Risk analysis - Revision history

Tkokotas at 11:21, 20 December 2018

2018-12-20T11:21:47Z

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	''Developed by Johannes Michael Bührmann''		''Developed by Johannes Michael Bührmann''

	:''main article: [http://apppm.man.dtu.dk/index.php/Risk_management Risk Management]''		:main article: [http://apppm.man.dtu.dk/index.php/Risk_management Risk Management]
	==Summary==		==Summary==

Tkokotas at 11:21, 20 December 2018

2018-12-20T11:21:29Z

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	''Developed by Johannes Michael Bührmann''		''Developed by Johannes Michael Bührmann''



	:''main article: [http://apppm.man.dtu.dk/index.php/Risk_management Risk Management]''		:''main article: [http://apppm.man.dtu.dk/index.php/Risk_management Risk Management]''

Tkokotas at 11:21, 20 December 2018

2018-12-20T11:21:12Z

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			''Developed by Johannes Michael Bührmann''



	:''main article: [http://apppm.man.dtu.dk/index.php/Risk_management Risk Management]''		:''main article: [http://apppm.man.dtu.dk/index.php/Risk_management Risk Management]''
	==Summary==		==Summary==

TigR: /* Models used when analysing risk */

2014-12-01T17:29:00Z

Models used when analysing risk

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	The reason why risk is analysed with so many different methods to choose from, is because several different categories of risk exist, and yet there is a universal consensus that risk is best avoided, mitigated, minimised or negated.		The reason why risk is analysed with so many different methods to choose from, is because several different categories of risk exist, and yet there is a universal consensus that risk is best avoided, mitigated, minimised or negated.

	==Models used ~~when analysing~~ risk==		==Models used in order to analyse risk==
	All but one of the following models are described in Annex B of the ISO 31010 standard.		All but one of the following models are described in Annex B of the ISO 31010 standard.

TigR at 17:27, 1 December 2014

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	Because risk analysis works much like the processor in a computer it needs to receive a minimum of information as input before it can calculate an output which allows the user to gain a better overview and basis for making changes or taking decisions. ~~Risk~~ analysis is often generated for the sake of factual argumentation and credibility of decisions.		Because risk analysis works much like the processor in a computer it needs to receive a minimum of information as input before it can calculate an output which allows the user to gain a better overview and basis for making changes or taking decisions. A risk analysis is often generated for the sake of factual argumentation and credibility of decisions.
			Normally input are generated in the step before the analysis; "Risk identification" but some can also be derivatives generated during the analysis. Many of the models described later can be used to generate input during the identification stage.
			Output of the analysis step is usually used within the "Risk evaluation" in order to understand the risk in question.

	{\| class="wikitable"		{\| class="wikitable"

TigR at 20:30, 29 November 2014

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	Because risk analysis works much like the processor in a computer it needs to receive a minimum of information as input before it can calculate an output which allows the user to gain a better overview and basis for making changes or taking decisions. Risk analysis is often generated for the sake of factual argumentation and credibility of decisions.		Because risk analysis works much like the processor in a computer it needs to receive a minimum of information as input before it can calculate an output which allows the user to gain a better overview and basis for making changes or taking decisions. Risk analysis is often generated for the sake of factual argumentation and credibility of decisions.

	'''Input:'''		{\| class="wikitable"
	~~---~~-		\|+Risk Analysis
	;Purpose		\|-
			\|'''Input:'''
			\|'''Output:'''
			\|-
			\|;Purpose
	:The purpose is the reason for analysing the risk; it assists in determining the boundaries of the analysis.		:The purpose is the reason for analysing the risk; it assists in determining the boundaries of the analysis.
			\|rowspan="4"\|;Assessment of the risk with the following aspects
	;Type of risk		:Description of methods used and known control features impact on the risk
			:Combined Likelihood / probability depending on the description of original risk
			:Consequences of different scenarios
			\|-
			\|;Type of risk
	:Choice of models depends on the type of risk in question.		:Choice of models depends on the type of risk in question.
			\|-
	;Information available		\|;Information available
	:Determines whether it is possible to conduct the analysis right away or information has to be gathered.		:Determines whether it is possible to conduct the analysis right away or information has to be gathered.
			\|-
	;Existing control features		\|;Existing control features
	:The features that are already in place to influence the risk and outcome of the analysis.		:The features that are already in place to influence the risk and outcome of the analysis.
			\|-
	;Effectivity of existing control features		\|;Effectivity of existing control features
	:How effective the control features are. This information can also reveal if there is room for improvements.		:How effective the control features are. This information can also reveal if there is room for improvements.
			\|rowspan="4"\|;Description of the confidence in:
	;Consequences		:The assessment of the risk (the result of the analysis)
			:The sensitivity of the result to preconditions and assumptions
			:Information Uncertainty
			:Information Availability
			:Information Quality
			:Information Quantity
			:Ongoing relevance of information (how relevant will the analysis be in the future)
			\|-
			\|;Consequences
	:The consequences can be both positive and negative, and reflect the impact of events defined in the analysis.		:The consequences can be both positive and negative, and reflect the impact of events defined in the analysis.
			\|-
	;Likelihood / Probabilities		\|;Likelihood / Probabilities
	:Estimates, guesstimates, statistics and assumptions on the probability of an event happening.		:Estimates, guesstimates, statistics and assumptions on the probability of an event happening.
			\|-
	;Risk criteria		\|;Risk criteria
	:Terms against which the risk significance is evaluated, often based on context (internal/external) and objectives of the organisation.		:Terms against which the risk significance is evaluated, often based on context (internal/external) and objectives of the organisation.
			\|-
	;Causes of risk		\|;Causes of risk
	:The reasons why an event takes place.		:The reasons why an event takes place.
			\|rowspan="4"\|;Limitations
			:Demarcation description.
			\|-
			\|;Sources of risk
			:The objects which affects the risk.
			\|-
			\|;Factors influencing any of the above
			:Weights which scale the severity of the quantities are part of this input, as well as uncertainties and sensitivities.
			\|-
			\|;Interrelations / Interdependence
			:The network of relational aspects between different risks
			\|}

	~~;Sources of risk~~		----
	~~:The objects which affect the risk.~~

	~~;Factors influencing any of the above~~
	~~:Weights which scale the severity of the quantities are part of this input, as well as uncertainties and sensitivities.~~

	~~;Interrelations / Interdependence~~
	~~:The network of relational aspects between different risks~~


	~~'''Output:'''~~
	~~----~~
	~~;Assessment of the risk with the following aspects~~
	~~:Description of methods used and known control features impact on the risk~~
	~~:Combined Likelihood / probability depending on the description of original risk~~
	~~:Consequences of different scenarios~~

	~~;Description of the confidence in:~~
	~~:The assessment of the risk (the result of the analysis)~~
	~~:The sensitivity of the result to preconditions and assumptions~~
	~~:Information Uncertainty~~
	~~:Information Availability~~
	~~:Information Quality~~
	~~:Information Quantity~~
	~~:Ongoing relevance of information (how relevant will the analysis be in the future)~~

	~~;Limitations~~
	~~:Demarcation description~~

	==Benefits of analysing risk==		==Benefits of analysing risk==

TigR at 22:43, 27 November 2014

2014-11-27T22:43:49Z

TigR at 09:54, 27 November 2014

2014-11-27T09:54:10Z

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	==Summary==		==Summary==

	Since risk analysis is a subpart of risk management, several correlations ~~will~~ be present between the two.		This article will describe the element of risk analysis within risk management, what it is used for and list several elements which can be used in the process of managing projects, portfolios and programs..
	~~This article will attempt to describe the analytical part and different methods used to analyse the risk when managing projects, portfolios and programs~~.		Since risk analysis is a subpart of risk management, several correlations might be present between the two.

	Several methods will be mentioned and explained briefly, but (in order to allow the full use of the wiki) not be described in detail.		Several methods will be mentioned and explained briefly, but (in order to allow the full use of the wiki) not be described in detail.

	~~Risk~~ analysis essentially ~~chooses~~ the most appropriate method(s) for calculating the given information and delivers a collective overview of the situation, as an artisan chooses the right tool for the job and produces the individual parts for the product. Using “known knowns” and “known unknowns” '' (from [http://apppm.man.dtu.dk/index.php/The_Cynefin_Framework the Cynefin framework]) '' along with estimates made by either extrapolation based on prior knowledge or by experts, the analysis generates a better understanding enabling the user to conduct a valid risk evaluation.		The user of risk analysis essentially choose the most appropriate method(s) for calculating the given information and delivers a collective overview of the situation, as an artisan chooses the right tool for the job and produces the individual parts for the product. Using “known knowns” and “known unknowns” '' (from [http://apppm.man.dtu.dk/index.php/The_Cynefin_Framework the Cynefin framework]) '' along with estimates made by either extrapolation based on prior knowledge or by experts, the analysis generates a better understanding enabling the user to conduct a valid risk evaluation.

	==Definition==		==Definition==
	[[File:Risk Analysis from ISO31000.JPG\|500px\|thumb\|right\|Risk Analysis]]		[[File:Risk Analysis from ISO31000.JPG\|500px\|thumb\|right\|Risk Analysis]]
	~~Before defining risk~~ analysis the ~~understanding~~ of ~~risk as a term needs to be established~~. Risk ~~is mostly defined as a probability of losing something~~ of a ~~specific value, mathematically speaking; the probability of the event occurring multiplied by the potential value-loss = the risk~~.		Risk analysis lies at the heart of [http://apppm.man.dtu.dk/index.php/Risk_management Risk Management] and functions very much like the Central Processing Unit (CPU) of a computer.

	~~In order to compute this risk the analysis must receive information on the~~ probability ~~and the~~ value ~~of the potential loss~~. ~~Looking at~~ the ~~definition~~ of ~~risk analysis,~~ the ~~ISO Guide 73~~-2009 states that it is the ''“Process to comprehend the nature of risk and to determine the level of risk”'' and the ISO 31000 standard describes it as the process which ''“provides an input to risk evaluation and to decisions on whether risks need to be treated, and on the ~~most appropriate~~ risk ~~treatment strategies and methods” ''~~.		The term "Risk" is most often defined as a probability of losing something of a specific value.
			Mathematically speaking; the probability of an event occurring multiplied by the potential value-loss = the risk.

	Both are correct since the process mentioned is the computational part of ~~risk management~~ where different aspects, variables and factors are used to estimate the risk involved with a specific feature, action, decision, condition etc. The outcome of this computation is a quantified number or percentage which can then be used as an evaluation criterion, determining either which option to select or if it is safe to proceed down the investigated path.		In order to compute this risk the person(s) doing the analysis must as a minimum receive information on the probability of an event occurring and the value of the potential loss.
			The definition of risk analysis, as defined by the International Organisation for Standardization is as follows:

			In their [http://www.iso.org/iso/catalogue_detail?csnumber=44651 ISO Guide 73-2009], it is stated as the ''“Process to comprehend the nature of risk and to determine the level of risk”''
			In the [http://www.iso.org/iso/catalogue_detail?csnumber=43170 ISO 31000] standard it is described as the process which ''“provides an input to risk evaluation and to decisions on whether risks need to be treated, and on the most appropriate risk treatment strategies and methods” ''.

			Both are correct since the process mentioned is the computational part of [http://apppm.man.dtu.dk/index.php/Risk_management Risk Management] where different aspects, variables and factors are used to estimate the risk involved with a specific feature, action, decision, condition etc. The outcome of this computation is a quantified number or percentage which can then be used as an evaluation criterion, determining either which option to select or if it is safe to proceed down the investigated path.

	==Main features of risk analysis==		==Main features of risk analysis==
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	==Reference==		==Reference==
	ISO Guide 73-2009 – Risk Management Vocabulary		[http://www.iso.org/iso/catalogue_detail?csnumber=44651 ISO Guide 73-2009 – Risk Management Vocabulary (2009)]

	ISO 31000 - Risk management - Principles and guidelines		[http://www.iso.org/iso/catalogue_detail?csnumber=43170 ISO 31000 - Risk management - Principles and guidelines (2009)]

	ISO 31010 - Risk management		[http://www.iso.org/iso/catalogue_detail?csnumber=51073 ISO 31010 - Risk management (2009)]

	International Journal of Project Management 32 (2014) - Vahid Khodakarami , Abdollah Abdi - Project cost risk analysis: A Bayesian networks approach for modelling dependencies between cost items		International Journal of Project Management 32 (2014) - Vahid Khodakarami , Abdollah Abdi - Project cost risk analysis: A Bayesian networks approach for modelling dependencies between cost items

TigR at 09:15, 27 November 2014

2014-11-27T09:15:47Z

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	:''main article: [http://apppm.man.dtu.dk/index.php/Risk_management Risk Management]''		:''main article: [http://apppm.man.dtu.dk/index.php/Risk_management Risk Management]''
	==~~Abstract~~==		==Summary==

	Since risk analysis is a subpart of risk management, several correlations will be present between the two.		Since risk analysis is a subpart of risk management, several correlations will be present between the two.
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	==Definition==		==Definition==
			[[File:Risk Analysis from ISO31000.JPG\|500px\|thumb\|right\|Risk Analysis]]
	Before defining risk analysis the understanding of risk as a term needs to be established. Risk is mostly defined as a probability of losing something of a specific value, mathematically speaking; the probability of the event occurring multiplied by the potential value-loss = the risk.		Before defining risk analysis the understanding of risk as a term needs to be established. Risk is mostly defined as a probability of losing something of a specific value, mathematically speaking; the probability of the event occurring multiplied by the potential value-loss = the risk.

TigR at 20:42, 26 November 2014

2014-11-26T20:42:10Z

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			:''main article: [http://apppm.man.dtu.dk/index.php/Risk_management Risk Management]''
	==Abstract==		==Abstract==
	~~:''main article: [http://apppm.man.dtu.dk/index.php/Risk_management Risk Management]''~~
	Since risk analysis is a subpart of risk management, several correlations will be present between the two.		Since risk analysis is a subpart of risk management, several correlations will be present between the two.
	This article will attempt to describe the analytical part and different methods used to analyse the risk when managing projects, portfolios and programs.		This article will attempt to describe the analytical part and different methods used to analyse the risk when managing projects, portfolios and programs.

← Older revision		Revision as of 22:43, 27 November 2014
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	==Summary==		==Summary==

	This article will describe the element of risk analysis within risk management, what it is used for and list several elements which can be used in the process of managing projects, portfolios and programs..		This article will describe the element of risk analysis within risk management, what it is used for and list several elements which can be used in the process of managing risk in projects, portfolios and programs..
	Since risk analysis is a subpart of ~~risk management~~, several correlations might be present between the two.		Since risk analysis is a subpart of [http://apppm.man.dtu.dk/index.php/Risk_management Risk Management], several correlations might be present between the two.

	Several methods will be mentioned and explained briefly, but (in order to allow the full use of the wiki) not be described in detail.		Several methods used for Risk Analysis will be mentioned and explained briefly, but (in order to allow the full use of the wiki) not be described in detail. Some of them might not seem directly applicable but can all be used during the possible iterations within the analysis.

	The user of risk analysis essentially choose the most appropriate method(s) for calculating the given information and delivers a collective overview of the situation, as an artisan chooses the right tool for the job and produces the individual parts for the product. Using “known knowns” and “known unknowns” '' (from [http://apppm.man.dtu.dk/index.php/The_Cynefin_Framework the Cynefin framework]) '' along with estimates made by either extrapolation based on prior knowledge or by experts, the analysis generates a better understanding enabling the user to conduct a valid risk evaluation.		The user of risk analysis essentially choose the most appropriate method(s) for calculating the given information and delivers a collective overview of the situation, as an artisan chooses the right tool for the job and produces the individual parts for the product. Using “known knowns” and “known unknowns” '' (from [http://apppm.man.dtu.dk/index.php/The_Cynefin_Framework the Cynefin framework]) '' along with estimates made by either extrapolation based on prior knowledge or by experts, the analysis generates a better understanding enabling the user to conduct a valid risk evaluation.
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	==Main features of risk analysis==		==Main features of risk analysis==
	There are three different analysis method groupings within risk analysis; Qualitative, Semi-~~quantitative~~ and ~~quantitative~~.		There are three different analysis method groupings within risk analysis; Qualitative, Semi-Quantitative and Quantitative.

	;Qualitative:		;Qualitative:
	:Qualitative analysis methods are based on opinions and estimates. They compute the risk scenario based on few numbers and many interpretations. Outcome of these methods are usually given in levels of significance like “high”, “medium” and “low” or other word scales which are not specifically determining any actual number.		:Qualitative analysis methods are based on opinions and estimates. They compute the risk scenario based on few numbers and many interpretations. Outcome of these methods are usually given in levels of significance like “high”, “medium” and “low” or other "word scales" which are not specifically determining any actual number. An example of a qualitative result is the risk of terror when travelling abroad, made by the ministry of foreign affairs.

	;Semi-quantitative:		;Semi-quantitative:
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	;Likelihood / Probabilities		;Likelihood / Probabilities
	:Estimates, ~~guestimates~~, statistics and assumptions on the probability of an event happening.		:Estimates, guesstimates, statistics and assumptions on the probability of an event happening.

	;Risk criteria		;Risk criteria
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	==Benefits of analysing risk==		==Benefits of analysing risk==
	Analysing risk has become an integrated part of working with forecasts as well as decisions or projects, programs and portfolios, simply because it generates the big picture needed to make an informed decision.		Analysing risk has become an integrated part of working with forecasts as well as decisions in projects, programs and portfolios, simply because it generates the big picture needed to make an informed decision.
	The drivers of analysing risk are the focus on lowering costs and expenses, avoiding loss of anything valuable and reducing variability in outcomes.		The drivers of analysing risk are the focus on lowering costs and expenses, avoiding loss of anything valuable and reducing variability in outcomes.
	The reason why risk is analysed with so many different methods to choose from, is because several different categories of risk exist, and yet there is a universal consensus that risk is best avoided, mitigated, minimised or negated.		The reason why risk is analysed with so many different methods to choose from, is because several different categories of risk exist, and yet there is a universal consensus that risk is best avoided, mitigated, minimised or negated.
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	*'''[http://en.wikipedia.org/wiki/Brainstorming Brainstorming]:'''		*'''[http://en.wikipedia.org/wiki/Brainstorming Brainstorming]:'''
	::Brainstorming is a very intuitive method which uses associations and connections made by possibly several people around a central subject to uncover problematic and opportunistic aspects affecting the subject. This qualitative information is then used to gather as much quantitative information as possible in order to complete the further analysis.		::Brainstorming is a very intuitive method which uses associations and connections made by possibly several people around a central subject to uncover problematic and opportunistic aspects affecting the subject. This qualitative information is then used to gather as much quantitative information as possible in order to complete the further analysis. It can e.g. be used to imagine future risks or possible control features to known risks.

	*'''[http://en.wikipedia.org/wiki/Structured_interview Structured] or [http://en.wikipedia.org/wiki/Semi-structured_interview semi-structured] interviews:'''		*'''[http://en.wikipedia.org/wiki/Structured_interview Structured] or [http://en.wikipedia.org/wiki/Semi-structured_interview semi-structured] interviews:'''
	::The structured or semi-structured interview can be used for gathering information from numerous sources. These interviews do not have to be done face to face since questionnaires are also considered within this model.		::The structured or semi-structured interview can be used for gathering information from numerous sources. These interviews do not have to be done face to face since questionnaires are also considered within this model. Applicable in the phases before and after Risk Analysis.

	*'''[http://en.wikipedia.org/wiki/Delphi_method Delphi technique]:'''		*'''[http://en.wikipedia.org/wiki/Delphi_method Delphi technique]:'''
	::The Delphi technique is essentially a brainstorming process where the participants are kept anonymous but are able to see the collected work of all participating in the process. It is used to reach some kind of consensus around the subject in question.		::The Delphi technique is essentially a brainstorming process where the participants are kept anonymous but are able to see the collected work of all participating in the process. It is used to reach some kind of consensus around the subject in question. Applicable in the phases before and after Risk Analysis.

	*'''Check-lists:'''		*'''Check-lists:'''