In the era of the emerging technology the systematic failure or the vulnerabilities in the system is becoming a concern issue. The systematic risk can be defined as the chances or the probability where the possible risks can be entered into system and make the constraints in the daily functioning of the business. The discussion is this paper is regarding an approach regarding the systematic risks. The mane of the system is “ Earth System Science”. The main aim of this system is to evaluate complex problems. The approach for the development of the system is the data driven approach (Galaz et al.2017). The system will gather data and information and will process it to make the sustainable results. Regarding the development of the system the identification of the different risks those can be encountered by the system have been discussed in this paper. In order to understand the concept of the systematic risk, summarization of the perspectives regarding systematic risks has been done.
Systematic risks refers to the system which unable to carry on the normal functionality due to some of the constrains (Lin et al. 2017). In this case, the constraints can be internal or external. In some cases it has been seen that the system fails to operate properly as there are some technical issues (Mach et al. 2016). In some cases the external constraints such as cyber threats can prevent the system to operate in a normal way. It has been seen that a common factor such as economic shock or failure of any institution or organization can raise the risk of the system. The failure of the system can produce both technical and non technical consequences. The risks in non technical fields covers the financial risk.
The failure of the system is related to the financial risks. In order to understand the correlation between these two terms , the definition of the financial risk is needed to be evaluated. The classic example of the financial risk is the failure of the banking system. Systematic failure can lead to the financial risks. However, in this context, only the financial risk has been evaluated with respect to the system risk.
The effect of globalization and the application of the technology is changing In this context the systematic risks have been evaluated from the technical perspective. It has been seen that in the era of globalization the failure of the interconnected system has lead to many constraints. However, in many cases it has been seen that the failure of the system is giving the opportunity for the improvisation. The failures in the systematic risks are not independent. These failures are the dependent failures that affects the other entities. The risk in the system increase as the systems are highly coupled. The networked system are more vulnerable to the risks.
Global risks are one of the major concerns nowadays. The risks are perceived in a networked manner. This raises the chances of crisis which can propagate through national boundaries (Nuijten et al. 2015). The main feature of the content of this discussion is that the discussion tries to fill the gap regarding the understanding of the significance of the governance of the system to avoid the systematic risks and the failure of the systems. Five multi disciplinary key insights have been discussed regarding the governing of the different risks in the system.
Global risks are defined as the globally propagated risks or failures which propagates failures in the system. All these risks are generally termed as “globally networked risks”. Globally networked risks poses fundamental challenges regarding the governance of the institutions and the organizations. This discussion is concerned about finding out different global risks and mitigation challenges regarding this.
The system regarding the global risk in this case is “Earth system science”. This is the system that helps in the better understanding of the information along with the evaluation of the information and the communication technology. This system is applicable to process on the complex problem in difficult situation and provides the result that would be sustainable for the environment as well as effective. The approach that has been followed in this case is the data driven approach.
The global risks can be raised due to the discontinuous transition and changes in the parameter. These changes can be occurred at the tipping points in the system. In this case the distribution of the event size are related to the cascade effect. Certain theories has been deployed in order to implement the system. The analysis of the system can be done on the basis of different perspectives.
In most of the cases global systems are dynamic. The structural and functional complexity of the system can become a challenge for the system regarding reliability and efficiency (Hooker, Capon and Leask 2017). In most cases these complex dynamic systems can not be understood by the functionalities of all the components. The system is complex and non linear. The non linear nature of the network causes the delay in the response and a small required change can create large problem during the functioning of the system.
In most of the cases it has been see that the systems are inter related strongly with each other. Cascade effect can raise due to the strong interactions between the system. In case if the components of the system are strongly coupled, the changes in the functionality of the system may occur. In this case, happening of the one event can trigger the happening of another event (Lo and Chan 2017). Cascading effect can happen during the transition of the system from a stable to unstable version of the system which is heavily correlated with each other and driving the system to the phase which is not equilibrium. In this case extreme events happen more frequently for normally distributed event size. Sometimes the cascade effects are not easy to identify. In this case, the traditional cause effect formulation will not be helpful for solving the problem. The situation will raise many possible paths for the events to occur which will eventually make delay in the project.
The system in this case is referring to different inter related components. The components can be both technical or non technical. In this case the failure of the system poses certain risks in different sectors of the global system.
Risks regarding the information and communication system: The main risk that can happen due to the failure of the global system is the problem in the information system and the flow of communication. This will directly effect on the communication and the global information system. It has been seen that technology has been used for solving different problems. However, certain issues can be raised during the use of technology (Chatfield and Reddick 2018). Such issues can be ethical issues like the use of the personal data and the challenges related to the cyber risks. Information technology can be considered as one of the largest global artifacts. The main components of this artifacts are computer, laptops, smart phones and different digital gadgets. In the cyber social world this digital information delivers the real events. The hyper connectivity of these system and large complexity along with production of massive data volumes can lead to different problems (Pescaroli and Alexander 2016). Sometimes , automation of the system makes autonomous decision making which can cause problem in solving the real world issues.
Risk regarding the financial meltdown: The massive trade of the derivatives in the financial sector is making risks for the economy (Pescaroli and Alexander 2016). Financial risks are mainly occurred with the happening of the failure of the banking system or financial institutions. While finding the reason for the financial meltdown it has been found out the improper balancing and the interconnection between different components are the cause of the financial meltdown. It has been seen that financial companies are doing well in individual manner (Howes et al. 2015). However, while all the components of the institutions are summed up, an improper balance seemed to be present in the composition.
Crowd disaster: Crowd disaster can be described as the failure of control within a complex system. In a crowd the interaction between the people increases. This causes phenomenon called “crowd quake”. This can hamper the control over large number of people and can harm people. From this example it can be said that sometimes the damage may not be happened from the fault of individuals , but the inability to manage and merge consequence of all functionalities in the system.
Change in the micro dynamics in the micro level system of the behavior can cause the change or can lead the uncertainty in the system (Drennan, McConnell and Stark 2014). In this case the example of twitter can be given. As for example a single tweet in the twitter can cause social unrest around the globe. In this case the complexity in the behavior causes the uncertainty in the system.
One of the cause for the uncertainty is the lack of data in the system. In some cases, the output of system 1 is the input of system 2. In this case, the input of system 2 can be any value and the outcome in this case can not be predicted (Bakhshi, Ireland and Gorod 2016). This uncertainty can bring the complexity in the system.
The role of the project manager is to lead the project management team in such a way that the outcome of the project can meet all the requirements of the clients. The role of the project manager is similar to the leader of the project. The main responsibility of the project manager is to manage the risks in the complex system properly so that the development of the project may not face any challenges or problem (Szymanski et al. 2015). The main issues in the complex system are known as the systematic risks which includes the uncertainty. The risks cannot be eliminated completely (Eckersley 2015). However risk can be mitigated. The minimization of the probability of the man made uncertainty can be mitigated through the clear documentation of the requirement and the proper analysis of the requirements. On the other hand managing the large project group can be compared to the managing the risks from the crowd disaster. In order to manage the uncertainty in this case, proper meeting in periodic manner can be done so that the interaction between the team members and the sharing of knowledge can be done in a proper way. The implementation of the functionalities are needed to be done properly (Wang and Li 2014). It is the responsibility of the project leader to observe and monitor the whole implementation. Risk regarding the communication and the information technology can be mitigated through the detailed knowledge of the system and the technology being used for the development.
|
Risk Name |
Type |
Likelihood |
Severity |
Rating |
Mitigation |
|
|
Information system and communication risk |
Technical |
2 |
5 |
10 |
Too much dependency on the information system is needed to be reduced. |
|
|
Financial meltdown |
Economic |
3 |
4 |
12 |
The merging of the different component is needed to be done properly |
|
|
Crowd disaster |
Procuremenr |
4 |
2 |
8 |
The communication or interaction between people should be controlled through systematic way |
|
|
Man made uncertainity |
Human |
1 |
3 |
3 |
Analysis of the requirements are needed to be done in a proper way. |
|
|
Changes in the behavioural rules |
Operational |
5 |
1 |
5 |
The verification of the information is needed to be done by individuals |
|
|
Likelihood |
Rare |
Unlikely |
Possible |
Likely |
Certain |
|
|
1 |
2 |
3 |
4 |
5 |
||
|
Severity |
Negligible |
Low |
Medium |
High |
Critical |
|
|
1 |
2 |
3 |
4 |
5 |
||
|
Rating |
1 |
2 |
3 |
4 |
5 |
|
|
2 |
4 |
6 |
8 |
10 |
||
|
3 |
6 |
9 |
12 |
15 |
||
|
4 |
8 |
12 |
16 |
20 |
||
|
5 |
10 |
15 |
20 |
25 |
Conclusion
In this discussion the systematic risks has been done in this study. The risks in the system are dependent on the various factors like functioning of the different components and the communication between systems. Identification of those risks and the analysis of the causes of the risks has been done in the discussion. Moreover, the effects of the risks in the project and the role of the manager or the project leader in the management of the project has been defined in the discussion. It can be concluded from the study that the complete elimination of the risks from the system is not possible. However, the mitigation of the risks are possible and it is the responsibility of the project manager to develop a proper risk management plan for the complex system.
References
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Drennan, L.T., McConnell, A. and Stark, A., 2014. Risk and crisis management in the public sector. Routledge.
Eckersley, R., 2015. Beyond inequality: Acknowledging the complexity of social determinants of health. Social Science & Medicine, 147, pp.121-125.
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Lin, X., Moussawi, A., Korniss, G., Bakdash, J.Z. and Szymanski, B.K., 2017. Limits of risk predictability in a cascading alternating renewal process model. Scientific reports, 7(1), p.6699.
Lo, A.Y. and Chan, F., 2017. Preparing for flooding in England and Wales: the role of risk perception and the social context in driving individual action. Natural Hazards, 88(1), pp.367-387.
Mach, K.J., Mastrandrea, M.D., Bilir, T.E. and Field, C.B., 2016. Understanding and responding to danger from climate change: the role of key risks in the IPCC AR5. Climatic Change, 136(3-4), pp.427-444.
Masys, A.J. ed., 2016. Exploring the Security Landscape: Non-Traditional Security Challenges. Springer.
Nuijten, A., van Twist, M. and van der Steen, M., 2015. Auditing interactive complexity: Challenges for the internal audit profession. International Journal of Auditing, 19(3), pp.195-205.
Pescaroli, G. and Alexander, D., 2016. Critical infrastructure, panarchies and the vulnerability paths of cascading disasters. Natural Hazards, 82(1), pp.175-192.
Szymanski, B.K., Lin, X., Asztalos, A. and Sreenivasan, S., 2015. Failure dynamics of the global risk network. Scientific reports, 5, p.10998.
Wang, L. and Li, X., 2014. Spatial epidemiology of networked metapopulation: An overview. Chinese Science Bulletin, 59(28), pp.3511-3522.
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