Aug 24, 2017 10:40 AM
Replying to Stephen Grey
...
Item 1 is strategic and lends itself to a comparative risk analysis - exploring the risks in the two scenarios (do it/don't do it), evaluating each risk in the context of each scenario no matter which scenario brought it to mind, and looking at the picture each option then presents in terms of risk and other matters. This is particularly relevant where one of the motivations for a project is to reduce risk in routine operations - replace aging infrastructure, develop an in-house capability to supplement or replace an external source that is unreliable and so on. A similar approach can help select between alternative investments.
The second two can be addressed as two separate routine risk assessments if you are looking at management of implementation and operation. On the other hand, they can be combined if you are looking at quantitative assessment of financial uncertainty where the delivery costs and operating costs are just two parts of one overall cash flow and the implementation schedule determines when benefits, or revenue, start to flow to pay off the initial investment.
If you need to consider that perspective, you might want to do the same thing for the proposed investment and the do nothing case - look at cash flow, NPV etc. A simple example is looking at whether to invest in a hot standby for a business critical IT system. Costing the investment is not usually too hard and it is possible to think through the circumstances in which the service could be interrupted and what it would cost to cope with that with and without the backup.
You might find our book useful
http://broadleaf.com.au/resource-material/...ent-guidelines/ and our web site has a lot of free materials on several aspects of risk management. Some of the case studies might be relevant
http://broadleaf.com.au/work/
