generalized tolerability and risk based decision making examples 19 oct
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1 1 1Riskope International SA © 2009 www.riskope.com
ISBN: 978-0-9784462-3-9
By F.+C. Oboni
Examples of Tolerability and Risk Based Decision Making Applications in
Businesses
2 2 2Riskope International SA © 2009 www.riskope.com
ISBN: 978-0-9784462-3-9
Risk Based Decision MakingShowcase 1:
Selecting a Better Personnel Transportation System for a Remote
Production Centre
3 3 3Riskope International SA © 2009 www.riskope.com
ISBN: 978-0-9784462-3-9
After 15 years of flawless service, an employees' shuttle bus had an accident with 2 casualties in a country known for high traffic hazards.
Management decided to study alternatives to bus shuttling before facing internal and/or external scrutiny, media exposure etc.
4 4 4Riskope International SA © 2009 www.riskope.com
ISBN: 978-0-9784462-3-9
Selecting the best alternative in a clear and transparent way was considered of paramount importance.
The penalty: loss of confidence, major strike(s), societal and governmental pressure, etc., unsustainable mitigating costs...
5 5 5Riskope International SA © 2009 www.riskope.com
ISBN: 978-0-9784462-3-9
The following Alternatives were selected for comparison:
Alternative 1 Alternative 2 Alternative 3Bla bla Bla Bla Bla Bla
# 1 # 2 # 3Maintain Status Quo, i.e the bus
shuttling on existing roads
Build an Airport halfway to the location (only
possible location) and then bus shuttle
Increase the safety along the road, i.e. an enhanced Status Quo
6 6 6Riskope International SA © 2009 www.riskope.com
ISBN: 978-0-9784462-3-9
A Status Quo Risk Assessment revealed risks were unacceptable (from a societal standpoint).
These two lines can be interpreted as the “optimistic” and “pessimistic” acceptability criteria as defined by third parties
7 7 7Riskope International SA © 2009 www.riskope.com
ISBN: 978-0-9784462-3-9
Then, as 2 out of 3 options were only planned (not built yet) we had to estimate probabilities and consequences ranges from literature and experts' opinions.
There is no other way to help in this decision making process than going quantitative. Any qualitative approach would only blur the issues...
8 8 8Riskope International SA © 2009 www.riskope.com
ISBN: 978-0-9784462-3-9
* A mathematical model is used
Working with ranges, it was possible to generate maximum and minimum scenarios of each risk, for each alternative.
A stacked bar graph of Risks can then be build leading for each alternative to...
9 9 9Riskope International SA © 2009 www.riskope.com
ISBN: 978-0-9784462-3-9
* A mathematical model is used
...a very simple, and transparent preliminary risk based selection !
10 10 10Riskope International SA © 2009 www.riskope.com
ISBN: 978-0-9784462-3-9
Comparing the results with the societal acceptability curves came next...
Alternative B Alternative C
11 11 11Riskope International SA © 2009 www.riskope.com
ISBN: 978-0-9784462-3-9
NO Alternative actually “solves” the problem (mitigates to acceptability).
Furthermore the implementation costs and life time costs will be very different:
Costs and Risks have to be integrated...CDA/ESM will be the next step!
12 12 12Riskope International SA © 2009 www.riskope.com
ISBN: 978-0-9784462-3-9
Risk Based Decision MakingShowcase 2:
Prioritization of Risks related to Process System, its infrastructure and
the environment.
13 13 13Riskope International SA © 2009 www.riskope.com
ISBN: 978-0-9784462-3-9
This system of elements is quite complex. Domino effects are possible in certain case of failures, many of the infrastructure elements could be the target of malevolence (arson, sabotage etc.).
14 14 14Riskope International SA © 2009 www.riskope.com
ISBN: 978-0-9784462-3-9
Schematic of the System
In yellow all the different elements are identified
15 15 15Riskope International SA © 2009 www.riskope.com
ISBN: 978-0-9784462-3-9
Results of the Quantitative Maximum Risk Assessment for each element, with some scenarios (ranges).
16 16 16Riskope International SA © 2009 www.riskope.com
ISBN: 978-0-9784462-3-9
To deliver a clear prioritization, Risks were compared to Acceptability and Tolerability curves, as consequences could be financial and/or casualties.
17 17 17Riskope International SA © 2009 www.riskope.com
ISBN: 978-0-9784462-3-9
We defined the Client's Tolerability curve, checked it was compliant with the envelope we created over the years...and plotted the risks...
18 18 18Riskope International SA © 2009 www.riskope.com
ISBN: 978-0-9784462-3-9
Then we also compared the prior results with a societal acceptability criteria to make sure we would properly characterize all relevant scenarios.
19 19 19Riskope International SA © 2009 www.riskope.com
ISBN: 978-0-9784462-3-9
We computed the portion of Risks above Tolerability to have a clear Prioritization.
20 20 20Riskope International SA © 2009 www.riskope.com
ISBN: 978-0-9784462-3-9
The results:
Only 8 elements out of the 20 are above Tolerability and only 2 of them require immediate attention!
21 21 21Riskope International SA © 2009 www.riskope.com
ISBN: 978-0-9784462-3-9
What was accomplished ?By using a transparent and sound quantitative approach we were able to:
Scientifically select the most significant risks, Draw attention to the objective highest exposures (filtering emotional perceptions), andPrioritize them to allow reasonable mitigation in a very focused way.
We clearly enhanced the ability to prioritize risks for a rational and sustainable development.
22 22 22Riskope International SA © 2009 www.riskope.com
ISBN: 978-0-9784462-3-9
BUT, more importantly
Create the basis to avoid a slide into a crisis, by proactively controlling
the situation.NB: Long term comparison of Alternatives
requires the use of more sophisticated tools, such as CDA (Comparative Decision Analysis in replacement to classic NPV
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