【正文】 tti Drivers for increased risk awareness ? business needs ? stakeholder awareness ? recent crisis (World, Enron, Tyco etc) ? pliance issues ? Turnbull/UK ? KontraG/Germany ? Netherlands ? SarbanesOxley: USA ? food for thought: do investors appreciate systematic risk management – they penalize you if you miss ! HKK 1/30/2023 11 Nokia Mikko Routti Building up a Risk Management System People and petencies Process Methods Tools ? People and petencies form the foundation of risk management ? Process helps ensure their skills are applied consistently ? Methods assure that risk management is done well ? Tools increase productivity … and can sometimes direct people and processes HKK 1/30/2023 12 Nokia Mikko Routti Objectives of Risk Management ? Control ? All projects have risks and some risks will occur ? RM is an investment into the future: ? It is often cheaper to avoid a potential problem than fix an occurred one ? If you only fix problems as they surface, the flow of future problems will continue to keep you busy ? RM improves predictability and control of projects ? Understanding ? Know where the risks are and focus on essential risk areas ? Consistent understanding of risks throughout the anization ? Learn from the risks that occurred HKK 1/30/2023 13 Nokia Mikko Routti What is Risk? “W e don’ t ha v e a lot of ex pe rien c e in gra ph ic al us er int erfac e” “R eq uire m en ts are un s tab le” T hin gs t ha t c on t ribu t e t o ris k R i sk fac to r s “Ex c ess iv e t im e m ay be s pe nt on user interf ace de v elo pm en t” “R eq uire m en ts m ay c ha ng e” T hin gs t ha t ha pp en R i sk ev en ts “W e m ay ha v e t o rew ork the user interf ace” “Ex tra dev elo pm en t eff ort m ay ne ed to be s pe nt du e t o requi rem en ts c ha ng e” C on s eq ue nces of t hin gs t ha t happened R i sk o u tco me s “Pro ject m ay be late an d ov er budg et” Eff ect s of t hin gs t ha t ha pp en on v alu ed c ha ract e rist ic s R i sk effe cts o n g o als “T he re is a 50% ris k tha t J oe w ill quit be fore s y s tem test ing ph ase” Pro ba bilities of t hin gs t ha t c ou ld hap pe n R i sk ev en t p r o b ab i l i ty “T he use of C AS E t oo l X Y Z is a ris k in t he pro ject ” “I t w ou ld be a risk to deliv er t he pro t oty pe too ea rly ” An y t hin g as s ociat ed w it h ris k A ctio n , p erso n o r o b j ec t th at i s asso ciated to r i sk HKK 1/30/2023 14 Nokia Mikko Routti Risk is a manyfaceted Concept ? slippery driving conditions (rain, snow) ? a car accident ? untreated personal injuries, damaged vehicles ? treatment of injuries, purchase of a new car ? medical costs, permanent injury effects, higher insurance premiums ? The effect of pain, lost time and expenses as felt by individuals Risk factor: something that influences risks Risk event: occurrence of the risk Risk oute: immediate impact of risk event Risk Reaction: reaction to the risk Risk effects: effects of risk Utility loss: perceived value of effects by stakeholders HKK 1/30/2023 16 Nokia Mikko Routti Project view: falling short of goals Scope of Risk Management Financial view: variance Risk Management Pain (Risk) Gain (Opportunity) Uncertainty Impact HKK 1/30/2023 17 Nokia Mikko Routti Definitions of Probability ? Classic probability ? Future outes are deposed into atomic, equally probable ponents ? Frequencybased probability ? Ratio of a certain event in an infinite series of identical trials ? Subjective probability ? A person’s subjective belief of the likelihood of an event occurrence HKK 1/30/2023 18 Nokia Mikko Routti Timeframe and Risk ? Timeframe (or urgency) ? actually an attribute of risk and controlling action ? People have strong biases for nearterm risks ? Waiting may buy information and new solutions t im eP res entR is k ev entoc c u renc eri s k c o n t r o l li n g a c tio nimpa ct d e la yR is k c o nt r oll i ng ac t i oni mpl em ent at i on ma rgi n(= ur genc y )HKK 1/30/2023 19 Nokia Mikko Routti Definition of Risk ? Risk is a fuzzy concept: be clear on what you mean ? Risk is not the same as a problem: ? probability = 1 ? problem solving – too late ? Risk is relative to stakeholders and their expectations ? The rightlevel of abstraction is critical ? … and it depends on the situation VOCABULARY:example GGoal and stakeholder review A process step in risk management. The stated goals of the working entity (Business Unit, Product program, Business Group, Function etc.) are reviewed and refined. Stakeholders39。HKK 1/30/2023 1 Nokia Mikko Routti Mikko Routti Director, Risk Management Nokia Corporation Risk Management HKK 1/30/2023 2 Nokia Mikko Routti Main Themes of Presentation ? scope of presentation: business risk (widely) ? our philosophy about risk management ? where we are today on the journey of ERM ? how to do this in our anisation ? balance between practical, valuebased and analytical, factbased thinking ? what kind of methods and tools we use () ? how do we and others municate about this