“Appraisers should calculate an expected value of all risks for each option”…so says the Treasury Green Book (the gold standard in how UK public sector decisions should be made) and there are increasing examples where organisations wish they had taken the hint. No wonder, our experience shows that in a discomforting number of cases if the value of risks had been properly calculated the project would have been done very differently (and sometimes not at all).
The heart of our approach is beautiful, simple insights that help decision makers make prudent and defendable decisions. Proper risk modelling can be quite arcane, (after all the maths was invented as part of the US nuclear missile programme, so yes it is rocket science!), but the art is in keeping it simple.
- Determine how likely it is that the required savings will be achieved
- Find the prudent level of expected savings to use for budget planning
- Determine realistic costs and benefits across the whole portfolio of efficiency projects
- Apply the recommended approach of HMG’s Treasury to properly quantify costs, benefits and risks before committing to action
- Re-calculate risk values as the project or programme emerges using our subscription based service.