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Ratneshwar jha risk analysis and mitigation precedence modeling

by PMInstituteIndia on Dec 03, 2010

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Ratneshwar jha risk analysis and mitigation precedence modeling — Presentation Transcript

Risk Analysis And Mitigation Precedence Modeling
RatneshwarJha
20 Nov 2010
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
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
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
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
Phases in Risk Model
Risk Influence Factor Analysis:
- Determines venerability of a risk category
Risk Network Generation:
- What – If And Why Analysis
- Risk Dependency Analysis
Risk Mitigation Prioritization:
- Risk Exposure
- Mitigation Exposure
Risk Dependency Analysis:
- Takes risk dependencies in account while prioritizing risk.
Mitigation Variance with Time:
- Amount of mitigation.
- Risk priority at any time.
Risk Analysis And Mitigation Precedence Modeling
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
Phase 1: Risk Influence Factor Analysis
- Entities that influences risk and its category
- Widely used in social /medical risk management
- Human Resource: Salary, Location of work, Higher Studies
- Best represented by Bayesian Networks where a risk node is assumed as child node and RIFs as parent nodes affecting.
- P(R) = P(R | PA(R) )
- “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
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
“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
Phase 2: Risk Network Generation
Dependency Analysis:
- Risk are interrelated either functionally or subjectively
- Risk’s strength get affected by other dependent risks
- Use to discover new potential risks
- Use to prioritize risk mitigation
Risk Analysis And Mitigation Precedence Modeling
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
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
Phase 3: Risk Mitigation Prioritization
Risk Mitigation prioritization phase involves following factor:
Risk Exposure (R.E)
Mitigation Exposure (M.E)
- Cost Benefit Factor
- 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
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
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
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
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
Risk Mitigation Analysis
Analyzing R2 mitigation variance
Analyzing all risks together
Risk Analysis And Mitigation Precedence Modeling
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
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
THANK YOU
Risk Analysis And Mitigation Precedence Modeling