Risk Management Decision Making in Service Design

This paper explores the use of risk management techniques to promote the design of resilient services. Success in achieving any benefit from a new service will be directly affected by the resiliency of the supporting service architecture including technical and non-technical domains. The concept of resiliency in services and enterprises is examined. We present a framework to analyze risks and threats to service resiliency, and offer specific guidance to support the development of resilient services and service architectures. The risk assessment framework was created by combining a model of service provider gaps that represent dimensions of service quality with a risk analysis model. The framework includes identification of threats and inhibitors to closing service provider gaps. We maintain that risk in services will remain if service provider gaps are not closed. Service-based business models and economies will succeed only if we view service resiliency as a strategic imperative. Effective service design techniques should be adopted, therefore, to include identification and mapping of the provider gaps and creation of appropriate mitigation strategies. This is accomplished by application of service blueprinting techniques and subsequent analysis of the visible risks. The model that we present facilitates the identification of weaknesses or vulnerabilities in services as well as the impact and likelihood of risk events and enables the planning of remediation activities at the design stage.