2 Risk‐based Decision Support

Abstract

ABSTRACTRisk Management is often accomplished in a segmented and incomplete process. The engineering design team will worry technical risks, the mission planning team will worry mission success, and the program management team will worry about cost and schedule risks. None of these issues are independent. Schedule reductions or cost reductions will cause technical risks which may compromise mission success. Likewise a solution to a mission risk will create technical risks which directly impacts cost and schedule performance.Risk‐based decision support is a process of examining the entire risk environment of a decision issue and presenting not just a point value to a decision maker, but the risk impacts, uncertainty, and the risk drivers for the solution options.Current hot topics such as DoD's CAIV (Cost as an independent variable) and NASA's “Faster, Better Cheaper” (FBC) approach to projects and programs are concepts that beg for an integrated approach to risk management. The previous culture was to approach risk as “reduce all risk at any cost”. The current environment demands that risk be a traded resource along with cost, schedule and mission performance. Decisions must be made such that an acceptable mix is achieved.Our approach is designed to integrate these risks into a common framework. It is designed to be a part of the program manager's decision‐making process. All decisions are made within a context of understanding the total integrated risk to the project.