Risks

Companies that do not utilize probablilistic techniques can expect a number of negative outcomes. 

• Inconsistent decision making results in irregular financial returns, and leads to shareholder dissatisfaction.
  
• Deterministic thinking obscures key risks associated with a venture, leading to poor business choices.
  
• The lack of systematic value of information assessment leads to hundreds of millions in chronic overspending for seismic data.
  
• An incomplete assessment of critical factors in a bidding situation results in substantial over-bidding or under-bidding.
  
• The firm is over-exposed to certain types of risk while missing out on opportunities that could help balance their portfolio.
  
• The inability to do simulation and sensitivity analysis leaves a firm with no understanding of a venture's possible outcome, or of the key factors driving the deal. 
  
• A firm's inability to accommodate multiple objectives leaves it focused on priorities that may not actually be relevant.
  
• The firm never knows how much risk to take in a joint venture.
  
• The company has no way to assess or track its risk-taking or its risk tolerance.

Opportunities

By making probabilistic analysis a standard part of their decision making, companies can expect to benefit in a number of ways.

• The decision makers within a firm develop a better understanding and communication about risk across all divisions.
  
• Advanced decision-making techniques help the firm to optimize strategies that minimize risk and increase profit on all ventures.
  
• Expensive seismic information is purchased at the appropriate value. 
  
• A balanced portfolio generates consistent profits and keeps the shareholders happy. 
  
• The company regularly wins bids without leaving any significant money on the table. 
  
• Through simulation and sensitivity analysis, the firm is able to identify a range of possible outcomes and where to focus energy to mitigate risk.
  
• Using multiple objective analysis, the company can understand complicated opportunites and where to make the appropriate trade-offs.