RiskAoA

RiskAoA was developed by Air Force Research Laboratory (AFRL) Headquarters to select between complicated or high value decisions when limited information is available. RiskAoA selects the best possible alternative within a trade-space of cost, project merit and risk. The program was designed to comply with and enhance the Joint Capabilities Integration Development System "J-CIDS," Analysis of Alternatives process. RiskAoA is proprietary to the United States Government, but available to all government personnel from NAVSEA Headquarters, the office of PMS 407. RiskAoA is listed as a 'product support planning tool' on the Acquisition Community Connection, a Defense Acquisition University "knowledge share" site. The commercially available version; Supervene, remains DoD compliant and features enhanced networking and trade-off analysis.

Risk Approaches

RiskAoA is one of the three prevalent risk management approaches, each is applied to scenarios with respective information fidelity: The CAP-M uses market statistics and assumptions to calculate investment risk and expected return on investment for stocks and securities. RiskAoA, applies a constrained model to select the best decisions from limited information, and the probabilistic risk assessment (PRA) method, which assigns a magnitude to individual risks in cost, schedule, performance and safety. Applied chronologically, CAP-M might determine that the market requires a new product or project, RiskAoA then determines the product or project most likely to succeed, and once decided on; the PRA method tracks day-to-day project risks until it is completed. RiskAoA minimizes project risk by selecting the best possible approach, before individual risks can be quantified.¹

¹ = "Risk" is the likelihood that a project will fail to meet its objectives, while 'a risk' is single action, event or hardware component that contributes to a project's "Risk."

Capabilities

RiskAoA was designed to use risk as a trade-space to make decisions between proposals and other alternatives; however, the algorithms are flexible, so that the program can be applied to a wide variety of decisions, choices, or other scenarios with many, possibly interacting, variables.

Ease of use

RiskAoA is easy to use; requiring few administrative and qualitative entries to generate results: Documentation, naming of the study and alternatives, identifying the potential risks, and rating 2-4 impacts for each potential risk. These ratings are evaluated qualitatively as; High (H), Medium (M), Low (L), Negligible(N) or 0, and by a simple count of interacting systems. Optional fields are embedded in the program for annotation.

Intrinsic risk culture adjustment

Sufficient numbers of these semi-quantitative, and even emotive results, are intrinsically adjusted to the risk culture (see also Risk perception) of the evaluator(s), transforming qualitative assessments of risk into a single quantitative value akin to the cost estimates or the project schedules associated with each alternative.

Error cancellation

The nature of the RiskAoA approach causes input errors to cancel or be moderated. The tool was designed with the worst-case assumption that the inputs would be 50% accurate. If the certainty of the evaluations is better than 50%, the forecasting feature becomes dramatically more precise. In addition, random errors cancel, while risk aversion and bias are reduced mathematically.

Simple presentation

The results of RiskAoA are simple magnitudes. Larger numbers are more likely to incur risk than low numbers: Just as the cost of one proposal can be higher than another, or one schedule takes longer, so risk is prioritized with RiskAoA. The alternatives with the highest numbers has the least likelihood of success. Both ratios of results and numeric differences can be used to assess project trade-offs.

RiskAoA forecasting tool

Allows users to determine the confidence in the results, and determine how much information is required to complete the study. Results within the error margin are not distinguishable. For example, if the forecasting tool calculates a 90% accuracy, then results are indistinguishable if they fall within 10% of one another.

"Real World Normalization"

When a known study with well understood results is used as a baseline for the other proposals, the product is a true statement of probability, modified by the forecast accuracy.

These capabilities of RiskAoA are unprecedented; making it the most advanced alternatives management technology employed institutionally, and the first demonstrating the predictive character of the risk management discipline.

Applications and examples

1. Making optimized business and operational decisions with limited information, such as scenarios requiring far future or long-term planning. This application provides a predictive ‘at-a-glance’ assessment of the number and magnitude of difficulties expected from different alternatives.
2. Provides easily reviewed documentation in support of defense or major acquisition decisions. RiskAoA aids in justifying risk vs. return propositions from proposals, as may be required by Milestone Decision Authorities (see Joint Requirements Oversight Council).
3. Provides the Risk Adjusted Life Cycle Costs (LCC) estimates required by the General Services Administration (GSA) for the Analysis of Alternatives.
4. RiskAoA may be used aggressively to determine competitors or adversaries most probable courses of action.
5. Used "in reverse," to translate small amounts of accurate information into a rapid display of risk assessments, as if for program review.
6. Answers the question, "How do you know you made the right decision?" By tracking the progression of the project's risks so that discarded alternatives can be compared in hindsight.
7. To compare the evolving risk of a single project's subsystems during an acquisition. For example, in a jet fighter acquisition, the program manager may wish to know where the largest risk in the effort is, and hence where to focus his efforts, for example between:

• Weapons systems
• The electronic warfare suite
• Propulsion
• Command and control systems
• RADAR systems
• etc.

8. Use to evaluate hypothesis, courses of action or decisions with high uncertainty and/or many details.

History

RiskAoA algorithms were invented and developed by Gregory M. Tyler, and its user interface was developed by the MITRE Corporation. The prototype to RiskAoA was called "RiskHammer," and was approved by the US Air Force Electronic Systems Center-Acquisition Center of Excellence (ESC/ACE) in 2002. (see Hanscom Air Force Base). Since its first release, it has been validated by other United States Department of Defense (DoD) organizations: Air Force Material Command (AFMC)-Reporting Units; Validated, Verified and Accredited (VV&A) by AFRL and reviewed by AFMC/EN. It is endorsed DoD-wide by the Office of the Under Secretary of Defense for Acquisition, Technology and Logisticsin 2007 and by the Defense Acquisition University for use in DoD Analysis of Alternatives acquisition process. It is also unique in being the only technology ever produced by AFRL Headquarters, and one of three Cyber-technologies produced for its Cyber-mission in 2006.
It is currently being used by the Global University Alliance as framework to establish and define the ontology of risk management.

See also

• Analysis of Alternatives
• DODD 5000.1
• DODI 5000.2
• Joint Capabilities Integration Development System and (JCIDS) Manual
• Military acquisition
• Prediction
• Predictive analytics
• Project risk management
• Risk management
• Risk management tools