Ratneshwar jha risk analysis and mitigation precedence modeling

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Ratneshwar jha risk analysis and mitigation precedence modeling

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

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