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111
Riskope International SA © 2009 www.riskope.com
ISBN: 978-0-9784462-3-9
By F.+C. Oboni
Examples of Tolerability and Ri...
222
Riskope International SA © 2009 www.riskope.com
ISBN: 978-0-9784462-3-9
Risk Based Decision Making
Showcase 1:
Selecti...
333
Riskope International SA © 2009 www.riskope.com
ISBN: 978-0-9784462-3-9
After 15 years of flawless service, an
employe...
444
Riskope International SA © 2009 www.riskope.com
ISBN: 978-0-9784462-3-9
Selecting the best alternative in a clear
and ...
555
Riskope International SA © 2009 www.riskope.com
ISBN: 978-0-9784462-3-9
The following Alternatives were selected
for c...
666
Riskope International SA © 2009 www.riskope.com
ISBN: 978-0-9784462-3-9
A Status Quo Risk Assessment revealed
risks we...
777
Riskope International SA © 2009 www.riskope.com
ISBN: 978-0-9784462-3-9
Then, as 2 out of 3 options were only
planned ...
888
Riskope International SA © 2009 www.riskope.com
ISBN: 978-0-9784462-3-9
* A mathematical model is used
Working with ra...
999
Riskope International SA © 2009 www.riskope.com
ISBN: 978-0-9784462-3-9
* A mathematical model is used
...a very simpl...
101010
Riskope International SA © 2009 www.riskope.com
ISBN: 978-0-9784462-3-9
Comparing the results with the societal
acc...
111111
Riskope International SA © 2009 www.riskope.com
ISBN: 978-0-9784462-3-9
NO Alternative actually “solves” the
proble...
121212
Riskope International SA © 2009 www.riskope.com
ISBN: 978-0-9784462-3-9
Risk Based Decision Making
Showcase 2:
Prio...
131313
Riskope International SA © 2009 www.riskope.com
ISBN: 978-0-9784462-3-9
This system of elements is quite
complex. D...
141414
Riskope International SA © 2009 www.riskope.com
ISBN: 978-0-9784462-3-9
Schematic of the System
In yellow all the d...
151515
Riskope International SA © 2009 www.riskope.com
ISBN: 978-0-9784462-3-9
Results of the Quantitative Maximum
Risk As...
161616
Riskope International SA © 2009 www.riskope.com
ISBN: 978-0-9784462-3-9
To deliver a clear prioritization, Risks
we...
171717
Riskope International SA © 2009 www.riskope.com
ISBN: 978-0-9784462-3-9
We defined the Client's Tolerability curve,...
181818
Riskope International SA © 2009 www.riskope.com
ISBN: 978-0-9784462-3-9
Then we also compared the prior results wit...
191919
Riskope International SA © 2009 www.riskope.com
ISBN: 978-0-9784462-3-9
We computed the portion of Risks above
Tole...
202020
Riskope International SA © 2009 www.riskope.com
ISBN: 978-0-9784462-3-9
The results:
Only 8 elements out of the 20 ...
212121
Riskope International SA © 2009 www.riskope.com
ISBN: 978-0-9784462-3-9
What was accomplished ?
By using a transpar...
222222
Riskope International SA © 2009 www.riskope.com
ISBN: 978-0-9784462-3-9
BUT, more
importantly
Create the basis to a...
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Generalized tolerability and risk based decision making examples 19 oct

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The presentation displays two examples of Phase I Risk Based Decision Making.
Phase I means that a preliminary decision is made based on Risk Prioritization alone, without financial comparative evaluations of the alternatives using CDA-ESM (i.e. evaluating the long term cost of the alternatives including upside and downside risks).

The first example relates to selecting a different transportation mode (or altering a status quo) for the personnel of a remote operation in a country where traffic accidents represent a very high and well known risk. As you will see in the presentation, none of the considered alternatives actually solves the problem (mitigates the risks below an Acceptability societal risk and/or Client's specific Tolerability threshold.

The second example examines a rather complex process (over twenty elements) and defines a prioritized list of mitigative needs. By applying a Tolerability criteria it is possible to rationally, transparently and defensibly focus the attention on the most critical elements of the system. The result? Allotting mitigative funds in the most appropriate and efficient manner.

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Transcript of "Generalized tolerability and risk based decision making examples 19 oct"

  1. 1. 111 Riskope International SA © 2009 www.riskope.com ISBN: 978-0-9784462-3-9 By F.+C. Oboni Examples of Tolerability and Risk Based Decision Making Applications in Businesses
  2. 2. 222 Riskope International SA © 2009 www.riskope.com ISBN: 978-0-9784462-3-9 Risk Based Decision Making Showcase 1: Selecting a Better Personnel Transportation System for a Remote Production Centre
  3. 3. 333 Riskope International SA © 2009 www.riskope.com ISBN: 978-0-9784462-3-9 After 15 years of flawless service, an employees' shuttle bus had an accident with 2 casualties in a country known for high traffic hazards. Management decided to study alternatives to bus shuttling before facing internal and/or external scrutiny, media exposure etc.
  4. 4. 444 Riskope International SA © 2009 www.riskope.com ISBN: 978-0-9784462-3-9 Selecting the best alternative in a clear and transparent way was considered of paramount importance. The penalty: loss of confidence, major strike(s), societal and governmental pressure, etc., unsustainable mitigating costs...
  5. 5. 555 Riskope International SA © 2009 www.riskope.com ISBN: 978-0-9784462-3-9 The following Alternatives were selected for comparison: Alternative 1 Alternative 2 Alternative 3 Bla bla Bla Bla Bla Bla # 1 # 2 # 3 Maintain Status Quo, i.e the bus shuttling on existing roads Build an Airport halfway to the location (only possible location) and then bus shuttle Increase the safety along the road, i.e. an enhanced Status Quo
  6. 6. 666 Riskope International SA © 2009 www.riskope.com ISBN: 978-0-9784462-3-9 A Status Quo Risk Assessment revealed risks were unacceptable (from a societal standpoint). These two lines can be interpreted as the “optimistic” and “pessimistic” acceptability criteria as defined by third parties
  7. 7. 777 Riskope International SA © 2009 www.riskope.com ISBN: 978-0-9784462-3-9 Then, as 2 out of 3 options were only planned (not built yet) we had to estimate probabilities and consequences ranges from literature and experts' opinions. There is no other way to help in this decision making process than going quantitative. Any qualitative approach would only blur the issues...
  8. 8. 888 Riskope International SA © 2009 www.riskope.com ISBN: 978-0-9784462-3-9 * A mathematical model is used Working with ranges, it was possible to generate maximum and minimum scenarios of each risk, for each alternative. A stacked bar graph of Risks can then be build leading for each alternative to...
  9. 9. 999 Riskope International SA © 2009 www.riskope.com ISBN: 978-0-9784462-3-9 * A mathematical model is used ...a very simple, and transparent preliminary risk based selection !
  10. 10. 101010 Riskope International SA © 2009 www.riskope.com ISBN: 978-0-9784462-3-9 Comparing the results with the societal acceptability curves came next... Alternative B Alternative C
  11. 11. 111111 Riskope International SA © 2009 www.riskope.com ISBN: 978-0-9784462-3-9 NO Alternative actually “solves” the problem (mitigates to acceptability). Furthermore the implementation costs and life time costs will be very different: Costs and Risks have to be integrated... CDA/ESM will be the next step!
  12. 12. 121212 Riskope International SA © 2009 www.riskope.com ISBN: 978-0-9784462-3-9 Risk Based Decision Making Showcase 2: Prioritization of Risks related to Process System, its infrastructure and the environment.
  13. 13. 131313 Riskope International SA © 2009 www.riskope.com ISBN: 978-0-9784462-3-9 This system of elements is quite complex. Domino effects are possible in certain case of failures, many of the infrastructure elements could be the target of malevolence (arson, sabotage etc.).
  14. 14. 141414 Riskope International SA © 2009 www.riskope.com ISBN: 978-0-9784462-3-9 Schematic of the System In yellow all the different elements are identified
  15. 15. 151515 Riskope International SA © 2009 www.riskope.com ISBN: 978-0-9784462-3-9 Results of the Quantitative Maximum Risk Assessment for each element, with some scenarios (ranges).
  16. 16. 161616 Riskope International SA © 2009 www.riskope.com ISBN: 978-0-9784462-3-9 To deliver a clear prioritization, Risks were compared to Acceptability and Tolerability curves, as consequences could be financial and/or casualties.
  17. 17. 171717 Riskope International SA © 2009 www.riskope.com ISBN: 978-0-9784462-3-9 We defined the Client's Tolerability curve, checked it was compliant with the envelope we created over the years...and plotted the risks...
  18. 18. 181818 Riskope International SA © 2009 www.riskope.com ISBN: 978-0-9784462-3-9 Then we also compared the prior results with a societal acceptability criteria to make sure we would properly characterize all relevant scenarios.
  19. 19. 191919 Riskope International SA © 2009 www.riskope.com ISBN: 978-0-9784462-3-9 We computed the portion of Risks above Tolerability to have a clear Prioritization.
  20. 20. 202020 Riskope International SA © 2009 www.riskope.com ISBN: 978-0-9784462-3-9 The results: Only 8 elements out of the 20 are above Tolerability and only 2 of them require immediate attention!
  21. 21. 212121 Riskope International SA © 2009 www.riskope.com ISBN: 978-0-9784462-3-9 What was accomplished ? By using a transparent and sound quantitative approach we were able to: Scientifically select the most significant risks, Draw attention to the objective highest exposures (filtering emotional perceptions), and Prioritize them to allow reasonable mitigation in a very focused way. We clearly enhanced the ability to prioritize risks for a rational and sustainable development.
  22. 22. 222222 Riskope International SA © 2009 www.riskope.com ISBN: 978-0-9784462-3-9 BUT, more importantly Create the basis to avoid a slide into a crisis, by proactively controlling the situation. NB: Long term comparison of Alternatives requires the use of more sophisticated tools, such as CDA (Comparative Decision Analysis in replacement to classic NPV
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