2.
The lack of certainty, A state of having limited
knowledge where it is impossible to exactly describe
existing state or future outcome, more than one
possible outcome.
Uncertainty
Sooraj R, DMS, SOM, PU.
3.
A state of uncertainty where some possible outcomes
have an undesired effect or significant loss.
Risk
Sooraj R, DMS, SOM, PU.
4.
1) It’s a technique to identify and assess factors that
may jeopardize the success of a project or achieving
a goal.
2) It helps to define preventive measures to reduce the
probability of these factors from occurring.
3) It identify countermeasures to successfully deal
with these constraints.
What is Risk analysis
Sooraj R, DMS, SOM, PU.
5.
Identifying The Risk
Quantifying The Risk
Risk Analysis
Presenting The Results
Beyond Presentation
Phases of risk analysis
Initial
workshop(s)
Preliminary
quantification
Preliminary
modelling
Detailed
workshops
and
interviews
Further risk
modelling
Using the
analysis...
Focus
in on
signifi
cant
risks
Sooraj R, DMS, SOM, PU.
6.
The initial workshop sessions held to identify the
risks.
The output of the identification exercise: the risk
register.
The use of existing models to identify risks.
Identifying the risks
Sooraj R, DMS, SOM, PU.
7.
The output from the risk identification phase is
normally a risk register; this is a document that
contains some or all of the following for each risk.
· generic risk - the general heading the risk falls
under, e.g. construction risks.
· specific risk - the particular risk being considered,
e.g. bad weather delays construction.
Risk register
Sooraj R, DMS, SOM, PU.
8.
A brief commentary on which risks should be
quantified.
A discussion of the theoretical background to
quantifying risks.
The benefits of separating risks out.
A review of the issues that arise when quantifying
risks with experts.
Quantifying risks
Sooraj R, DMS, SOM, PU.
10.
It is a technique that takes the distributions that have
been specified on the inputs to the model, and uses
them to produce a probability distribution of the
output of interest. It does this by running through
the following sequence of actions as many times as
the user specifies.
Industrial analysis
simulation
Sooraj R, DMS, SOM, PU.
11.
Identifying the relative significance of the risks
relating to each input is an important step in risk
analysis: once the significant risks have been
identified more time can be spent on these, at the
expense of the less important ones. It may be
necessary to revisit the assumptions around the
significant risks, and to do more research. Also, if a
small number of risks dominate all others they
should be disaggregated into smaller components.
Identifying the
significant risks
Sooraj R, DMS, SOM, PU.
12.
Graphical presentation.
Statistical measures.
Presenting it in English.
Presenting the results
Sooraj R, DMS, SOM, PU.
14.
In attempting to value risk there are two measures
that can be considered:
1. · The expected value of the risk.
2. · The range of uncertainty.
Valuing risk
Sooraj R, DMS, SOM, PU.
15.
In practice, it is often the case that we are not
interested in the risk around one cost, or even total
cost. Usually, it is some other measure of project
return, such as net present value (NPV), that is
important. It might seem obvious that a distribution
of NPVs would provide useful additional
information about the risks in a project.
What does a distribution of
NPVs mean?
Sooraj R, DMS, SOM, PU.
16.
Risk analysis is an integral part of the PFI
procurement process, and we outline below the
specific requirements for including risk within PFI
transactions, from the procurer’s (i.e. the public
sector’s) viewpoint.
Risk analysis
Sooraj R, DMS, SOM, PU.
18.
The concepts of closeness to the core business and
market attractiveness can be combined to analyse the
risk of investing in new offerings. The proximity of
the new offering to the core business is measured by
its proximity to current offerings and current
markets.
Description of the Model
Sooraj R, DMS, SOM, PU.
19.
The expert system will position your enterprise on the chart based upon
your description of:
technology
familiarity with the materials
special finishes
quality standards
suppliers bargaining power
threat of substitutes
threat of new entrants
competitive rivalry
bargaining power of the buyers
You can trace through the supporting analysis and its conclusions,
adjusting your input until you are satisfied your description accurately
characterizes your enterprise.
Characterize Your
Enterprise
Sooraj R, DMS, SOM, PU.
20.
Ideal Risky Low Potential Poor Prospect
Close to Core Business
High Market
Attractiveness
Distant from Core
Business
High Market
Attractiveness
Close to Core
Business
Low Market
Attractiveness
Distant from
Core Business
Low Market
Attractiveness
Offerings in this
category represent the
least risk and will be
ideal candidates for
development.
Offerings in this quadrant
are risky to develop since
they stray from the core
business. They will need a
high level of investment,
both in terms of resources
and expertise. Proceed
only if the
long-term corporate
strategy is intended to
develop in this way.
The decision to
proceed should be
based on the
evaluation of the
market potential.
The low
attractiveness of
the market may be
a benefit since it
will be less
lucrative for
competitors.
Offerings in this
quadrant are
poor prospects.
They depart from
the core business
and offer low
market
attractiveness.
Analysis of Your Enterprise
Position
Sooraj R, DMS, SOM, PU.
