Renaissance Risk

Improve your odds
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Frequently Asked Questions

 

 

 

 

 

 

Q: What are your unique approaches to risk & uncertainty, and why should your advice be of more value than your competitors?
 
A: Our uniqueness can be summarised in three sentences. First, we consider upside risk, as well as downside risk - giving consideration to both creates an approach which facilitates enhanced growth as well as helping protecting the bottom line. Second, we bring in a Bayesian approach to the modelling process wherever it is required - this enables us to provide an insight into issues which might otherwise prove intractable. Third, we endeavour to add quantification to the understanding of the risk and uncertainty - qualitative assessment will help with understanding, quantification enables the development of cost-benefit analysis.
 
Focus, Independence and Specialisation provide the added value. We focus on your business; you are different to your competitors, and we want to understand that difference so that we can develop and help implement solutions designed for you, not the generic industry that you are in. We specialise in a relatively narrow field of consultancy, that's not to say that our ideas and processes would not be of value across a wide spectrum of industry sectors, but being able to specialise enables us to understand the issues quicker and refine the models. The benefit to you is savings in time, cost, and improved management information.
 
Q: How can you possibly quantify my risks and uncertainties when there is so little information available?
 
A: There is always a balance to be struck between robustness and relevancy. Our experience has shown that it is often better to have reduced levels of quality information, supplemented by expert judgement in the Bayesian modelling, than copious amounts of suspect data which are probably cross-contaminated. The initial modelling process will reveal which data are particularly relevant, and which will have a key impact on the outcome. It is then better to spend time improving the quality of these data. We can also synthesise loss data through the application of fault tree and event tree analysis. It is remarkable how much richer the outcome is when the data quality is sound.
 
Q: What is a Bayesian approach; what are the advantages and are there any limitations?
 
 
Quantitative analysis techniques have gained a great deal of popularity with decision-makers and analysts in recent years. Unfortunately, many people have mistakenly assumed that the techniques are magic "black boxes" that unequivocally arrive at the correct answer or decision. No technique, including those used by Renaissance Risk, can make that claim. These techniques are tools that can be used to help make decisions and arrive at solutions. Like any tools, they can be used to good advantage by skilled practitioners, or they can be used to create havoc in the hands of the unskilled. In the context of risk and uncertainty, quantitative tools should never be used as a replacement for personal judgment. Which is why our Bayesian approach is so valuable.

Finally, you should recognize that no Risk Analysis can guarantee that the action you choose to follow — even if skillfully chosen to suit your personal preferences — is the best action viewed with hindsight. Hindsight implies perfect information, which you never have at the time a decision has to be made. You can be guaranteed, however, that you have chosen the best strategy given the information available. That's not a bad guarantee!
 
Q: What is the size of a typical project, and how much might it cost?
 
A: Our projects have ranged from a few days to several months, but there are usually distinct phases in the modelling process where one can stand back, review progress, and then either continue, change direction, or even stop the work, perhaps because enough management information has been created. We certainly recommend a drill-down approach, peeling back the layers one by one to expose the issues in greater detail, and stopping to focus on key areas as appropriate. The costs will also vary from project to project, but will always be far less than the value we will bring to your company. So, our recommendation is, start small, see the value, agree the next phase.
 
As an aside - we have been accepted as an approved signatory of the Prompt Payment Code, and we will always appreciate our clients complying with this code.