Methods and apparatus for assessing operational process quality and risk

• US 20080015920A1
• Filed: 07/14/2006
• Published: 01/17/2008
• Est. Priority Date: 07/14/2006
• Status: Active Grant

• Current Assignee: Fred E. Sommers, Robert A. Fawls
• Original Assignee: Fred E. Sommers, Robert A. Fawls
• Inventors: Sommers, Fred E., Fawls, Robert A.
• Granted Patent: US 7,571,109 B2
• Time in Patent Office: Days
• US Class Current: 705/8
• CPC Class Codes: G06Q 10/06 Resources, workflows, human or project management; Enterprise or organisation planning; Enterprise or organisation modelling
• CPC Class Codes: G06Q 10/0635 Risk analysis of enterprise or organisation activities
• CPC Class Codes: G06Q 10/06395 Quality analysis or management
• CPC Class Codes: G06Q 50/18 Legal services

Abstract

Methods and apparatus for assessing operational process quality and risk of an entity or a group of entities. The present invention enables a user to effectively compare one or more events, representing what actually happened, with a reference, which represents ideal performance in terms of operational process quality and risk, and express the corresponding results in quantitative terms. The present invention is capable of presenting results in a form and with sufficient rapidity that a human decision-maker is able to timely observe conditions which represent unacceptable quality or excessive risk and respond appropriately.

Claims

1. A method for assessing operational process quality or risk comprising the steps of:

identifying at least one metric which has substantial correlation to operational process quality or risk for a preselected operational process;

obtaining data from one or more sources which represent at least one actual initial condition for at least one entity;

observing, for a preselected period of time, events which relate to said at least one entity;

providing said data and events as inputs to said metric; and

processing said metric to generate results which represent a comparison of actual performance of said operational process with ideal performance in terms of operational process quality or risk; and

expressing said comparison in quantitative terms such that a human is able to timely observe conditions which represent unacceptable quality or excessive risk.

4. The method as in claim 1, 2 or 3 wherein said quantitative terms comprises basis points.

5. The method as in claim 1, 2 or 3 wherein an event is represented by a combination of an event identifier, an entity identifier, a financial instrument identifier, one or more expected conditions, one or more actual conditions, a value and a category.

6. The method as in claim 1, 2 or 3 wherein said metric includes one or more factors or dimensions each of which is represented by a combination of an identifier and one or more values which correspond, respectively to a value of the factor or dimension at different points in time.

8. The method as in claim 1, 2 or 3 wherein said method is used to assess the operational process quality or risk associated with failing to comply with regulatory, contractual or other expectations attached to transactions involving one or more financial instruments.

9. The method as in claim 1, 2 or 3 wherein said method is used to compare performances, in terms of operational risk or quality, of two or more business organizations.

10. The method as in claim 1, 2 or 3 wherein said method is used to measure and attribute operations performance.

11. The method as in claim 1, 2 or 3 wherein said method is used to identify and prioritize operational and system improvement opportunities.

12. The method as in claim 1, 2 or 3 wherein said method is used to calculate operating risk capital allocations or reserves to establish premiums or benchmarks for insurance underwriting purposes.

13. The method as in claim 1, 2 or 3 wherein said method is used to distribute performance-based compensation.

2. A method for assessing operational process quality or risk comprising the steps of:

selecting a metric with respect to an operational process of interest;

selecting event data which represent actual performance of the operational process of interest during a time period of interest;

applying one or more process measures and rules, which represent ideal performance of the operational process of interest in terms of quality or risk, to the selected event data to produce intermediate results; and

providing the intermediate results to the selected metric which calculates an operational value at risk in quantitative terms.

7. The method as in claim 2 or 3 wherein said rule is represented by a combination of a rule identifier, an entity identifier, an instrument identifier, a rule type and one or more conditions.

3. A method for assessing operation process quality or risk comprising the steps of:

providing a data store which contains data pertaining to one or more events which represent actual performance of an operational process of interest;

providing a process measures and rules store which contains at least one process measure and at least one rule pertaining to said operational process of interest;

applying said at least one process measure and at least one rule to selected data from said data store to generate intermediate results;

providing a metric store which contains at least one metric;

providing said intermediate results to a selected metric from said metric store which calculates an operational value at risk; and

expressing said calculated operational value at risk in quantitative terms.

14. A system for assessing operational process quality or risk comprising:

a data store for data which is related to at least one entity, at least one financial instrument and at least one event;

a process measures and rules store, coupled in communicating relationship with said data store, for applying at least one process measure and at least one rule to selected data of interest in said data store to produce intermediate results;

a metrics store, coupled in communicating relationship with said process measures and rules store, for receiving said intermediate results and using a metric to calculate therefrom an operational value at risk expressed in quantitative terms; and

a user interface, coupled in communicating relationship with said metrics store, for enabling a user to select one or more metrics of interest and to display said calculated operational value at risk.

15. A system for assessing operational process quality or risk comprising:

a first store containing at least one metric pertaining to an operational process of interest;

a second store containing event data which represent actual performance of the operational process of interest during a time period of interest;

a third store, coupled in communicating relationship with said second store, containing one or more process measures and rules which represent ideal performance of the operational process of interest in terms of quality or risk; and

a processor for applying said one or more process measures and rules to said selected event data to generate intermediate results and applying said at least one metric to said intermediate results to calculate an operational value at risk.

16. A system for assessing operational process quality or risk comprising:

a first store containing at least one metric which has substantial correlation to operational process quality or risk for a preselected operational process;

a second store, coupled in communicating relationship with said first store, containing event data received from one or more sources which represent actual performance of said preselected operational process for at least one entity;

a processor processing said metric using selected event data from said second store to generate results which represent a comparison of actual performance of said operational process with ideal performance in terms of operational process quality or risk; and

a user interface for expressing said comparison in quantitative terms such that a human is able to timely observe conditions which represent unacceptable quality or excessive risk.