Acquisition Portfolio Risk Management with
Active Risk Manager (ARM)
US Air Force Materiel Command (AFMC) develops, acquires and sustains the resources the US Air Force needs to remain the leading military force in the world. It is responsible for over 50% of the Air Force’s budget. AFMC has responsibility for everything from the most complex fighter aircraft to uniforms. Its four core mission areas are:
- The science and technology to enable new and better military capabilities
- Acquisition management to deliver capabilities
- Test and evaluation to validate and improve capabilities
- Sustainment of Air Force capabilities
To ensure correct funding and resource investment decisions are made, AFMC needs to know the risk profile of each USAF program. Decisions can then be made whether additional funding is required to mitigate risk in one program while funds in another can be released as successful risk mitigation strategies are deployed.
AFMC selected Active Risk Manager (ARM) to monitor the risks of current and future programs, and for the rationalization and allocation of resource across the whole program portfolio. The Deputy Assistant Secretary for Acquisition Integration sponsored the evaluation and subsequent purchase of ARM. USAF awarded the first contract to Active Risk, valued at over US $1 million in 2008.
USAF programs have been encouraged to bolster risk management activities across the acquisition community by senior leadership. ARM is used to support this process and through tight integration with USAF’s existing management systems and reporting tools.
The ARM project office continues to train staff members, both military and contractors, at the majority of bases around the USA in the use of ARM and the Life Cycle Risk Management approach. This ensures program managers are rigorous in their approach to risk management. The use of ARM better enables the acquisition programs and projects that equip the Air Force to deliver on time, on budget and to high technical performance, by the identification and reduction of risks.
When AFMC implemented ARM it set ambitious goals for the improvement of speed of communication of key risks so as to reduce the probability/frequency and scale of impact of those risks.
AFMC aims included:
- Encouraging a more in-depth risk management process and communication of risk at all levels to allow for the delivery of consistent processes to reduce cost
- Ensuring that senior management had transparency of the real risks and opportunities across programs so that funding can be assigned/moved and resources allocated to the right programs based on real up-to-date and relevant information
- Capturing risk knowledge not just for today’s missions but also for the next generation
ARM delivered on these aims and provides AFMC leadership with faster access to realtime, authoritative risk information across a growing portfolio of programs from a single web-based system.