3.3 Successful risk mitigation: some examples

The following caselets examine organizations that consciously adopted some tailored form of risk mitigation. The common significant factor of success in each case was the simple fact that risk was recognized and planned for.

• BP Exploration's global IT organization, XIT, has been measuring financial information since its creation in 1989. In 1993, XIT outsourced all of its IT supply services. In the same year, XIT introduced the balanced business scorecard as a means to assist in the transformation of the remaining IT function from a traditional IT group to an internal consultancy focused on adding value to the business units. The balanced business scorecard went through a number of iterations before it reached its current form. In its metamorphosis, XIT recognized the need for risk assessment and management. Consequently, it has added a risk matrix to the performance management process. The matrix maps risk probability against risk manageability and is used to map identified risks according to these two dimensions. In doing so, BP XIT makes explicit risk elements and provides a vehicle to communicate to the organization the significance of those risks.

• As will be demonstrated by the case study at the end of Chapter 4, the CAPS/PASS projects for the California Franchise Tax Board created an environment of shared risk between vendor and client. AMS bore the burden of development costs while creating a new saleable product; FTB donated a great deal of staff time and knowledge to the development of a...