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NATIONAL PPP SUMMIT 2016 Craig O’Neill November 2016

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Page 1: Craig O'Neill - Honeywell

NATIONAL PPP SUMMIT 2016Craig O’Neill

November 2016

Page 2: Craig O'Neill - Honeywell

Honeywell Confidential © 2016 by Honeywell International Inc. All rights reserved.

Identifying, Managing and Mitigating Risk

during the operational phase of a PPP

• Developing a transparent performance management framework

• The use of data and analytics to measure and report on

performance

• Maintaining effective stakeholder relations

• Managing the people risk in the PPP operational phase

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Page 3: Craig O'Neill - Honeywell

Honeywell Confidential © 2016 by Honeywell International Inc. All rights reserved.

Introduction - Identifying, Managing and

Mitigating Risk

• Technical Risks

• Delivery Risks

• Murphy’s Law

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Page 4: Craig O'Neill - Honeywell

Honeywell Confidential © 2016 by Honeywell International Inc. All rights reserved.

Maintain the Asset at the Agreed Standard

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Page 5: Craig O'Neill - Honeywell

Honeywell Confidential © 2016 by Honeywell International Inc. All rights reserved.

Delivery Risk

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Page 6: Craig O'Neill - Honeywell

Honeywell Confidential © 2016 by Honeywell International Inc. All rights reserved.

Back in the Race

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Page 7: Craig O'Neill - Honeywell

Honeywell Confidential © 2016 by Honeywell International Inc. All rights reserved.

Delivery Risk

• 200 KPI’s

• 10,000 Events per year

• 25 years

• Abatement Value

• 99.9% Service Levels

• Abatement Calibrations

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Page 8: Craig O'Neill - Honeywell

Honeywell Confidential © 2016 by Honeywell International Inc. All rights reserved.

Murphy’s Law

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Page 9: Craig O'Neill - Honeywell

Honeywell Confidential © 2016 by Honeywell International Inc. All rights reserved.

Identifying Risk

- High Level general risks

People Risks

Delivery Risk

Business Risk

- Detailed level Processes and /or individual assets

In what ways does the Key Input go wrong?

What causes it to go wrong

What are the effects

Control measures available to prevent the event or cause

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Page 10: Craig O'Neill - Honeywell

Honeywell Confidential © 2016 by Honeywell International Inc. All rights reserved.

Identify, Manage, Mitigate

Identify

1. What is the:

a) Risk

b) Likelihood

c) Consequence

d) And therefore Risk Level

Manage

1. How to eliminate, control, depart

2. What does the Risk Level now look like

Mitigate

1. Has the action/procedure/control been put in place

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Page 11: Craig O'Neill - Honeywell

Honeywell Confidential © 2016 by Honeywell International Inc. All rights reserved.

Quantitative Output

Consequence

Negligible Minor Serious Major Catastrophic

1% 10% 30% 70% 90%

Lik

elih

ood

Almost Certain 90% 90% 91% 93% 97% 99%

Highly Likely 70% 70% 73% 79% 91% 97%

Likely 30% 31% 37% 51% 79% 93%

Unlikely 10% 11% 19% 37% 73% 91%

Remote 1% 2% 11% 31% 70% 90%

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Panic Barometer: Pre Control 75% Post Control 25%

Page 12: Craig O'Neill - Honeywell

Honeywell Confidential © 2016 by Honeywell International Inc. All rights reserved.

Quantitative Evaluation

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Consequence

Catastrophic (0.9)

Loss, damage or interruption to business > $5M Financial loss greater than 80% of contract value Significant public interest, media involvement or regulatory intervention Significant impact on business reputation Fatality of employees, contractors, or the public.

Major (0.7)

Loss, damage or interruption to business > $1M but < $5M Financial loss > 50% but < 80% of contract value Moderate public interest, media involvement or regulatory intervention Moderate impact on business reputation Extensive injury or Hospitalisation of employees, contractors, or the public.

Serious (0.3)

Loss, damage or interruption to business > $100K but < $1M Financial loss > 20% but < 50% of contract value Some public interest, media involvement or regulatory intervention Some impact on business reputation Medical treatment of employees, contractors, or the public.

Minor (0.1)

Loss, damage or interruption to business > $5K but < $100K Financial loss > 5% but < 20% of contract value First-aid treatment of an employee, contractor, or a member of the

public

Negligible (0.01)

Other than above

Table 1: Consequence Criteria

Likelihood

Almost Certain (0.9)

Likely to occur frequently in the period of contract Likely to occur several times per year

Highly Likely (0.7)

Likely to occur several times in the period of contract Might occur once in 5 years

Likely (0.3)

Likely to occur in the period of contract Might occur once in 5 years

Unlikely (0.1)

Possible, but unlikely in the period of contract Might occur once in 10 years

Remote (0.01)

Highly unlikely in the period of contract Might occur once in 100 years

Table 2: Likelihood Criteria

The Risk Analysis Matrix uses the following formula for calculating the risk level:

R = L+C – (LxC)

Where; L is the likelihood score, and C is the Consequence score

This is derived from the probability of disjunctive events and leads to high scores for

either high likelihood, serious consequences or both.

Page 13: Craig O'Neill - Honeywell

Honeywell Confidential © 2016 by Honeywell International Inc. All rights reserved.

Managing Risk - People

• Training

• Communication

• Contingency Plans

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Page 14: Craig O'Neill - Honeywell

Honeywell Confidential © 2016 by Honeywell International Inc. All rights reserved.

Managing - Data and Analytics

• Technology required to track:

• 30 - 200 KPI’s per Month

• 5,000 to 10,000 events annually

• Maintenance Management System

• Analysis Tools

• Predictive monitoring

• Quality of Service

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Page 15: Craig O'Neill - Honeywell

Honeywell Confidential © 2016 by Honeywell International Inc. All rights reserved.

Managing Risk – Is There a Better Way?

• Abatements

• Balanced Scorecard approach

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Page 16: Craig O'Neill - Honeywell

Honeywell Confidential © 2016 by Honeywell International Inc. All rights reserved.

Mitigating Risk

• Stakeholder Relations – 7-10 different organisations

• Contingency Planning

• Outside Reviews

• Strong Mobilisation

• Staff Competencies

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Page 17: Craig O'Neill - Honeywell

Honeywell Confidential © 2016 by Honeywell International Inc. All rights reserved.

Summary

• Identifying, Managing and Mitigating Risk

• Management framework

• Data and analytics

• Stakeholder relations

• People risk

• Murphy’s Law

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