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In this presentation we discuss the liabilities brought to you by Risk Management approaches using “Risk Matrices”, Probability-Impact Graphs, “Heat Maps” (we will use the acronym “PIGs” generically, to also include risk matrices and heat maps).
Despite their notoriety, PIGs are considered Standard Practices through the world by Risk practitioners, PIGs have critical and potentially damaging intrinsic problems. That's what Riskope have learned thanks to two decades of Risk Assessments for interesting and unusual projects.
When looking at Risk Assessments of financial institutions, industries, operations, plants, networks, we can affirm that PIGs do not fly. They are misleading and could get their users straight in front of a Judge.
Riskope is not the only entity to reckon this. Academia, other consultants around the world are indeed starting to or have already published papers going in the same direction.
A formal yet simple approach to replace PIGs, called ORE (Optimum Risk Estimates (c)Oboni Riskope Associates Inc.), which avoids the pitfalls and liabilities, is presented.
Like PIGs, ORE can be applied to a wide range of potential risks, but leads to a clearer, rational, defensible description of the institution's risk environment (risk horizon).
The benefits brought by using ORE are explained in this presentation using a real life Risk Assessment. Happily, ORE can reuse most of the work you have already developed to establish your PIGs.
With Riskope's ORE it is possible to upgrade existing corporate Risk Register and to steer your institution/company/project towards a rational, defensible and transparent stance.