Risk management

Each asset that an agency is responsible for can potentially fail in various different ways, with consequences ranging from temporary loss of service to major property damage and loss of life. Risk management provides a way to calculate a set of risk scores for each asset, where each score represents the level of risk for a particular type of failure.

Because the risk scores for all assets are measured on the same scale, the highest risk assets can be identified and appropriate actions taken. For agencies that are legally required to report on their risk management strategies, Infor Public Sector provides the information that is required to show assets' risk ratings, the numbers of assets at different risk levels, risk scores compared to previous years, and so on.

For example, a city must assess the risks associated with its sewer system. The system consists of various different asset types, such as sewer mains, service lines, valves, and lift stations, so the first step is to identify the different ways in which each type of asset can fail. A sewer main might crack, it might become clogged with roots and debris, and so on. A lift station, on the other hand, is subject to various mechanical failures that won't affect a main or a service line.

Identifying the ways in which assets can fail is a simple process. You create a list of failure definitions, which are codes for different types of failures that can occur, and then you associate asset types with failure codes to indicate which failures can affect each type of asset.

To define how Infor Public Sector will calculate risk scores for these failure definitions, you create risk event types. A risk event is a potential asset failure. An asset's risk score for an event type is based on two primary factors: the probability of the failure and the potential consequences of the failure if it occurs. For linear assets such as roadways, you can also define rules that Infor Public Sector will use to divide the assets into segments before calculating risk scores. If steps are taken to mitigate the risk, you can also include these mitigation factors in the calculation.

Because the probability of failure (PoF) might be calculated in various different ways, you can create multiple probability of failure types. For example, one PoF type might use a formula to calculate an asset's PoF based on factors such as its usage or its inspection indexes. Another might allow you to select a PoF rating from a list of available values. You can also create probability of failure multipliers if the failure is more likely for selected asset groups than for others. For example, a multiplier could be used to indicate that the pumps in the city's oldest treatment plant are more likely than average to overheat due to their age.

The consequence of failure (CoF) is a number that measures the potential seriousness of a failure if it occurs, with higher CoF numbers indicating more severe consequences. To calculate the CoF for an event type, Infor Public Sector sums the scores for the various consequence of failure types that belong to a selected consequence of failure group. Consequence of failure groups factor in a variety of different consequences, such as damage to city property, liability for damage to third party property, and bad press. As with the PoF, you can also create consequence of failure multipliers if the consequences for certain assets are more severe than others. For example, the consequences of a broken sewer main might be twice as severe in an environmentally sensitive area.

When you calculate risk scores, you first enter criteria to select the assets and event types you want to include in the calculation. You can run the calculation manually, or you can use the Batch Manager to schedule it for a later time. The risk results for each asset or asset segment include a separate score for each applicable event. For example, a sewer main might have one score measuring the risk of a blockage and another measuring the risk of the main bursting.

To calculate each risk score, Infor Public Sector first applies any multipliers to the asset's PoF and CoF for the event. The resulting PoF and CoF values are then multiplied to produce the maximum risk score. The maximum risk score is then divided by the sum of any mitigation factors to produce the final risk score:

Risk Score = [(PoF * PoF Multiplier) * (CoF * CoF Multiplier)] / Total Mitigation Factor

After you've calculated risk scores, you can review risk results for individual assets, or you can create risk summary groups to show summary risk information for groups of assets. You can also create risk history records, which capture historical risk information so that you can measure changes in assets' risk scores over time.