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Risk Assessment Case Study – Ex Nihilo Management

 

Risk Assessment Case Study

Background

As a result of a reorganization and realignment of resources, Ex Nihilo's client assumed responsibility for several production systems that were being maintained by internal personnel and contractors. The hardware upon which the systems currently operated was being sunset by the manufacturer, thereby resulting in long lead times for problem resolution and high maintenance costs. After a nine-month period of time, the client initiated an effort to eliminate the hardware support costs associated with these systems.

Solution

Ex Nihilo developed a set of alternative configurations based on an understanding of the target environment, current initiatives and system constraints. A preliminary evaluation of the alternatives was conducted using published policies, procedures and standards. A description of the technical requirements for each alternative was developed to identify meaningful system characteristics that were used to select the best alternative. The performance and cost for each alternative was determined based on available data. A weight factor was applied to the data to select the best alternative.

Ex Nihilo performed a risk assessment to identify, analyze, document strategies for and manage the risks associated with the new hardware environment. A set of risks associated with the implementation of each alternative was identified by conducting a series of interviews, meetings and documentation reviews. The risks were categorized based on whether they were associated with business, technical or project problems. The probability of occurrence for each risk was determined based on how real the risk was percieved in the eyes of the client management team. A qualitative probability scale was developed to reflect the perceived likelihood of each risk. The consequences of each risk were described and the impact of each risk was estimated.

Results

As a result of this effort, the client realized a $1 million cost savings by making a one time investment in the acquisition of the new hardware. System performance and operational efficiency were increased because of technological advances in the hardware.