Risk Assessment System for Cross-Project RPN Comparison
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Solution Overview
Problem
Businesses face challenges in comprehensively managing operational risks associated with changes and new projects, particularly in identifying market and strategic risks, which are not adequately addressed by existing failure mode and effects analysis processes.
Innovation Solution
A question-and-answer approach is used to automatically generate a risk assessment broken down by business categories, calculating a risk priority number (RPN) that considers severity and detectability, allowing for cross-project comparison and risk versus reward analysis, with color indications and escalation flags for risk levels.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Adaptability or versatility
If traditional failure mode and effects analysis is used, then process failures can be identified and classified, but business risks such as market and strategic risks cannot be identified
Solution Approach 1:
The risk assessment system is designed to evaluate multiple types of risks (process failures, market risks, strategic risks, customer experience risks, reputation risks, legal/compliance risks, financial risks, people risks, technology risks) through a single unified platform, making the system universally applicable across diverse business contexts rather than limited to traditional process failure analysis
2Reliability
If comprehensive risk assessment is implemented, then all business risks can be evaluated, but the complexity of the assessment process increases
Solution Approach 1:
The comprehensive risk assessment is segmented into distinct risk categories (process, market, strategic, customer experience, reputation, legal/compliance, financial, people, technology), allowing the complex assessment to be broken down into manageable components that can be evaluated systematically and independently while maintaining overall comprehensiveness
Solution Approach 2:
The system transforms complex qualitative risk assessments into quantifiable parameters by calculating Risk Priority Numbers (RPN) based on severity, occurrence, and detection factors, enabling comprehensive risk evaluation through standardized numerical metrics that simplify comparison and decision-making
3Measurement precision
If manual risk assessment methods are used, then detailed analysis can be performed, but automation and efficiency are reduced
Solution Approach 1:
The system enables automated self-service risk assessment by automatically calculating RPNs, generating risk reports, and providing risk prioritization without requiring manual intervention for each calculation, thereby maintaining detailed analysis capabilities while significantly improving assessment efficiency and scalability
Data Source
AI summary
A change risk assessment system is disclosed. A question-and-answer approach is used to generate a risk assessment that can be broken down by various business categories. Scoring in example embodiments generates a risk level for each identified that takes into account high severity and low detectability characteristics of specific risks associated with a change or new project. The highest average risk priority number (RPN) from any category can be used to facilitate cross-project comparison of risk and reward balance. A risk level can be calculated for both an inherent risk, and a residual risk. The residual risk is calculated taking a mitigation plan into account. A color indication can be displayed for each identified risk, where the color indication is indicative of the risk level. The scoring for an identified risk can also be made to programmatically prompt escalation of the identified issue.