Enterprise Risk Management: Master Complex Projects

Project risks can have negative impacts on project objectives such as delays, cost overruns, decrease in quality and security aspects, then we can observe serious project failures. Complex projects are affected by numerous risks and opportunities because of their complex organizational plan with many stakeholders, complex planning with a long-life cycle, complex resource management, contractual complexities, technical issues, and environmental factors. This type of projects may also present strategic importance for the project stakeholders.

Risk management aims to identify possible causes of threats and opportunities, assess them qualitatively and quantitatively and propose action plans for risks deemed critical in order to decrease the undesirable effects on project objectives. For complex projects, risk management is a difficult task, depending on the project’s characteristics and environmental conditions, and the feedback on similar risks can be inadequate. It is essential to identify and analyze the project risks and opportunities throughout the project life cycle and develop risk response planning to decrease the adverse risk effects. However, traditional methods are rather limited for managing the risks of complex and strategic projects.

In this training, a formalized and systematic Risk Management Process is proposed for complex and strategic projects throughout the project life cycle. This process aims to identify systematically the risks and opportunities, assess the risk impacts in terms of cost, delay, quality, and safety, determine the critical risks and develop action plans in order to mitigate, eliminate or transfer the negative risk impacts. The process proposes an agile risk management approach in parallel with the project management, through the project life cycle, and adapted to the evolving nature of the project. The risk assessment results are integrated into the project simulation with cost, time, quality and safety risk impacts. An objective and reliable risk identification and assessment method is provided with multi-dimensional project analysis, associated with the project planning, organizational structure, resources, and environmental factors. The risk identification and assessment data are updated with the project progress in a dynamic approach.

The model is designed and developed based on several case studies of complex projects, in partnership with the project practitioners to favor its use in real operation conditions and to ensure its efficiency by integrating the different perspectives of the project stakeholders. Besides, the viewpoints of a wide range of experts from all the major players in complex and strategic projects have also been considered for an effective risk management method. A user-friendly prototype interface has been developed to apply the process for real projects. The process is primarily developed for complex construction projects, but the model can be adapted to a specific type of complex and strategic project in different sectors. How it works in practice is illustrated through a case study of a Public-Private-Partnership (PPP) project in France.