it were to be taken.
There is more information available to all the parties. RIA brings together relevant information that parties can go through in order to make an informed decision. When there is more information, there is better planning as the decisions are made in the light of facts and not assumptions.
Uncertainty is one of the main reasons why decisions fail. Quite often than not, one has to take decisions without exactly knowing how the factors affecting it will change when the decision is implemented. Things are often vague, especially the external factors, hence reliable information is needed.
RIA analyzes all such factors and gives predictions that are based on research and not merely on guesses. The information derived through the process is, therefore, dependable as well.
One of the biggest fears that decision makers face is the risk of their decisions backfiring. What if they are wrong in their assumptions or judgments and end up causing more damage than good? This is a normal scenario that happens quite a lot of times.
Managers or authorities still end up taking wrong decisions even with proper care. There is no solution to this problem but to study the factors clearly and analyze every point. Neglecting even a single factor can have dire consequences.
The decision maker should know the risks a business faces and then understand how these factors will change with the decision so that he or she can plan to minimize the harm they may cause. It should be remembered that most risks can be minimized with proper care. However, totally eradicating them is a difficult task, if not impossible.
When all the information is available, it becomes easier to take decisions, which shortens the decision making process. However, when one looks at it, the time taken to make a decision may have actually increased if one takes into consideration the time taken to research and analyze. Nonetheless, at the end of the day, the overall process is made much easier and smoother.
Another major advantage of the RIA process is that it helps countries select the most cost-effective option to get the desired results. A big problem in decision making is selecting one out of several options. With the help of this process, the pros and cons of each option are clearly highlighted and it becomes easier to compare them all, making it easy to take decisions and optimize results.