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Probability of events: a theoretical application of the VRPD function to organizational processes

In a previous Continuity Central article, Alejandro Aristizábal Correa looked at ways to calculate the probability of events and introduced the Variable-Rate Probability Distribution (VRPD) theorem. In this article he shows how the VRPD concept can be used in practice by business continuity managers.

Introduction

Complexity, when it is fragmented, requires that our brains reconstruct the scattered pieces over and over. Such systemic thinking pushes us to find a way to make the pieces fit together. Although this is not a consequence of a natural process, it is a good lesson from nature itself to seek consistency and interdependency.

When it comes to a business impact analysis (BIA), the impacts may be analyzed from different perspectives. Imagine that we are in the middle of a dense forest surrounded by small, mid-size, and high hills. Depending on our physical altitude with respect to the hills’ heights we will have different versions of the landscape. In business, the vision of the organizational leaders is taken as the objective perspective; after all, it is their role to define corporate vision.

One of the challenges of a business continuity consultant when starting a risk analysis is to capture the organizational risk perspective, e.g., the way the leaders perceive the threats and goals, and specifically, which of them is at the top of the list and which are considered as part of the rest of the pie. This is such a complex matter that it seems like we ought to have a psychologist next to us during the BIA and risk analysis interviews. And although our comprehension of the leaders’ risk perspective is limited, the product/service priorities approved by the executive committee is an important, yet incomplete, impression of the corporate vision, as we will see.

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