Communication inside Risk Assessment and Risk Management (COMRISK): Final report
Mats Gunnar AnderssonJosefine ElvingErik NordkvistMarcus UrdlLinda EngblomAnneluise MaderSara AltmeyerJ. KowalczykMonika Lahrssen‐WiederholtPirkko TuominenSuvi JoutsenJohanna SuomiAntti MikkeläNoora HinkkaKirsi‐Maarit SiekkinenH.J. van der Fels‐KlerxBart van den BorneBeshir M. Ali
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A key feature of risk analysis is that risk assessment and risk management should be functionally separated. However, the usefulness of a risk assessment may be limited if the output is not designed to help with risk management decisions. The COMRISK project investigated the communication between risk assessors and risk managers. The overall goal of the project was to identify current practices and challenges in communication between risk assessors and risk managers during the risk analysis process, and thus increase and improve the understanding and the quality of the communication between them. Specific actions to achieve this aim included reviewing of historical food safety cases, analysing risk assessment requests, identifying communication guiding documents, including legislation and agreements, conducting semi-structured interviews with risk assessors and risk managers, and identifying tools for facilitating the communication between risk assessors and risk managers. It was concluded that the usefulness of a risk assessment is strongly dependent on well-defined and mutually recognised risk questions and that scarce or poor communication between risk assessors and risk managers is one of the major reasons when an output from risk assessment fails to support risk management. The communication between risk assessors and risk managers preceding the onset of the risk assessment, when the risk assessment requests with its risk questions are defined, is especially identified as one of the critical points to ensure a risk assessment that is fit for purpose. However, difficulties in understanding were also reported for the communication between risk assessors and risk managers during and after the risk assessment. Lack of communication is seldom a result of formal constraints or agreements nor can it be explained by a wish of the risk assessors or risk managers. Instead, perceived constraints or traditions appear to be possible underlying factors leading to scarce or poor communication between risk assessors and risk managers. It is essential that both risk assessors and risk managers acknowledge the crucial importance of communication between them while at the same time respect their different roles in a risk analysis.According to respondents, the best solution to facilitate the framing of the risk assessment questions isan open dialogue between risk assessors and risk managers to agree on the goal of the assessment and to build trust. Further, the interviewresults indicate that a formal systematic process may facilitate communication during the risk analysis. Where there is uncertainty, e.g due to data gaps or issues related to the methodology and models, it should be acknowledged and described properly by risk assessors to risk managers. Training of risk assessors and risk managers may improve the possibility of a timely and fit-for-purpose output.Such a training should give a deeper insight in the risk management process, give a better understanding of the risk managers role, and especially raise the awareness of the importance of the communication between risk assessors and risk managers.To improve the risk analysis process, it is also important that the risk assessor gets feedback regarding how risk assessments have met the needs of the risk managers.The present study also found that aspects of risk communication studied in this project are not extensively discussed in the guidance documents for risk analysis. More research is needed to identify the barriers for a fit for purpose communication.Keywords:
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Risk Communication
Risk Perception
Risk management in information technology is the research problem in my essay. Research has shown that business risks related to information technology risk management can be considered and adopted within an organization or enterprise. The study has been demonstrated that some organizations have a well-laid enterprise risk management set out. In this case, therefore, risk management is seen as part of enterprise risk management. The study will also further expound on the risk management methodology, which constitutes a generic framework. The framework must, therefore, be considered as a risk management exercise. Based on a review of literature, the risk management procedure has taken into account risk assessment that ENISA has over time, reviewed the process to parameterize the entire risk management process. Risk identification states that there can be potential losses when threats, assets vulnerabilities, consequences, and related business processes are not considered. Therefore risk management in information technology must revolve around integrating risk management through the system development life cycle. The process cannot be termed as complete if risk management methods are not considered. In 2006, the threat sketch started a cybersecurity risk assessment that targeted small companies. In this study, the methodology uses real options, to prioritize and forecast a list of fixed high-level threats
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A key feature of risk analysis is that risk assessment and risk management should be functionally separated. However, the usefulness of a risk assessment may be limited if the output is not designed to help with risk management decisions. The COMRISK project investigated the communication between risk assessors and risk managers. The overall goal of the project was to identify current practices and challenges in communication between risk assessors and risk managers during the risk analysis process, and thus increase and improve the understanding and the quality of the communication between them. Specific actions to achieve this aim included reviewing of historical food safety cases, analysing risk assessment requests, identifying communication guiding documents, including legislation and agreements, conducting semi-structured interviews with risk assessors and risk managers, and identifying tools for facilitating the communication between risk assessors and risk managers. It was concluded that the usefulness of a risk assessment is strongly dependent on well-defined and mutually recognised risk questions and that scarce or poor communication between risk assessors and risk managers is one of the major reasons when an output from risk assessment fails to support risk management. The communication between risk assessors and risk managers preceding the onset of the risk assessment, when the risk assessment requests with its risk questions are defined, is especially identified as one of the critical points to ensure a risk assessment that is fit for purpose. However, difficulties in understanding were also reported for the communication between risk assessors and risk managers during and after the risk assessment. Lack of communication is seldom a result of formal constraints or agreements nor can it be explained by a wish of the risk assessors or risk managers. Instead, perceived constraints or traditions appear to be possible underlying factors leading to scarce or poor communication between risk assessors and risk managers. It is essential that both risk assessors and risk managers acknowledge the crucial importance of communication between them while at the same time respect their different roles in a risk analysis.According to respondents, the best solution to facilitate the framing of the risk assessment questions isan open dialogue between risk assessors and risk managers to agree on the goal of the assessment and to build trust. Further, the interviewresults indicate that a formal systematic process may facilitate communication during the risk analysis. Where there is uncertainty, e.g due to data gaps or issues related to the methodology and models, it should be acknowledged and described properly by risk assessors to risk managers. Training of risk assessors and risk managers may improve the possibility of a timely and fit-for-purpose output.Such a training should give a deeper insight in the risk management process, give a better understanding of the risk managers role, and especially raise the awareness of the importance of the communication between risk assessors and risk managers.To improve the risk analysis process, it is also important that the risk assessor gets feedback regarding how risk assessments have met the needs of the risk managers.The present study also found that aspects of risk communication studied in this project are not extensively discussed in the guidance documents for risk analysis. More research is needed to identify the barriers for a fit for purpose communication.
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List of figures List of tables Forward Introduction The aim of the book Part 1 -- Putting risk into perspective: Introduction Risk and reward go hand in hand Risk and contruction Risk -- another four letter word AGAP (All goes according to plan) and WHIF (What happens if) The people, the process and the risks Clients of the industry Have clientsa needs changed? Privately financed infrastructure projects What do clients want? Investment in property Consultatns and risk Contracting and risk Part II The background to risk and uncertainty: Introduction Defining risk and uncertainty The uncertainty of life and construction projects Dynamic and static risk A threat and a challenge Some fo ther basic rules for risk taking Risk a Place your waterline lowa The risky shift phenomenon -- what happens when groups make decisions The risk of not risking Risk styles Removing ignorance -- and risk Probability Converting uncertainty to risk Decision--making in the construction industry Intuition Bias and intuition Experts and experience Rules of thumb Making a model Reacting to information Looking at the past to forecast the future Types of information Building a decision model to solve a problem Part III The risk management system: Introduction Developing a risk management framework Risk identification Sources of risk Dependent and independent risk Risk classification Types of risk Impact of risk The risk hierarchy Risk and the general environment The market/industry risk The company risk Project risk and individual risk Consequence of risk Risk reponse Risk retention Risk reduction Risk transfer Risk avoidance Risk attitude Summarising risk management Risk management Part IV Some of the tools and techniques of risk management: Introduction Seeing the big picutre and tthe detail Decision--making techniques The risk premium Risk--adjusted discount rate Subjective probabilities Decision analysis Algorithms Means--end chain Decision matrix Strategy Decision trees Bayesian theory Stochastic decision tree analysis Multi--attribute value theory Specify the utility function Case study Summary Sensitivity analysis Spiider Diagram Monte Carlo simulation Portofolio theory The aplication of portfolio analysis in the construction industry Stochastic dominance Cumulative distributions of illustrative portfolios Conclusion Part V Utility and risk attitude: Introduction Risk exposure Utility theory Expected monetary value Payoff matrix The utility function General types of characteristics of utility functions The difference between EUV and EMV in practice The use of utility theory in construction Basic principle for the aplication of the theory Part VI Risks and the construction project -- money, time and technical risks: Introduction Money and delivery sequence Investment and development sequence Cost considerations Operational/revenue considerations The influence of taxation Value considerations Design and construction sequence Time delivery sequence Contractors and specialist contractors Technical delivery sequence A case study of the technical risks faced by the building surveyor Part VII Sensitivity analysis, breakeven analysis, and scenario analysis: Sensitivity analysis Breakeven analysis Scenario analysis Sensitivity analysis -- an application to life cycle costing Part VIII Risk analysis using Monte Carlo simulation: Probability analysis -- extending the sesitivity technique How it works Using Monte Carlo simulation in the cost planning of a building Estimating and price prediction an overview of current practice Cost planning and risk analysis Interdependence of items Risk analysis using probabilities Risk analysis using Monte Carlo simulation Considering some probability distributions Comon distriubtion types Uniform distribution Triangular distribution Normal distribution A step by step approach to Monte Carlo simulation Using Monte Carlo simulation on a live project The result Questions and Answers Part IX Constracts and risk: Disagreement and conflict The purpose of the contract The fundamental risks -- liability and responsibility Transferring and allocating the risk in the contracts The principles of control -- the theory The contractual links Risk avoidance by warrannties and collateral warranties The types of contract Contracts and risk tactics Part X A case study of an oil platform: A practical application of resourced schedule risk analysis Background The model Comparison with deterministic plan Data Weather Project variables Processing of data Confidence in the data Initial results Conclusion References and bibliography Index
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Risk management was applied to many organizations. There was a risk of multiple and complex manner in the construction industry, because it has a variety of elements. The application of risk management was therefore used in solving problems that suffer from the past to create an alternative to proper functioning under conditions. This article studied the main application to risk management in the construction industry by the sample texts document. The applying of risk management in the construction industry was 3 stages of risk management which were the risk analysis, risk assessment, risk control and follow-up, which was used to store information in the past and brainstorm by virtue of experience, expert tips and techniques to determine the risk analysis and risk evaluation of a mathematical methodology combined with the master planning of construction work to analyze, evaluate the risk under different condition and situations. Control, risk monitoring and risk assessment were a small amount so it should be a topic of research in future rely on notes and update the plan. The three important things for the applying of risk management in the construction industry were personnel, information and continuous learning.
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To avoid confusion and misunderstanding among the many forms of risk analysis now in use, each may be identified clearly and distinguished by purpose and objective. Risk is classified as being predominantly an engineering design risk analysis, a company representation as to risk, a comparative risk rating, a predetermined risk rating, a programme management risk analysis, an attempt at enterprise risk control, a regulatory risk analysis, or a liability risk analysis. The resulting risk assessment may be adjusted by relative risk, combinatorial risk, risk allocation, risk management, tolerability, and by altered risks. Risk shifting may be accomplished by legislative attenuation, judicial variability, stewardship programmes, disinformation campaigns, and loss prevention efforts. A risk perception assessment is a supplemental consideration along with an evaluation of cultural factors and the need for risk reassessments. The relevance of data sources for the product, the user, and from system verification testing may be determined, and an uncertainty analysis performed. It is essential that risk, risk analysis, and risk assessment are understood fully in today's multidisciplinary environment.
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Purpose:The objective of this paper is to offer an overview over risk management cycle by focusing on prioritization and treatment, in order to ensure an integrated approach to risk management and assessment, and establish the '˜top 8-12'(tm) risks report within the organization. The interface with Internal Audit is ensured by the implementation of the scoring method to prioritize risks collected from previous generated risk report. Methodology/approach:Using evidence from other research in the area and the professional expertise, this article outlines an integrated approach to risk assessment and risk management reporting processes, by separating the risk in two main categories: strategic and operational risks. The focus is on risk prioritization and scoring; the final output will comprise a mix of strategic and operational ('˜top 8-12'(tm)) risks, which should be used to establish the annual Internal Audit plan. Originality/value:By using an integrated approach to risk assessment and risk management will eliminate the need for a separate Internal Audit risk assessment over prevailing risks. It will reduce the level of risk assessment overlap by different functions (Tax, Treasury, Information System) over the same risk categories as a single methodology, is used and will align timings of risk assessment exercises. The risk prioritization by usage of risk and control scoring criteria highlights the combination between financial and non-financial impact criteria allowing risks that do not naturally lend themselves to a financial amount to be also assessed consistently.It is emphasized the usage of score method to prioritize the risks included in the annual audit plan in order to increase accuracy and timelines.
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The author discusses the need for risk assessment and risk management from the perspective of those who actively participate in the marine transportation industry. He states that while it is impossible to completely eliminate operating risk, and while the expectations of customers and the general public are more demanding than ever, by using risk assessments and by applying sound risk management principles as part of an overall company-wide quality management system, we place ourselves in a proactive position by identifying hazards and introducing preventive and/or mitigating steps. In his comments, the author cites definitions of risk assessment and risk management, shows by example how the company he represents integrates risk management and risk assessments in daily work activities, and closes by sharing what he considers to be important factors in conducting a risk assessment from an end user's point of view.
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Information System projects face many risks and challenges due to their complexity and technicality. Most public information system projects fail to achieve their objectives due to various factors including poor risk management. Despite continuous attention and emphasis on the importance of risk management during project implementation, risk management practices were relatively low and the risk management process has not been practiced in its entirety; it is commonly implemented only during its early phase. This paper analyzed selected risk management models that are commonly used by project managers. In general, five basic risk management processes are included and analyzed in these models, namely Risk Identification, Risk Analysis, Risk Classification, Risk Mitigation and Risk Control. This study also identified the level of basic risk management processes adopted by information system projects in a number of selected case studies.
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Purpose: The application of holistic risk management is fast becoming a standard measure of good governance in the business arena. What role can holistic risk management play in the management of risk in the financial services industry? The aim of this paper is to propose a holistic risk management framework for the management of risk. Design/Methodology/Approach: A comprehensive framework that covers the holistic view risk management is proposed/developed out of an extensive literature review. Findings: Given the deliberations of various frameworks, a holistic risk management is proposed. The proposed framework ensures that all components of risk management are taken into account when strategizing for risk management in general and holistic risk management in particular; thereby improving the management of risk in the banking industry. Implications: The article proposes a holistic approach to risk management which takes into account all the facets of risk management, e.g. analyzing, planning, strategy, communication, implementation, motivation, systems review and plan modification. This holistic approach, when implemented in the banking industry, can have a significant impact on the improved management of risk. Originality/Value: The new proposed holistic risk management framework offers a fresh perspective of strategizing for risk management in terms of risk analysis, risk planning, risk strategy, risk communication, risk implementation, risk motivation, risk review and risk plan modification.
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