Here at RiskyDecisions, we have been working hard to establish a new company with the main purpose of making it easier for organisations to integrate risks and uncertainties in their business decision-making processes – and to do it consistently and in quantitative terms. This makes it possible to compare the resulting probabilistic business cases on a like-for-like basis. Consistency across projects is essential for strategic portfolio analysis and for continuous improvement based on the tracking of historic performance.
We have developed a framing process that is designed to help an organisation extract the best available knowledge for a project or strategic concept in order to identify and quantify risks and uncertainties. These inputs are used to prepare a logical workflow which, in turn, forms the basis for the simulation of possible outcomes. The simulation process combines options and inputs to calculate performance indicators and provide the required results to establish the value of the project. We use a very fast Monte Carlo simulation engine to analyse the various options and potential outcomes. In most cases the end-result will be a probabilistic business case with cash flow variations representing the risks and uncertainties included in the simulation model.
Our development has reached the stage where we have a prototype of our software ready for testing. Although quantitative integration is generally becoming accepted as the most consistent way of representing risks and uncertainties in decision making, very few good practices have been established for the ultimate use of the probabilistic results in decision making. We are therefore looking for collaboration with organisations who would like to improve their capabilities in these areas and, together with us, create good practices for the preparation, presentation and practical use of simulation results in business cases and decision making processes.
We believe that these processes are becoming increasingly important and are certain that, in the future, mastering the integration of risks and uncertainties in the decision making processes will be key to the commercial success of any organisation dealing with large projects in a world of constantly growing complexity.
Please contact us if you would like to discuss the potential for your organisation to join us in designing a risk management solution for the future.