Rigorous Risk-Based Assessments Boost Asset Management
In our last blog post we introduced the concept of a unified platform for risk-based asset management with our new assetDNA-riskDNA ecosystem. This week, we’d like to pick up from where we left off with a closer examination of the risk assessment tools offered up by the system – specifically as they relate to the management of operational assets – and share an interesting anecdote about a real-world application.
Current approaches to risk-based asset management
Today more than ever, organisations need trusted, consolidated, enterprise-wide intelligence about assets and associated risks, enabling them to make better decisions about asset maintenance, capital works projects and priorities, asset retirement and replacement programs, and business interruption activities such as plant shut-downs.
Whilst some asset-intensive organisations might be more advanced in their effort to integrate risk and asset management than others, the most common practice is to run through a risk assessment matrix. However, the matrix was only ever designed as a rapid risk ranking tool to help make quick judgement calls on big ticket items that warranted further analysis. When used in isolation, their results can be very misleading e.g. an unlikely catastrophic event can fall in the same box as a certain catastrophic event which begs the questions:
- What do we address first?
- Where do we allocate our limited organisational resources?
- Which course of action is going to give us the best business outcome?
Nor does the risk matrix take into account any assessment of timeframes e.g. the risk of an asset failure in the next 3 weeks might be very different from the risk in the next 3 years.
A new rigorous, control-centred approach
With the release of the new riskDNA tool, organisations can move away from a reliance on muddied tools like the matrix, to a well-structured and quantitative approach. riskDNA follows a 7-step process called control-centred risk intelligence, or C2RI, which is heavily focused on key and critical controls and ensuring they are effective at managing the identified issues/risks – all of which enable better-informed risk-based decisions, especially in relation to the management of assets.
A real-world application
As an example of this, one of our manufacturing clients was undertaking a significant $200m capital works program that involved approximately 20 separate asset-related improvement projects at an operating plant. Before embarking, the organisation wanted to understand which projects they should tackle first, so the team ran the projects through a risk matrix which seemingly identified the high-priority targets. However, when the same projects were run through riskDNA using C2RI, it dramatically illustrated the coarse nature of the matrix. One project, which had been relegated as the last cab off the rank, actually showed to be the highest risk item [upgrades to an emission control system], and the project which was going be tackled first, and had organisational resources allocated, was in fact amongst the lowest risk/benefit to the organisation and, what’s more, some of the improvements wouldn’t materially reduce the risk of the assets’ failure. As a result of this more detailed and informative risk analysis through C2RI, the projects were re-prioritised and funding and resources re-allocated.
A unified platform for risk-based asset management
The unified assetDNA-riskDNA platform gives organisations unparalleled, granular insight into operational risk. The combined solution acts as a central intelligence repository, enabling organisations to compare and correlate assets and risk across the enterprise and make better, more informed strategic, tactical and operational decisions. If you’d like to learn more or receive a free demo, please reach out to us at +61 (0)2 9998 9000 or firstname.lastname@example.org. We’d love to give you a guided tour!