1. COMP8130 and COMP4130 Adrian Marshall Verification and Validation Risk Management Adrian Marshall

2. COMP8130 and COMP4130 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 RM 4: Analysing risks RM 5: Evaluating risks RM 6: Treating risks RM 7: Monitoring & reviewing risks Risk Management Plans

3. COMP8130 and COMP4130 Adrian Marshall 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

4. COMP8130 and COMP4130 Adrian Marshall 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)

5. COMP8130 and COMP4130 Adrian Marshall 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

6. COMP8130 and COMP4130 Adrian Marshall Risk Management Process

7. COMP8130 and COMP4130 Adrian Marshall Communicating & Consulting Internal & external communications Stakeholder consultation Expert contributions Sharing ownership

8. COMP8130 and COMP4130 Adrian Marshall Establishing the Context The external context The internal context The risk management context Develop risk criteria Define the necessary risk management structure

9. COMP8130 and COMP4130 Adrian Marshall Identifying Risks What can happen, where and when? Why and how can it happen? Tools and techniques

10. COMP8130 and COMP4130 Adrian Marshall 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

11. COMP8130 and COMP4130 Adrian Marshall Analysing Risks - 1 Qualitative Representation

12. COMP8130 and COMP4130 Adrian Marshall Analysing Risks - 2 Semi Quantitative Representation

13. COMP8130 and COMP4130 Adrian Marshall Evaluating Risks - 1 Decision making based on analysis outputs Comparison of risk levels for events Ranking and prioritisation Tolerable risk

14. COMP8130 and COMP4130 Adrian Marshall Evaluating Risks - 2 Tolerable risk – as low as reasonably practicable

15. COMP8130 and COMP4130 Adrian Marshall Evaluating Risks (3) Tolerable risks Tolerance may vary from project to project

16. COMP8130 and COMP4130 Adrian Marshall Treating Risks Identifying treatment options Assessing treatment options Preparing and implementing treatment plans Mitigation and Contingency

17. COMP8130 and COMP4130 Adrian Marshall Monitoring & Reviewing Risks Monitoring environmental and causal factor changes Monitoring treatment effectiveness Monitoring risk management process effectiveness

18. COMP8130 and COMP4130 Adrian Marshall 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