Calculating Criticality

Criticality is a risk assessment process. The overall risk is determined by the probability of failure and the consequence of failure. The assets that have the greatest probability of failure and the greatest consequences due to failure will be the assets that are the highest risk and therefore the most critical. The assets that have low likelihood of failure and low consequences if there is a failure will be the least critical assets.  

To calculate the criticality score for a given asset, multiply its probability of failure rating by its consequence of failure rating. 

The criticality of assets changes over time. It is necessary to periodically review the criticality scores of assets and adjust to account for changing circumstances and asset decay. The following are examples of what could influence a change in your assets’ criticality score. 

• • • Community characteristics change 
    • Service needs change 
    • Financial factors increase (e.g., cost of repair or replacement) 
    • Environmental regulations change or become more stringent 
    • Impacts from increased weather events 
    • Increased urbanization 

It is advised to review the criticality of all assets annually, but if a complete review and revision is not practical given available resources, staff should focus on reassessing the criticality of assets that are known to have experienced some type of significant change or event. For example, if an asset that was critical primarily due to its probability of failure is replaced with a new asset, the criticality score for the replacement asset will be lower and records should be updated to reflect both the new asset and its lower probability of failure. Another example is installing a new asset to add redundancy to the system. The consequence rating associated with related assets should be lowered because adding redundancy reduces the consequences of those assets failing. Any changes like these should prompt an update to the criticality scores of impacted assets. 

Once the criticality score is calculated for all assets, system staff should evaluate the data and create a prioritization framework or a risk response plan. A risk response plan delineates levels of risk tolerance and identifies the risk mitigation options that are most effective and suitable for the system. A complete risk plan should: 

• • • specify the type of management action necessary 
    • provide a timeline for the action 
    • identify the personnel within the organization who are responsible for the risk mitigation 
    • describe other entities involved in the action (e.g., contractors, city planners/engineers, etc.) 

Special attention should be given to areas in the system where multiple critical assets exist at the same location. The impacts of one critical asset failing in those areas will have heightened impact due to the proximity to other critical assets, including those of another asset type. GIS is a useful tool to spatially identify high-concentration locations of critical assets, and this can then be factored into the prioritization framework for each asset type. Visualizing criticality scores with a matrix is also a useful tool, especially when discussing the criticality of assets with stakeholders who were not part of the process. Additionally, systems can pick a threshold criticality score which they can use to define which assets are eligible for funding for inspection or repair or replacement projects. When selecting a threshold score, staff should pay close attention to the availability of condition data and the distribution of risks. If additional data becomes available, especially condition data, these risk score thresholds should be re-evaluated. The criticality score, along with the asset’s condition rating and estimate of useful life, should be used to prioritize assets for repair, replacement, or upgrade. The main point is that there is not a “right” response for each asset. Each case must be considered individually to determine the correct response for the given situation. 

Risk mitigation options can be more complex and harder to implement for green assets because they are often owned, managed or accessed by third parties. Gray assets such as pipes are owned and managed by a utility, and they have direct control over the mitigation options (i.e., repair, replacement, rehabilitation etc.). Green assets, such as a green roof or a forest, are likely not owned by the system and may involve several outside entities to implement any mitigation strategies. Partnerships with external parties who own, manage or have access to green assets are vital to ensure risk mitigation plans are effective and can move forward smoothly. 

PoFProbability of Failure and CoFConsequence of Failure of steel water pipes – Frank Roth, Sr. Policy Manager, Chair of AM Steering Committee, Albuquerque Bernalillo County Water Utility Authority, Albuquerque, NM