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Verification and Validation

Verification and Validation. Risk Management Adrian Marshall. Overview. Introduction AS/NZS 4360 – The Australian Risk Management Standard Risk Management Definitions Risk Management Process Overview RM 1: Communicating & Consulting RM 2: Establishing the context RM 3: Identifying risks

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Verification and Validation

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  1. Verification and Validation Risk Management Adrian Marshall Adrian Marshall

  2. Overview • Introduction • AS/NZS 4360 – The Australian Risk Management Standard • Risk Management Definitions • Risk Management Process Overview • RM 1: Communicating & Consulting • RM 2: Establishing the context • RM 3: Identifying risks • RM 4: Analysing risks • RM 5: Evaluating risks • RM 6: Treating risks • RM 7: Monitoring & reviewing risks • Risk Management Plans Adrian Marshall

  3. Risk Management Basics • Managing risks involves both threats and opportunities • Managing risks requires rigorous thinking • Managing risks requires forward thinking • Managing risks requires balanced thinking • Managing risks requires accountability in decision making • Managing risks requires communication • THE ALTERNATIVE TO RISK MANAGEMENT • IS RISKY MANAGEMENT Adrian Marshall

  4. AS/NZS 4360:2004 • The Australian Risk Management Standard • Represents leading practice • Provides a generic guide for managing risk • Should be applied at all stages in the life of an activity, function, project, process or asset • Is intended to be applied to the management of both potential gains and losses • Is supported by a handbook which includes commentary on the Standard’s contents and provides examples of tools, techniques and related work products (HB 436:2004) Adrian Marshall

  5. Risk Management Definitions • Consequence • Outcome or impact of an event • Hazard • A source of potential harm • Likelihood • A probability or relative frequency of occurrence of an event • Loss • Any negative consequence or adverse effect • Risk • The chance of something happening that will have an impact on objectives (Risk may have a positive or negative impact)a measure of risk = consequences x likelihood Adrian Marshall

  6. Risk Management Process Adrian Marshall

  7. Communicating & Consulting • Internal & external communications • Stakeholder consultation • Expert contributions • Sharing ownership Adrian Marshall

  8. Establishing the Context • The external context • The internal context • The risk management context • Develop risk criteria • Define the necessary risk management structure Adrian Marshall

  9. Identifying Risks • What can happen, where and when? • Why and how can it happen? • Tools and techniques Adrian Marshall

  10. Analysing risks • Risk sources • Positive & negative consequences • Cause and effect analysis • Existing controls • Sensitivity analysis • Modelling & simulation • Qualitative analysis • Semi - quantitative analysis • Quantitative analysis • Financial impact analysis Adrian Marshall

  11. Analysing Risks - 1 • Qualitative Representation Adrian Marshall

  12. Analysing Risks - 2 • Semi Quantitative Representation Adrian Marshall

  13. Evaluating Risks - 1 • Decision making based on analysis outputs • Comparison of risk levels for events • Ranking and prioritisation • Tolerable risk Adrian Marshall

  14. Evaluating Risks - 2 • Tolerable risk – as low as reasonably practicable Adrian Marshall

  15. Evaluating Risks (3) • Tolerable risks • Tolerance may vary from project to project Adrian Marshall

  16. Treating Risks • Identifying treatment options • Assessing treatment options • Preparing and implementing treatment plans • Mitigation and Contingency Adrian Marshall

  17. Monitoring & Reviewing Risks • Monitoring environmental and causal factor changes • Monitoring treatment effectiveness • Monitoring risk management process effectiveness Adrian Marshall

  18. Risk Management Plans • Define how risk management is to be conducted • Communicate the risk management policy • Establish accountability and authority • Customise the generic risk management process • Identify risk management resources, techniques and tools • State how risk management activities will be measured, recorded, evaluated and reported Adrian Marshall

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