woodplc.com

Improving Risk Management for

Agency-wide Application in

Transportation Asset Management

Richard Boadi, PhD

Transportation Asset and Infrastructure Management Conference

State College, PA

October 28-29, 2019

• Asset management and

risk management have

basically become

inseparable due to federal

regulations. How are

practitioners responding in

applying risk concepts

across the

enterprise/agency?

Problem Statement

2 A presentation by Wood.

Performance

CostRisk

• Background

• State of the practice

• Future needs

• Summary

Presentation Outline

A presentation by Wood.3

4

Risk Management Background

Risk Definition

A presentation by Wood.5

RiskIn decision making

NegativeHinders goals

Internal threats

Within agency capabilities

External threats

Beyond agency capabilities

Positive

Supports goals

Risk is the effect of

uncertainty on

expected outcomes

(ISO 31000).

Risk Management Definition and Levels

A presentation by Wood.6

Risk management definition: processes and framework for managing

potential risks, including identifying, analyzing, evaluating, and addressing

the risks to assets and system performance. (23 CFR 515.5).

Source: FHWA

7

State of the Practice

Risk Measurement

A presentation by Wood.8

Uncertainty

Likelihood

Consequence

Opportunities

Hazards

Threats

Vulnerability

Variability

Common Practice

A presentation by Wood.9

• Traditional approach

• Strong foundation at the project level

– Concepts, capabilities, tools, training, etc.

– Scope, cost overruns, schedule, etc.

• Informal application in other business functions

– Lack of documentation

– Mitigation challenges

– Need to apply standardized methods

– Need to strengthen enterprise/agency risk

Application Maturity

A presentation by Wood.10

• What risk?

– Mobility

– Safety

– Physical asset – performance risk

– Financial resource

– Human resource

– Political

– Regulatory

– Legal

Asset Management Application

A presentation by Wood.11

Risk Register

A presentation by Wood.12

Implementation

A presentation by Wood.13

14

Future Needs

• Formal governance

– Overarching strategy, including mitigation approach

– Roles and responsibilities

• Commitment

– Lack of bandwidth

– Liability concerns

• Other important resources to support implementation

– Formal training

– Risk communication

Organizational Culture

A presentation by Wood.15

Data

A presentation by Wood.16

Value – availability, usability, quality

Completeness

Applicability

Need for additional/explicit risk measures

– Perceived consequence – event outcome

– Perceived desirability – risk tolerance

Risk Measures

A presentation by Wood.17

Resource Guides

A presentation by Wood.18

Summary

A presentation by Wood.19

Application

Maturity

• Strong foundation at the project level

• Requires standardized methods

• Lack of capabilities and tools

• Implementation of mitigation strategies

Organizational

Culture

• Lack of buy-in

• Lack of commitment

• Resources for change

Data

• Data quality

• Data appropriateness and completeness

• Risk measures

woodplc.com