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Riskope’s Methodology

Riskope’s Methodology

A systematic approach to risk considerations in decision-making and management support is paramount

As a matter of fact, that’s true especially when various layers of uncertainties surround alternatives, projects, operations, because decision-makers need to understand the:

  • assumptions made. Thus we can discuss and audit the evaluations.
  • uncertainties surrounding the decision,
  • probabilistic future behavior (evolution)
  • benefits of updating risk information during the life cycle of the system, finally,
  • benefits of a scalable (from “high level” to detailed operational, no information wasted) risk analysis system.

As a result, the approach needs to cover:

  • physical losses (human and assets)
  • business interruption (BI)
  • environmental damages and, finally,
  • reputational damages and crisis potential.

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Leading companies are turning to quantitative convergent, scalable enterprise risk management (ERM) methods in order to understand the consequences of potential business risks. That also allows them to make informed decisions about how to prevent, manage, and mitigate impacts.
As an independent firm, Riskope delivers an impartial, third party evaluation of risks through  a quantitative convergent, scalable enterprise risk management (ERM) method called ORE (Optimum Risk Estimates ©Oboni Riskope Associates Inc.). Our knowledgeable, senior professionals are fully engaged in all aspects of each project to provide clients with tailored attention, not pre-packaged studies.

Click here to download our White Paper entitled What You Need to Know About Risk Management Methods.

Risk Management Services Stepped approach

In order to carry out their studies Riskope develop, within the ORE framework, a Step by Step Quantitative Risk Assessment Framework (QRAF) approach encompassing the following Six Steps.
The results are delivered through a series of graphic representation (dashboards) and other communication means agreed upon with the client. This approach delivers the image of the full risk landscape of the system under consideration (corporation, project, operation, agency, national system, etc.)

Riskope's Methodology

Fig. 1 Scheme of the ORE (Optimum Risk Estimates) continuous process. Scalable and drillable from cradle to grave for any project, alternative, operation.

Risk is quantified by gathering reliable data and information from public and private sources. This information is then modeled and analyzed, incorporating extensive experience-based knowledge, to determine probable outcomes. We have developed our proprietary analytical models for over twenty years. As a result we can customize them for each client.

Step 1:

Riskope’s study will start by studying all available documentation on each alternative. Obviously more provided pertinent extant material will translate in more accurate approaches for each alternative.

Step 2:

QRAF defines the boundary of the considered systems, splits them in elements amenable to analysis: the finer the split-ting, the more detailed the analysis. The final number of items generally ranges from less than 50 to several hundreds.

Hazard Identification is performed using Threat from/Threat to approaches leading to a unsorted General Hazard Scenario Register.

Step 3:

For each record of the Register, the QRAF foresees the generation of one or more probability-consequences couple. QRAF evaluates probabilities  using various available methodologies. QRAF defines Consequences for each component, including uncertainties. The QRAF foresees the formulation of a blended consequence metric. The Client has to approve this in advance of any specific Risk Assessment.

QRAF defines “Total risk” for each record. Deliverable of this Step will be a General Risk Scenario Register, sorted by decreasing “total risk” or other selected filters.

Step 4:

The QRAF foresees an optional treatment of the prior results based on proprietary methodologies. The procedure starts with the definition of the Client’s Tolerability Threshold for its operations. Thus we can rank risks on their intolerable part. As a result we  highlight critical areas of the operation and we can guide recommendations on possible mitigations. Indeed, this ranking leads to more effective risk based decisions.

Step 5:

As an option the QRAF foresees the probabilistic alternatives’ life-cycle evaluation “from cradle to grave” with CDA/ESM (Comparative Decision Analysis/Economic Safety Margin ©Oboni Riskope Associates Inc.). In this Step we integrate risk results from the prior steps. Thus we avoid the pitfalls of other project evaluation methods such as NPV.

Step 6:

The QRFA also comes complete with a set of communication documents. They allow to properly inform all the stakeholders on the outcome of the Risk Assessment. Figure 2 displays a typical ORE dashboard where it is possible to understand:

  • what are the most critical sources of threats to the company,
  • which products and which hazardous sectors generate the largest potential losses. We split losses by type: physical, BI, environmental, etc.). We look, for example, where the highest logistic risks are and even, finally, to
  • the distribution of media vulnerabilities within several divisions (projects, alternatives, operations, etc.) of a same company.

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While all of Riskope’s work is tailored to meet the unique requirements of each assignment, chances are we have done work that is similar to your needs. Thus we can provide you with an example of our work while respecting confidentiality. Contact us – we are here to help.

Our case studies provide a flavor of our approach. Indeed the case studies showcase the support we provide for informed decisions that preserve enterprise value. The case studies are organized by Industry Sector and Risk Hazard.

 

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