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Business Intelligence, Asset Management and Risk Assessment Based Decision Making

Business Intelligence, Asset Management and Risk Assessment Based Decision Making

May 28th, 2014

Business Intelligence, Asset Management and Risk Assessment Based Decision Making

Today, more than ever, planners and decision makers are held accountable for outcomes often appearing to be beyond their control, generated by decisions made by others, which were made in different times and socio-economic, industrial and legal environments.

Complex and interdependent systems are difficult to grasp and understand.

Business systems have become overwhelmingly complex and interdependent and it is often difficult to gain clear understanding of their elements and operating conditions. However, decision makers can take better decisions, justify them, defend their selections and positions only if they clearly understand their systems and can properly understand their 360-degrees risk environment.

ORE delivers a focused road map for mitigative investment & decision making. In the picture 2 elements significantly require more attention than  the rest of the portfolio.

ORE delivers a focused road map for mitigative investment & decision making. 2 elements significantly require more attention than the rest of the portfolio.

  • Example 1: how can a supplier decide to replace a specific machinery/vehicle in their factories/fleet if they do not know exactly where, how old, how many units they are talking about?
  • Example 2: how can an insurance company decide to move away from a certain type of coverage if they do not have a clear understanding of where that coverage is offered, to which amounts, etc…?

If examples 1,2 make you smile in disbelief, remember, they are real-life examples.

The architecture of hazard and risk registers is vital to ensure reasonable and reliable results of a risk assessment.

In the last two decades Riskope has honed the techniques necessary to model complex and interdependent business systems, compile well engineered hazard and risk register databases for each and every study, would it be a mining operation, a power generating system, a logistic network, commercial wharves, etc. Well before it became a ISO code (55000) and a buzz-word, we were preparing asset management reports for our clients, as subset of the overall 360-big-picture risk assessments. The complete procedure constitutes the core of ORE (Optimum Risk Estimates ©Riskope, also, of course, ISO 31000 principles compliant), the proprietary application that Riskope deploys for all clients requesting a holistic risk assessment and decision making support, world-wide.

  • Horror story: many common practice risk assessments (PIGs) are compiled during “open workshops” during which the facilitator asks the panel to describe their “scenarios”, but no one even attempts to clearly define the system under consideration. Lacking that vital information it is impossible to get a valid and rational risk assessment.

Riskope recognized very early that hazard and risk register databases have to be drillable so that the results of a risk assessment are displayed in customizable dashboards, bringing to decision makers the information they need. Rational and sensible decision-making is indeed the ultimate goal of any risk assessment, and the goal is missed if the required information cannot be brought forward in the best possible way. Thanks to a rational ORE Enterprise Risk Management (ERM) plan it is possible to prioritize and sustainably mitigate hazards and their resulting risks.

Asset Management has recently (2014) been transformed by ISO from an isolated activity (BS PAS 55) to an activity guided by the international risk management system – ISO 31000:2009, confirming the validity of Riskope’s procedures. ERM (Enterprise Risk Management) requires a good understanding of the assets nature, location, hazard exposure, failure consequences. Enterprise Asset Management can supply at least part of these vital data to ERM, hence a bi-directional synergy.

Asset Management plans can be heavy and time consuming, a daunting process.

One problem with the preparation of an Asset Management plan is that it can be extremely heavy and time consuming. We often see smaller companies or communities abort their endeavour because of lack of funding, support, and/or stop after the inventory believing they have completed the tasks.

ORE can bring a solution to all these situations by understanding the different trade-offs. ORE relies on a Business Intelligence (BI) application performing the front-end and post-processing data management and analysis. As ORE is entirely customizable, the nature and extent of the BI’s activities depend on the clients decisions. It is perfectly possible for the client to ask the BI application be linked to all their extant files (loss control, third parties invoices for services, maintenance, utilities, accounting, etc.) so that the BI actually supports building the system’s anathomy by fetching the appropriate information.

With the BI application analytic capabilities ORE can model “the inside” of the system, not only depict a superficial image of it.

ORE allows sorting through results by different hazards type to understand, prioritize and quantify risk exposures and mitigations.

ORE allows sorting through results by different hazards type to understand, prioritize and quantify risk exposures and mitigations.

Riskope recently delivered a course at the Whistler Conference Center (B.C., Canada) focusing on the AM/RM synergy allowing utilities and municipalities to plan for infrastructure renewal (and long term life) in a way that proactively mitigates risks while protecting financial sustainability.

All Riskope activities, applications are of course compatible with the principles of ISO codes including ISO 22301:2012 Business Continuity Planning (BCP) and Disaster Resumption Planning (DRP), crisis management plans and communication plans delineated.

Riskope’s proprietary Optimum Risk Estimates (ORE) allows to enhance governance and leadership, transforming threats in competitive opportunities by having a clearer understanding of the risk landscape of a corporation . During a recent presentation in Nagoya (ISBM014) Riskope showed how ORE allows risk portfolios to be split into:

  • tolerable,
  • intolerable, but manageable,
  • intolerable and unmanageable classes.

Intolerable and unmanageable risks are those that require a strategic shift.

Manageable risks can be dealt with tactical measures if they are intolerable.

 

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Category: Consequences, Crisis management, Optimum Risk Estimates, Probabilities, Probability Impact Graphs, Risk analysis, Risk management

4 responses to “Business Intelligence, Asset Management and Risk Assessment Based Decision Making”

  1. Peter says:

    It would be interesting to see Oprimum Risk Estimation applied to Human Resource hiring and firing in a service industry where the resource is the staff.

    • Franco says:

      Absolutely and we are landing jobs in that direction.
      What you have to keep in mind is that the risk (consequence) metric is not necessarily “money”….it can be “personnel lost” etc.
      Thanks for your comment.

  2. Business Intelligence, Asset Management and Risk (Assessment) basato sul Decision Making. – Riskope | AICEX says:

    […] http://www.riskope.com/2014/05/28/business-intelligence-asset-management-and-risk-assessment-based-d… […]

  3. Boyce says:

    I read a lot of interesting posts here.

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