555321S Riskien hallinta 555321S Risk Management

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555321S Riskien hallinta555321S Risk Management

• Luennot / lectures Pekka Kess
• Oulun yliopisto / University of Oulu
• Tuotantotalouden osasto /
• Department of Industrial Engineering and
  Management
• Syksy 2009 / Autumn 2009

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Course Description 3 cr.

• Goal The target of the course is that the
  students learn about risk management in a
  holistic way. Risk classification. Risk
  management methods.
• Contents
• Based on the developments of the Eureka RISKMAN
  project
• Defining risk
• Risks in business and risk classification
• Risk management methods
• Risk management tool
• Course lay-out
• 3 Meetings on Wednesdays 23.9, 30.9, 7.10 8
  10.00 a.m, SÄ118
• Home work
• kick-off on 30.9
• return the completed homework by 31.12.09
• Course acceptance
• Home work or
• Exam Bernstein Against the Gods The
  remarkable Story of Risk
• 21.10, or 25.11. or some day in 2010
• Questions and comments pekka.kess_at_oulu.fi

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Home work
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Notation of Risk

• A RISK is an event, on which there is no
  certitude that it will happen but certainty that
  if it does happen, it will cause significant
  damages
• A risk is characterized by the following
  parameters
• THE CAUSES, certain or not, that can lead the
  risk to occur. The risks is an effect of the
  causes
• THE LIKELIHOOD, which defines the probability of
  risk occurrence across time, depending on a
  particular context
• THE DETECTABILITY, defined by a set of clear
  signals that enable a manager to know if a risk
  has occurred or not
• THE IMPACT, characterized by a measurable value
  in term of time, effort or cost.
• THE CLASS to link a risk with a level of
  responsibility inside an organization

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The networked business world
World at Large
World of the organisations
World of the actions
World of the Technology
World of the Market Place
Risks come from everywhere
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Risk budgeting
Cost of reduction activities
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Categories of risk exposure

• The RISK EXPOSURE is a function of the impact
  value and of the probability of the occurrence
  i.e..
• risk exposureimpact value x probability of
  occurrence
• Unacceptable risk exposure of risk which can
  jeopardize the company strategy and/or present
  dangers for human lives and/or represents an
  outstanding financial exposure
• Critical risk exposure of risk which can
  penalize the company strategy, and/or represent a
  significant financial exposure
• Significant risk which can cause operation
  problems but is budgetable
• Minor risk which does not cause any significant
  problem and represents small financial amounts

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Risk classes

• Strategic risks They are tied to company
  objectives and its position on the market.
• Analysis of potential losses or benefices are
  shares of market segments, analysis of risk
  linked to the company image, are examples of
  managers everyday concerns.
• This class of risks is not related to a specific
  program or project, but is useful to evaluate the
  program or project impact on the future of the
  company.
• loss of market share
• accumulated losses
• financial expenses

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Risk classes

• Commercial risks This class of risks is tied to
  a program or a project, especially to the
  commercial aspects.
• Risks are here tied to selling activities, during
  bid and negotiating phases, then customer
  follow-up, during the contract execution. (From
  the project sellers point of view)
• wasting the sales effort
• lost customer
• sell without profit

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Risk classes

• Product risks This category of risks exist when
  a system is produced in series and sold to
  several customers
• define the wrong product
• define the wrong subjective characteristics of
  the product (and /or service)

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Risk classes

• Contractual risks These are risks tied to
  contractual terms negotiated before the
  signature
• paying penalties
• incur liabilities
• not being paid
• generate financial expenses
• increase amount of work without compensation
• assume cost inflation

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Risk classes

• Program risks These risks are tied to program
  organization (industrial partnership), design and
  integration
• suppliers over cost
• sub-contractor over costs
• additional effort to produce
• wasted effort
• planning overrun costs

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Risk classes

• Project risks This category includes all risks
  by the feasibility of the solution. These are
  identical to the program risks but concern a
  specific part of it/ an individual project
• suppliers over cost
• sub-contractor over costs
• additional effort to produce
• wasted effort
• planning overrun costs

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Risk classes

• Production risks They are all the risks tied to
  system production at medium or large scale
• inflation of cost supplies
• realization over cost
• production chains locked
• stock generation

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Risk classes

• Operation risks They are failures during
  operation which can cause significant financial
  costs and or damages
• system failure leads to an accident
• Maintenance risks They are over costs in
  corrective, evolutionary and preventive
  maintenance
• maintenance over cost

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TOP 10 Risk management case IT project management
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TOP 10 Risk management case IT project management
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TOP 10 Risk management case IT project management
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TOP 10 Risk management case IT project management
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Impact evaluation techniques
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Impact evaluation techniques
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Impact evaluation techniques
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Impact evaluation techniques
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Risk reduction
The risk reduction must be seen as an investment.
The objective is to identify additional actions,
then increase in reasonable proportions the
global project budget, in order to decrease the
probability and/or impact of identified
risks. The objective is to obtain finally a
significant risk budget reduction.
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Risk reduction axes
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Available techniques / risk reduction axes /
risk classes
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Available techniques / risk reduction axes /
risk classes
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Available techniques / risk reduction axes /
risk classes
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Available techniques / risk reduction axes /
risk classes
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Available techniques / risk reduction axes /
risk classes
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Ishikawa tool for Risk analysis
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Risk Management exercise
RISK CLASS
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