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- 1. Risk Analysis And Mitigation Precedence Modeling<br />RatneshwarJha<br />20 Nov 2010<br />
- 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. 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. 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. 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. 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. Risk Dependency Analysis</li></ul>Risk Mitigation Prioritization:<br /><ul><li>Risk Exposure
- 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. Risk priority at any time.</li></ul>Risk Analysis And Mitigation Precedence Modeling<br />
- 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. Phase 1: Risk Influence Factor Analysis<br /><ul><li>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.”</li></ul>Risk Analysis And Mitigation Precedence Modeling<br />
- 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. “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. Phase 2: Risk Network Generation<br />Dependency Analysis:<br /><ul><li>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</li></ul>Risk Analysis And Mitigation Precedence Modeling<br />
- 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. 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. 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. 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. 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. 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. 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. 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. Risk Mitigation Analysis<br />Analyzing R2 mitigation variance<br />Analyzing all risks together<br />Risk Analysis And Mitigation Precedence Modeling<br />
- 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. 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. THANK YOU<br />Risk Analysis And Mitigation Precedence Modeling<br />

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