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Watershed Planning within a Quantitative Scenario Analysis Framework
12:44

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Published on: July 24, 2016

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Assessing interdependent operational, tactical and strategic risks for improved utility master plans.

Ana Luís1, Fiona Lickorish2, Simon Pollard2

  • 1EPAL, SA, Empresa Portuguesa das Águas Livres, Av. Liberdade, 24, 1250-144 Lisboa, Portugal.

Water Research
|March 7, 2015
PubMed
Summary

This study introduces a novel bottom-up strategic risk analysis for water utilities, linking operational risks to corporate objectives for improved long-term planning and business sustainability.

Keywords:
Cognitive mappingInterdependent risksMaster planningStrategic risk analysis

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Watershed Planning within a Quantitative Scenario Analysis Framework
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Published on: July 24, 2016

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Area of Science:

  • Environmental Science
  • Risk Management
  • Utility Operations

Background:

  • Strategic risk management in water utilities often lacks systemic assessment and long-term perspective.
  • Operational risk tools are established, but their connection to strategic decision-making is underdeveloped.

Purpose of the Study:

  • To develop and validate a baseline strategic risk analysis for water utilities.
  • To establish deep connections between operational and strategic risks.
  • To inform utility master planning and enhance board-level risk discussions.

Main Methods:

  • Action-oriented research methodology.
  • Semi-structured interviews with water utility risk experts.
  • Systemic analysis of operational risks ('bottom-up' approach).

Main Results:

  • Established deep connections between operational and strategic risks, surpassing existing sector approaches.
  • Developed accessible presentational formats (influence diagrams, risk heat-maps) for board-level discussions.
  • Characterized a baseline set of strategic risks crucial for utility master planning.

Conclusions:

  • The developed approach provides a systemic, long-term perspective for strategic risk management in water utilities.
  • Linking operational risks to corporate objectives (sustainability, profitability, water quality/quantity, reputation) enhances strategic decision-making.
  • This framework supports informed master planning and improved utility governance.