1. Session 17 Dr. Dan C. Surber, ESEP
ME Fall Introduction to Systems Engineering
Session 17
Dr. Dan C. Surber, ESEP
© Copyright 2013

2. Lecture Topics Risk Management Concepts Techniques Tools & Utility
Carry over to later phases

3. Risk Management Concepts
Risk: “uncertainty that can cause us to fail.”
2 components
LIKELIHOOD (Probability factor, Pf)
SEVERITY (Consequence factor, Cf)
Both are expressed in PER CENT, so they are LESS THAN ONE
their PRODUCT is the Risk Factor
Mitigation: “set of steps to reduce Pf and Cf”
Contingency: “what to do if MITIGATION fails”
BOTH take resources and MIT needs to be on the SCHEDULE with start and stop dates

4. Risk Management Concepts
Probability factor (Pf)
How likely is it that the cause of uncertainty will be actually occur.
Consequence factor (Cf)
What is the severity of the outcome when it happens.

5. Opportunity Concepts Opportunity: benefit that has feasibility.
2 components
LIKELIHOOD (Feasibility)
CONSEQUENCE (Benefit)
Both are expressed as numbers greater than 1, and their PRODUCT is the Opportunity Factor
PURSUIT: a plan to take advantage of the OPP and gain the benefit, but it costs some resources to PURSUE

6. Opportunity Concepts Benefit (Bf) Feasibility factor (Ff)
What is the benefit accrued to the program if the opportunity is realized.
What will it COST to pursue and capture this.
Feasibility factor (Ff)
How likely is it that this opportunity can be achieved.

7. Risk Handling Methods Accept it Transfer it
Manage it through mitigation
Monitor it
Don’t bring it into the active database but save for possible future use

8. RM Techniques & Tools Spreadsheet in MS EXCEL Database in MS ACCESS
ARM, by Strategic Thought (SQL or Oracle)
Prophet, a tool made by Hughes/Raytheon
Risk Radar
Other sources:

9. Utility of RM Tools Spreadsheet or Database
Concept Phase
Early identification (“If this happens, then the consequence to the project/design is x, y & z.”)
Best opportunity to “Design it out”
Later Product Development Phases
Technology on the CRITICAL PATH, but not the point of the project
Management reserve must be used carefully
Risks change with product life cycle phase
Develop a RISK MANAGEMENT PLAN at the start of the project
Stakeholders & risk review board
Document how you will rate & rank Risks & Opportunities

10. Summary
Everyone on the team is a key to finding risks and opportunities
Identification is worthless without prioritization & action
Ignoring OPPORTUNITIES is leaving money on the table & business at the mall
Plan to mitigate, and have a CONTINGENCY in case that fails

11. Tools & Utility http://www.sei.cmu.edu/risk/
MS Access such as RISK RADARTM
(ISO/IEC Guide 73)
Active Risk ManagerTM

12. System Safety vs Project Risk See SLIDES 17a.ppt
HAZARDS
System Safety vs Project Risk
See SLIDES 17a.ppt