Development and Application of an Enterprise Risk Assessment Tool for Transportation Agencies Mark Abkowitz & Janey Camp Vanderbilt University Logistics, Trade and Transportation Symposium 2014 Gulfport, Mississippi

Enterprise Risk Management (ERM) A systematic approach enabling an organization to consider all factors that threaten its ability to meet business objectives and implement appropriate risk management controls according to the organization’s risk appetite.

Why ERM? Enhances the safety and security of employees, business partners and the community at large Improves the quality of decisions and reduces surprises by being better risk-informed Controls unnecessary expenditures by treating risks before they become more costly problems Creates opportunities for competitive advantage Helps grow a proactive organizational culture that recognizes and rewards problem avoidance Increases stakeholder confidence by demonstrating good stewardship

Managing Risk – Fundamental Questions What can go wrong? How likely is it? What are the consequences? What can be done to better manage risk within our available resources?

ERM Decision-Support Tools Process has not engaged identification of every hazard that could manifest itself as a “reasonably foreseeable risk”. A consistent framework for categorizing risks to enable a structured ERM approach has been lacking User-friendliness is often compromised Opportunity exists to develop an improved capability to help organizations: – Understand their entire risk portfolio – Identify where their risk “hot spots” are located – Create a basis from which to formulate and evaluate the merits of targeted risk reduction strategies

Introducing RiskCatcher A web-based application, structured in a menu- driven format, with modules that mirror the previously-described process steps. Operates similar to TurboTax®, where users : – Select relevant risk categories – Describe event scenarios within each category – Assign corresponding scenario likelihoods and consequences Can be used to perform both quantitative and qualitative risk analyses. Results shown in graphic and tabular form, and may be exported to other software applications. Includes a library of scenarios for user access, if desired.

Scenario Risk Category Risk Qualitative Risk Assessment Results

Quantitative Risk Assessment Results Scenario Risk Category Risk

Concluding Remarks RiskCatcher can help the transportation industry and other sectors implement ERM as a core business practice. Tool can improve an organization’s ability to identify priority risks and select desirable risk mitigation strategies. Bottom line can be an enterprise with less vulnerability and greater resilience.

Mark Abkowitz Janey Camp Thank You!