TOWARDS OPERATIONAL RISK-AWARE INFORMATION SYSTEMS: A CRITICAL REALIST PERSPECTIVE

Abstract

Following calls to enhance risk-sensitivity of second generation Operational Risk-Aware Information Systems (ORISs), this paper aims to address the lack of ontological/epistemological grounding for the concept of Operational Risk (OR). Herein, OR is regarded both as a property of a real system and as a representational phenomenon forming part of the core of ORIS in line with Weber’s (2003) view of the core of IS. The paper explores how the ontological/epistemological position of the Critical Realist philosophy of science assists in the Requirements Definition of ORISs by providing an ontology-driven representation of the heterogeneous nature of OR. The retroductive mode of logical inference enabled by Critical Realism supports the discovery of OR causal mechanisms when the historical data about operational loss events is limited. The ontological/epistemological position suggested in the paper contributes to better understanding and representation of OR, informs OR assessment in conditions of a constantly changing socio-economical environment, and so assists in the Requirements Definition of ORISs