Developing New Performance Metrics for Risk Management

“Risk” can simply be defined as an uncertainty that presents either an opportunity or a threat regarding an agency’s ability to carry out its mission. Thus, agency success in risk management rests on the ability to quantify the impacts of the full range of uncertainties that may apply to it. Typically, these impacts are assessed in terms of the agency’s existing performance measures, like asset condition or safety. However, there may be much more to the story in terms of the potential for value creation or cost-cutting related to uncertainty. This would mean not only identifying and quantifying all sources of value/cost related to uncertainty, but would also mean considering risk management as integral to asset management, and not just an afterthought or add-on to traditional condition-based asset management. An agency would need to quantify the benefits and costs of risk management efforts overall. For example, “We have met X% of our risk mitigation goals in the fiscal year.” Hence, depending upon the nature of the goals and objectives of an agency’s risk management program, it is essential for the agency to have a “framework” that satisfies its management needs with appropriate measures, tools, methods, and processes. “Metrics” is a useful term not only for defining appropriate “measures” for quantifying risk-related entities, but also in articulating how these measures will be utilized in the overall risk management framework. There are good examples of transportation agency capabilities in risk management including risk management plans documented in their 2019 TAMP submissions. But there is still significant room to increase these capabilities, especially given the diversity of agencies, the types of risks and uncertainties they face, and the breadth and depths of the frameworks, methods, tools, and valid processes needed to meet increasing requirements for consistency and success in risk reduction across agencies. The term “new metrics” has been coined for a reason, to elevate risk management to a new level, where a comprehensive examination of cost cutting, and value creation options is conducted in managing the range of uncertainties that agencies face. The purpose of this research is to: (1) Document practitioners’ current practices, ideas, and preferences for managing risks and assessing the value-add of risk management programs. (2) Gather best practices for managing risks, valuing risk management overall, and implementing process improvement across the public and private sectors, including the use of “metrics.” (3) Create the basis for a “roadmap” that defines a coherent evolution in the use of performance metrics for risk management that is sensitive to the differences in agency situations, maturities in risk management, and diversity of threats. (4) Develop practical, actionable guidance for developing and using risk management metrics in transportation agencies.

• Record URL:
  http://apps.trb.org/cmsfeed/TRBNetProjectDisplay.asp?ProjectID=5541
• Supplemental Notes:
  • Contract to a Performing Organization has not yet been awarded.

Language

• English

Project

• Status: Proposed
• Funding: $400000
• Contract Numbers:

  Project 23-35

• Sponsor Organizations:

  National Cooperative Highway Research Program

  Transportation Research Board
  500 Fifth Street, NW
  Washington, DC  United States  20001

  American Association of State Highway and Transportation Officials (AASHTO)

  444 North Capitol Street, NW
  Washington, DC  United States  20001

  Federal Highway Administration

  1200 New Jersey Avenue, SE
  Washington, DC  United States  20590
• Project Managers:

  Zhao, Yi

• Start Date: 20230802
• Expected Completion Date: 0
• Actual Completion Date: 0

Subject/Index Terms

• TRT Terms: Best practices; Metrics (Quantitative assessment); Performance measurement; Risk management; State of the practice; Transportation departments
• Subject Areas: Administration and Management; Highways; Planning and Forecasting;

Filing Info

• Accession Number: 01887817
• Record Type: Research project
• Source Agency: Transportation Research Board
• Contract Numbers: Project 23-35
• Files: TRB, RIP
• Created Date: Jul 17 2023 11:32PM