When risk is all in your head

Watching the control room last Sunday as the Mars Rover Curiosity landed, you saw the engineers pouring over their model for how the landing should happen. They were calling out loud the things that could go wrong and their responses to each event. There was a clear story that emerged from the live feed: There were many risks and these folks were ready for anything.

The rest of the world operates with plenty of risk but doesn’t always have the tools to do it well. Such a shame, since so much is riding on the ability to quickly respond to problems.

Often, the things that could go wrong are in the heads of key people. If those individuals are in different parts of the organization’s hierarchy, risks get pretty tough to manage.

Against that backdrop, what happens when risk arrives from a combination of factors? In the global economy, a company that builds anything using technology has risk from fluctuations in currency exchange rates, interest rates, volatility in prices for semiconductors and other components, natural disasters affecting supply chains and many other external factors. Add to that internal challenges around capital and project management.

If that wasn’t enough, today’s environment utilizes Cloud storage and processing as a cheaper alternative to massive server farms. This introduces new operational and security risk as companies own less of their environment than before. Inside risk, outside risk, new technology risk; how can anyone keep that in their head?

Brains aren’t enough

With this complexity, it becomes impossible for the human brain to keep up with the sources of information that carry direct warnings, but also the information to be analyzed and correlated for potential risk. This problem requires technology and any solution needs to provide the following:

  • Repository of risk – A home for known risks where each can be owned, constantly analyzed and updated
  • Big information funnel – A way to bring in high volumes of real-time information that may have high variation in format
  • Continuous vigilance – A way to watch constantly for signs of trouble, even when the signals are varied and from many sources.
  • Immediate notification – People need to know a problem is occurring immediately while there’s time to react
  • Automated response – Many responses can be automated to operate 24×7 and at speeds that humans can’t match

This isn’t a simple thing as imitating the human brain’s ability to assess risk is beyond the capacity of any software most of us can buy (IBM’s Watson is a little out of reach).

But just shy of that goal is the concept of complex event processing. Events are the logical maturity of moving from batch data processing in the 80’s to online processing in the 90’s, to event processing in today’s complex, high-speed, 24×7 world.

These systems are in place across many industries and are the brains behind on-time delivery of packages, protecting capital, response to cyber attacks, getting products to market, and preventing power outages to name only a few. It is quietly becoming the most important piece of managing risk.

This is cutting edge technology that underlies more than most people realize. To know more, check out David Luckham’s book, “Event Processing for Business.”

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Categories: Patterns / Rules / Events

Author:Chris Taylor

Reimagining the way work is done through big data, analytics, and event processing. There's no end to what we can change and improve. I wear myself out...

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2 Comments on “When risk is all in your head”

  1. August 13, 2012 at 10:49 am #

    Thanks for the post Chris – I’ll check out the book.

Trackbacks/Pingbacks

  1. Finding opportunity when profits are razor-thin | Successful Workplace - August 14, 2012

    […] a recent post, When risk is all in your head, I described how tricky risk as become as humans simply can’t keep all of the important […]

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