Knowledge Alliance Proposal: WP 5 Create Risk and Uncertainty Reduction Framework


Dear all - this is the close to final version of work package 5 for our Knowledge Alliance proposal. The work package is focused on creating the risk and uncertainty reduction framework for the simulation of innovation diffusion systems in high value manufacturing from ideation to market saturation. If you have explored the materials provided at https://sourceforge.net/projects/entov-hvm/files/Value%20Networks%20Archive/ you will see that we have a rock-solid foundation for completing this work package quickly and with high quality – especially the orientation provided by the knowledge flow assessment and improvement technique towards the backend of the value networks composer workbook.

 

Description

This implementation workpackage creates a risk and uncertainty assessment framework suited for assessing the uncertainty range (maturity levels) for (financial and intellectual capital) value creation of innovation diffusion estimates generated by scenarios defined as most relevant for the Integrated Simulation (Version 3.0) in work package 4. The framework will consist of relevant interrogation questions for assessment, rank relevant risk threats and opportunities, and indicate improvement activities, as well as guidelines for the uncertainty ranges associated with these. The risk and uncertainty reduction framework will support organizations not only in increasing the probability of innovations progressing from ideation through market saturation by identifying and implementing suitable interventions as derived from results generated by the Integrated Simulation (Version 3.0), but also help ensure that the estimated (financial and intellectual capital) value creation occurs. This is the last work package focusing on the attributes of the innovation SYSTEM which ideas flow through and sets the foundation for work package 6 where the focus moves to individual (clusters of) ideas passing through that system. The estimated start date is M13 of the project and the estimated end date is month 24 of the project.

 

Tasks

 

Task #1: Define Uncertainty Quantification Model

Conduct a literature research on forward, inverse and hybrid uncertainty quantification approaches applicable to the diffusion of innovations from ideation through market saturation and define the uncertainty quantification model to be used for assessing the ability of the innovation system(s) to be accelerated.
 

Task #2: Refine Framework Scenarios and Risks

Conduct an analysis regarding influencers of innovation system simulation based on political, economic, social, technological, environmental and legal (policy) factors (PESTLE). Refine the simulation scenarios accordingly and revise outputs of work package 4 accordingly to then determine key risk threats and opportunities of relevance.
 

Task #3: Develop Scoring Scheme
Develop a generic scoring scheme for assessing the risk threat and opportunity probabilities and impacts (includes definition of relevant assessment variables and ranges) as related to the previously identified key risks threats and opportunities of relevance.
 
Task #4: Develop Maturity Assessment Technique
Develop a technique to assess simulation maturity against key risk threats and opportunities. The maturity will be assessed against the impact of the key risk threats and opportunities on the key variables influencing the ability of the innovation system(s) to be accelerated.
 
Task #5: Develop Intervention (Selection) Technique
Develop a set of standard interventions to increase simulation maturity levels and a technique for selecting the more effective and actionable depending on various business conditions (i.e. funding constraints).
 
Task #6: Create Risk Visualization Method
Create an approach for visualizing risk and uncertainty progression (including impact of treatment).
 
Task #7: Create Baseline Integrated Risk and Uncertainty Framework (Version 1.0)
Integrate the uncertainty quantification model, the framework scenarios, the scoring scheme, the maturity assessment technique, the intervention (selection) technique and the risk visualization method to create a baseline risk and uncertainty framework (Version 1.0).
 
Task #8: Validate Framework with Business (Simulations)
Apply the risk and uncertainty framework to the generated business simulations and validate the outputs / insights generated with the business organizations participating in the project.
 
Task #9: Create Integrated Risk and Uncertainty Framework (Version 2.0)
Revise the baseline integrated risk and uncertainty framework (Version 1.0) based on the assessment of the business simulations and relevant feedback received.
 
Task #10: Enable Work Package 6
Develop guidance for workpackage 6 “Create Design Principles for Rapid Diffusion of Innovative Ideas.”
 
Task #11: Create Integrated Risk and Uncertainty Framework (Version 3.0) – Analogy and Expert Opinion
Revise the integrated risk and uncertainty framework (Version 2.0) based on the results of work package 6.
 
Task #12: Create Integrated Risk and Uncertainty Framework (Version 4.0) – Geometric Variables
Revise the integrated risk and uncertainty framework (Version 3.0) based on the results of work package 7.
 
Task #13: Create Integrated Risk and Uncertainty Framework (Version 5.0) – Statistical
Revise the integrated risk and uncertainty framework (Version 4.0) based on the results of work package 8.
 

Results (outputs and outcomes)

 

Result #1: Uncertainty Quantification Model

A model to qualitatively and quantitatively assess the uncertainty of the simulation results. The model will be based on a combination of forward and inverse uncertainty quantification approaches applicable to the diffusion of innovations from ideation through market saturation. The model will measure the ability of the innovation system(s) to be accelerated including definition of the uncertainty range(s) associated with these measurements. The model will be embedded in the Integrated Simulation (Version 3.0) and generate relevant insights for each scenario assessed. The model will initially be fully based on a theoretical inverse uncertainty quantification approach without further input. This will be expanded as the number of available simulations for review grows. After assessment of the business simulations the approach will be refined to include expert opinions and analogies. After completion of work package 6 the model will be refined to include geometric forecasting approaches. After completion of work package 7 the model will be refined to include parametric forecasting approaches. After completion of work package 8 the model will be refined to include statistical forecasting approaches. This output is due in M13. The language of the output is English. The media of the output is table calculation documents, text documents and presentation documents.

 

Result #2: Refined Framework Scenarios and Key Risk Threats and Opportunities

A revision of the framework scenarios defined in work package 4 based on influencers of innovation system simulation arising from political, economic, social, technological, environmental and legal (including policy) factors (PESTLE).  The results of the PESTLE analysis will be used to identify the key risk threats and opportunities related to accelerating the diffusion of innovation(s) systems. The risk threats and opportunities will be phrased as IF / THEN statements, clearly identify the event(s) or condition(s) giving rise to them, the project consequences on the performance of the innovation system(s), and the primary causes leading to these risks arising.  The formulation of the risks must be focused sufficiently to enable a clear impact-probability assessment and a robust selection of an actionable intervention to reduce a risk threat or capitalize on a risk opportunity. At least three risk threats and three risk opportunities are identified for each PESTLE category. This output is due in M15. The language of the output is English. The media of the output is table calculation documents, text documents and presentation documents.

 

Result #3: Scoring Scheme

A scoring scheme for assessing the risk threat and opportunity probabilities and impacts (includes definition of relevant assessment variables and ranges) as related to the previously identified key risks threats and opportunities of relevance. The impact will be described based on the relevant financial and intellectual capital indicators as used / generated by the simulation and related to simulation (in-) dependent variable (ranges of) values as relevant. The probability will be described based on the results of running the simulation enough times in work package 4 to ensure the robustness of statistical evaluation tools (therefore at least 41 times per scenario). The scoring scheme will furthermore provide a simple technique for qualitative evaluation on a 5 range scale (Very High, High, Medium, Low, Very Low) for both impact and probability. The single point values of the simple technique for probability and impact will be the median values of the statistical ranges generated by the simulations. This output is due in M15. The language of the output is English. The media of the output is table calculation documents, text documents and presentation documents.

 

Result #4: Innovation System Simulation Maturity Assessment Technique

A technique to assess innovation simulation maturity against key risk threats and opportunities including relevant assessment questions and weighting methods. The maturity will be assessed against the impact of the key risk threats and opportunities on the key variables influencing the ability of the innovation system(s) to be accelerated. The maturity will be quantified at 9 levels aligned to the concepts of Technical Readiness Level and Cost Estimate Maturity as put forward by NASA, AACE and COCOMO II. The assessment maturity will be generated by a question set aligned to the key risk threats and opportunities. Each question will be phrased to enable assessment against  a 5 range scale (Very High, High, Medium, Low, Very Low) which then sets the foundation for the identification of maturity improvement activities. This output is due in M18. The language of the output is English. The media of the output is table calculation documents, text documents and presentation documents.

 

Result #5: Create Risk Visualization Method

A method for visualizing risk and uncertainty progression (including impact of treatment) including comparison of scenarios and influence of interventions. The approach is intended as a graphical visualization of the uncertainty progression associated with varying scenarios and the impact of interventions selected in order to support deciding on (combinations of) interventions. Design criteria will include an understanding of the problem being addressed through the scenarios and case studies, a definition of relevant data (i.e. quantitative, ordinal, categorical), a selection of the dimensions required to represent the data (i.e. univariate, bivariate, trivariate, multivariate), the structure of the data to be visualized (i.e. linear, temporal, spatial, hierarchical, networked) and interactions required by the various users of the simulation (i.e. static, transformable, manipulable). The method will be embedded in the Integrated Simulation (Version 3.0). This output is due in M18. The language of the output is English. The media of the output is table calculation documents, text documents and presentation documents.

 

Results #6: Intervention (Selection) Technique

A set of generic interventions to increase simulation maturity levels and a technique for selecting the more effective and actionable depending on various business conditions (i.e. funding constraints). The interventions will be based on the maturity questions while the selection technique will be based on sensitivity rankings determined through appropriate co-variance analyses performed as part of the simulation runs similar to the manner in which Monte Carlo simulations will determine sensitivities of line items evaluated against. The interventions will coherently connect back to maturity assessment questions, key risk threats and opportunities, simulation scenarios and verification and validation through relevant simulation configuration and runs. The technique will enable the development and implementation of game playing scenarios. The technique will be embedded in the Integrated Simulation (Version 3.0) and generate relevant insights for each scenario assessed. This output is due in M24. The language of the output is English. The media of the output is table calculation documents, text documents and presentation documents.

 

Result #7: Baseline Integrated Risk and Uncertainty Framework (Version 1.0)

A baseline integrated risk and uncertainty framework (Version 1.0) which combines the uncertainty quantification model, the framework scenarios, the scoring scheme, the maturity assessment technique, the intervention (selection) technique and the risk visualization method. The framework is implemented as an add-on to the Integrated Simulation (Version 3.0). The result includes a technical guide, a user guide and training materials. This output is due in M18. The language of the output is English. The media of the output is table calculation documents, text documents and presentation documents.

 

Result #8: Validation of Framework with Business

The baseline integrated risk and uncertainty framework (Version 1.0) validated against the generated business simulations and with the business organizations participating in the project. The emphasis lies on a “sanity check” of the interventions suggested by the framework for reducing risk and uncertainty related to the simulation outputs in respect to innovation system(s) diffusion of innovation acceleration. The validation with the business organizations is completed through workshops with these organizations where both the Integrated Simulation (Version 3.0) is used as well as the business simulation version specific to the business organization. This output is due in M24. The language of the output is English. The media of the output is table calculation documents, text documents and presentation documents, as well as relevant simulation configurations.

 

Result #9: Integrated Risk and Uncertainty Framework (Version 2.0)

A revision of the baseline integrated risk and uncertainty framework (Version 1.0) based on the assessment of the business simulations and relevant feedback received. This output is due in M24. The language of the output is English. The media of the output is table calculation documents, text documents and presentation documents.

 

Result #10: Enablement of Work Packages #6

Through enablement of the owners, assigned researchers and supporting project members for work package 6 will be placed in a position to use the Integrated Risk and Uncertainty Framework (Version 2.0) as the basis for starting to address the tasks in their work packages. Enablement will involve training relevant project members in depth using training materials developed by work package 5. Enablement will furthermore involve advice and guidance on how best to apply the Integrated Risk and Uncertainty Framework (Version 2.0) within these work packages. Enablement will also contain ongoing support services in respect to operating the Integrated Risk and Uncertainty Framework (Version 2.0) and necessary change management. This output is due before the launch of work package 5. The language of the output is English. The media of the output is a text document.

Result #11: Create Integrated Risk and Uncertainty Framework (Version 3.0) – Analogy and Expert Opinion

A revision of the the Integrated Risk and Uncertainty Framework (Version 2.0) based on the results of work package 6. This includes revision of all supporting materials. This output is due in M26. The language of the output is English. The media of the output is table calculation documents, text documents and presentation documents.

 

Result #12: Create Integrated Risk and Uncertainty Framework (Version 4.0) – Geometric Variables

A revision of the the Integrated Risk and Uncertainty Framework (Version 3.0) based on the results of work package 7. This includes revision of all supporting materials. This output is due in M28. The language of the output is English. The media of the output is table calculation documents, text documents and presentation documents.

 

Result #13: Create Integrated Risk and Uncertainty Framework (Version 5.0) – Statistical

A revision of the the Integrated Risk and Uncertainty Framework (Version 4.0) based on the results of work package 8. This includes revision of all supporting materials. This output is due in M30. The language of the output is English. The media of the output is table calculation documents, text documents and presentation documents.

 

If you are interested in learning more please visit us at www.innovation-web.eu, our LinkedIn Group at https://www.linkedin.com/groups/8779542/, our blog at https://www.innovation-web.eu/entov-hvm-blog, our Researchgate project page at https://www.researchgate.net/project/Open-European-Network-for-Enterprise-Innovation-in-High-Value-Manufacturing-ENTOV-HVM and our Facebook page at: https://www.facebook.com/groups/2014779865300180/. You can also follow us via Twitter: @owschwabe (#innovationweb) and the LinkedIn Group page https://www.linkedin.com/company/entov.

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