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Ratneshwar jha risk analysis and mitigation precedence modeling

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  • 1. Risk Analysis And Mitigation Precedence Modeling
    RatneshwarJha
    20 Nov 2010
  • 2. Risk Analysis And Mitigation Precedence Modeling
    Agenda
    Present Risk Models
    Proposed Risk Model - Assumption
    Various Phases of Proposed Model
    Risk Influence Factor Analysis
    Risk Discovery Phase
    Mitigation Prioritization
    Risk Variance With Time
    • Benefits Of Proposed Risk Models
  • Contents
    Present Risk Models
    Proposed Risk Model
    Assumptions
    Phases in Proposed risk model
    Various Phases of Proposed Model
    Phase 1: Risk Influence Factor Analysis
    Phase 2: Risk Network Generation Phase
    What –if And Why Analysis
    Risk Dependency Analysis
    Phase 3: Risk Mitigation Prioritization
    Risk Exposure
    Mitigation Exposure
    Risk Dependency Analysis
    Phase 4: Risk Mitigation Analysis
    • Benefits Of Proposed Risk Models
    Risk Analysis And Mitigation Precedence Modeling
  • 3. Present Risk Analysis Model
    Present model : Prioritized based on risk exposure
    Risk exposure:
    Impact & Probability on Project
    Answer to question “Would we care?”
    Risk Attributes : Subjective and Non-quantifiable
    Low Motivation in team, Skills, Performance, Satisfaction
    Present Risk Model :
    Fails in case of same Risk Exposure
    Doesn’t include inter-dependencies between risks
    Unable to predict risk /mitigation behavior in future
    Partially answers “Would we care?” analogy
    Risk Analysis And Mitigation Precedence Modeling
  • 4. Contents
    Present Risk Models
    Proposed Risk Model
    Assumptions
    Phases in Proposed risk model
    Various Phases of Proposed Model
    Phase 1: Risk Influence Factor Analysis
    Phase 2: Risk Network Generation Phase
    What –if And Why Analysis
    Risk Dependency Analysis
    Phase 3: Risk Mitigation Prioritization
    Risk Exposure
    Mitigation Exposure
    Risk Dependency Analysis
    Phase 4: Risk Mitigation Analysis
    • Benefits Of Proposed Risk Models
    Risk Analysis And Mitigation Precedence Modeling
  • 5. Proposed Risk Model
    Proposed Model:
    Scope : Large/Small Eco-system
    Models on Risk exposure, Mitigation exposure and interdependencies among the risks.
    Based on above parameter Mitigation priority is assigned.
    Benefits :
    Better mitigation prioritization
    Mitigation approach
    Predicts risk/mitigation behavior in future
    Assumptions :
    • Some risk influence other risk’s strength that is, risk should not be viewed as independent entity while analyzing it
    Some risk has certain element of opportunity associated with it which can be cased by the way it is prioritized and mitigated
    • Risk’s strength is dependent on time field
    Risk Analysis And Mitigation Precedence Modeling
  • 6. Phases in Risk Model
    Risk Influence Factor Analysis:
    • Determines venerability of a risk category
    Risk Network Generation:
    • What – If And Why Analysis
    • 7. Risk Dependency Analysis
    Risk Mitigation Prioritization:
    • Risk Exposure
    • 8. Mitigation Exposure
    Risk Dependency Analysis:
    • Takes risk dependencies in account while prioritizing risk.
    Mitigation Variance with Time:
    • Amount of mitigation.
    • 9. Risk priority at any time.
    Risk Analysis And Mitigation Precedence Modeling
  • 10. Contents
    Present Risk Models
    Proposed Risk Model
    Assumptions
    Phases in Proposed risk model
    Various Phases of Proposed Model
    Phase 1: Risk Influence Factor Analysis
    Phase 2: Risk Network Generation Phase
    What –if And Why Analysis
    Risk Dependency Analysis
    Phase 3: Risk Mitigation Prioritization
    Risk Exposure
    Mitigation Exposure
    Risk Dependency Analysis
    Phase 4: Risk Mitigation Analysis
    • Benefits Of Proposed Risk Models
    Risk Analysis And Mitigation Precedence Modeling
  • 11. Phase 1: Risk Influence Factor Analysis
    • Entities that influences risk and its category
    • 12. Widely used in social /medical risk management
    • 13. Human Resource: Salary, Location of work, Higher Studies
    • 14. Best represented by Bayesian Networks where a risk node is assumed as child node and RIFs as parent nodes affecting.
    • 15. P(R) = P(R | PA(R) )
    • 16. “The more influential are the RIFs on a risk category, the more is the chances of risk occurrence in that category.”
    Risk Analysis And Mitigation Precedence Modeling
  • 17. Contents
    Present Risk Models
    Proposed Risk Model
    Assumptions
    Phases in Proposed risk model
    Various Phases of Proposed Model
    Phase 1: Risk Influence Factor Analysis
    Phase 2: Risk Network Generation Phase
    What –if And Why Analysis
    Risk Dependency Analysis
    Phase 3: Risk Mitigation Prioritization
    Risk Exposure
    Mitigation Exposure
    Risk Dependency Analysis
    Phase 4: Risk Mitigation Analysis
    • Benefits Of Proposed Risk Models
    Risk Analysis And Mitigation Precedence Modeling
  • 18. “What-If” for a risk category
    Answer to “Why”
    Properly identify the risk attributes
    New Risk Identified.
    Phase 2: Risk Network Generation
    Risk discovery:
    Starts from conceptualization and ends till Go-Live
    Iteratively and frequently revisited
    Frequency depends in project health
    Risk Discovery Variants:
    What-If and Why scenarios
    Risk Dependency analysis
    What –If And Why Scenarios:
    What –If generates potential fault point in project
    Why validate the above fault points
    Risk Analysis And Mitigation Precedence Modeling
  • 19. Phase 2: Risk Network Generation
    Dependency Analysis:
    • Risk are interrelated either functionally or subjectively
    • 20. Risk’s strength get affected by other dependent risks
    • 21. Use to discover new potential risks
    • 22. Use to prioritize risk mitigation
    Risk Analysis And Mitigation Precedence Modeling
  • 23. Phase 2: Risk Network Generation
    Graphical diagram of Risk tree
    Risk Network Tree Formation
    The dependent risk forms risk network tree structure with the child risk as root.
    In a project , suppose following risks are identified:
    R1: Not having sufficient license for engineering tool
    R2: Engineering skills is low
    R3: Schedule commitment looks aggressive.
    R1 is affecting risk R2 and R3 and R2 is affecting risk R3.
    R3
    R2
    R1
    Risk Analysis And Mitigation Precedence Modeling
  • 24. Contents
    Present Risk Models
    Proposed Risk Model
    Assumptions
    Phases in Proposed risk model
    Various Phases of Proposed Model
    Phase 1: Risk Influence Factor Analysis
    Phase 2: Risk Network Generation Phase
    What –if And Why Analysis
    Risk Dependency Analysis
    Phase 3: Risk Mitigation Prioritization
    Risk Exposure
    Mitigation Exposure
    Risk Dependency Analysis
    Phase 4: Risk Mitigation Analysis
    • Benefits Of Proposed Risk Models
    Risk Analysis And Mitigation Precedence Modeling
  • 25. Phase 3: Risk Mitigation Prioritization
    Risk Mitigation prioritization phase involves following factor:
    Risk Exposure (R.E)
    Mitigation Exposure (M.E)
    • Cost Benefit Factor
    • 26. Time Factor
    Risk Dependencies
    • Mitigation Exposure:
    Cost Benefit Factor (C.B.T):
    Describes relative financial benefit involved in mitigating a risk
    C.B.T = (1 – (Cost of Mitigation/Amount at Stake)) *10
    Time Factor (T.E):
    Risks which have greater time for mitigation comes low in mitigation priority.
    T.E = (Expected time for Mitigation/Total Time available Mitigation) *10
    Risk Analysis And Mitigation Precedence Modeling
  • 27. Phase 3: Risk Mitigation Prioritization
    Mitigation Exposure:
    Defines the overall drive to mitigate a given risk.
    Average of the C.B.T and T.E factors involved.
    M.E = (C.B.T + T.E)/2
    Alone Mitigation Factor (A.M.F):
    Represents the individual mitigation priority that a risk alone carries.
    A.M.F (R) = R.E * M.E
    Risk Analysis And Mitigation Precedence Modeling
  • 28. Phase 3: Risk Mitigation Prioritization
    Total Mitigation Factor (T.M.F):
    The Alone Mitigation Factor (A.M.F) is calculated without considering risk dependencies.
    Total Mitigation factor for a risk node takes risk dependencies into picture
    T.M.F(R) = A.M.F(R)+C (R|PA(R))* T.M.F (PA(R))
    On the basis of T.M.F factor of risks, risk are prioritized for mitigation.
    Dependency Factor:
    C(R|PA(R)) = P(R | PA(R)) * ( IR/ (IR+IPA(R)) )
    v
    Risk Analysis And Mitigation Precedence Modeling
  • 29. Phase 3: Risk Mitigation Prioritization
    R1 and R2 are the risks and R2 affects R1 by 0.6. The statistics are listed as follows:
    • R1:
    A.M.F = 20
    T.M.F = A.M.F (R1) + T.M.F(R2) * C21
    = 20 + 20 * 0.6 = 32
    Here C21 is Dependency Factor of R2 on R1.
    • R2 :
    A.M.F = 20
    T.M.F=A.M.F=20 as no risk is connected to R2.
    Risk Analysis And Mitigation Precedence Modeling
  • 30. Contents
    Present Risk Models
    Proposed Risk Model
    Assumptions
    Phases in Proposed risk model
    Various Phases of Proposed Model
    Phase 1: Risk Influence Factor Analysis
    Phase 2: Risk Network Generation Phase
    What –if And Why Analysis
    Risk Dependency Analysis
    Phase 3: Risk Mitigation Prioritization
    Risk Exposure
    Mitigation Exposure
    Risk Dependency Analysis
    Phase 4: Risk Mitigation Analysis
    • Benefits Of Proposed Risk Models
    Risk Analysis And Mitigation Precedence Modeling
  • 31. Risk Mitigation Analysis
    Analyzing R2 mitigation variance
    Analyzing all risks together
    Risk Analysis And Mitigation Precedence Modeling
  • 32. Contents
    Present Risk Models
    Proposed Risk Model
    Assumptions
    Phases in Proposed risk model
    Various Phases of Proposed Model
    Phase 1: Risk Influence Factor Analysis
    Phase 2: Risk Network Generation Phase
    What –if And Why Analysis
    Risk Dependency Analysis
    Phase 3: Risk Mitigation Prioritization
    Risk Exposure
    Mitigation Exposure
    Risk Dependency Analysis
    Phase 4: Risk Mitigation Analysis
    • Benefits Of Proposed Risk Models
    Risk Analysis And Mitigation Precedence Modeling
  • 33. Benefits Of Proposed Model
    Proposed Model
    Presents a clear picture to prioritize risk when the risk exposures are similar.
    It has better predictability for risk. Hence the project can be planned in more better way.
    Provides better mitigation prioritization and hence, offers better mitigation plan.
    Current Model
    Fails to prioritize the risk when risk exposures are similar.
    Does not offer predictability hence planning business or project is a little difficult with this approach.
    It is not so robust and futuristic as it does not take various parameters in consideration.
    Risk Analysis And Mitigation Precedence Modeling
  • 34. THANK YOU
    Risk Analysis And Mitigation Precedence Modeling

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