Level:
Intermediate
TCM Section(s)
7.6. Risk Management
8.1. Project Control Plan Implementation
Venue: 2024 AACE International Conference & Expo
Abstract: Much has been written about best practice project risk analysis. But what happens after the risk analysis concludes that the pre-mitigated project is not going to be successful? Often, the risk analyst is asked to improve the project’s funding prospects by assessing the project using post-mitigated risks.Strategic and tactical improvements in risk management are necessary to improve mitigation outcomes.
Risks can be prioritized as an output of the quantitative risk analysis. Then, risk mitigation workshops can be held to see if the high-priority risks can be mitigated effectively and economically by adopting new mitigation actions focused on the specific risks. But do the mitigations developed truly have a chance of changing the project’s prospects?
To be meaningful, a risk mitigation action must be new, not a continuation of a previous or normal practice. “Continuing to hold weekly meetings with subcontractors” does not qualify. Mitigations for the high-priority risks should be precise and tactical, with an assessment of required support such as funding or hiring. It should cover what will change and specifically how the change will be implemented.
Alignment should be reached on the mitigations between all main stakeholders - owner, contractors, subcontractors, commissioning agents, and regulators. This paper presents a 6-level scale and associated concepts that can be used to evaluate the quality and potential effectiveness of proposed mitigations. The focus is on relevance to the risks, practicality of the action within the context of the project, clarity of definition of actions, and stakeholder commitment to the resulting plan.
The Whitehead-Hulett Mitigation Assessment Score (MAS)TM is introduced and its use is described with actual project examples. To warrant any potential credit (represented as a lower probability of occurring, less impact if it were to occur, or both) given in post-mitigated quantitative modeling, the mitigation should have a MAS of 3 or higher, with 4 or 5 being preferred. Achieving those MAS values indicates that the mitigations are thought through well enough to be taken seriously. The MAS scale also directs project teams on how to improve their mitigation strategies.
This paper introduces and describes:
TCM Section(s)
7.6. Risk Management
8.1. Project Control Plan Implementation
Venue: 2024 AACE International Conference & Expo
Abstract: Much has been written about best practice project risk analysis. But what happens after the risk analysis concludes that the pre-mitigated project is not going to be successful? Often, the risk analyst is asked to improve the project’s funding prospects by assessing the project using post-mitigated risks.Strategic and tactical improvements in risk management are necessary to improve mitigation outcomes.
Risks can be prioritized as an output of the quantitative risk analysis. Then, risk mitigation workshops can be held to see if the high-priority risks can be mitigated effectively and economically by adopting new mitigation actions focused on the specific risks. But do the mitigations developed truly have a chance of changing the project’s prospects?
To be meaningful, a risk mitigation action must be new, not a continuation of a previous or normal practice. “Continuing to hold weekly meetings with subcontractors” does not qualify. Mitigations for the high-priority risks should be precise and tactical, with an assessment of required support such as funding or hiring. It should cover what will change and specifically how the change will be implemented.
Alignment should be reached on the mitigations between all main stakeholders - owner, contractors, subcontractors, commissioning agents, and regulators. This paper presents a 6-level scale and associated concepts that can be used to evaluate the quality and potential effectiveness of proposed mitigations. The focus is on relevance to the risks, practicality of the action within the context of the project, clarity of definition of actions, and stakeholder commitment to the resulting plan.
The Whitehead-Hulett Mitigation Assessment Score (MAS)TM is introduced and its use is described with actual project examples. To warrant any potential credit (represented as a lower probability of occurring, less impact if it were to occur, or both) given in post-mitigated quantitative modeling, the mitigation should have a MAS of 3 or higher, with 4 or 5 being preferred. Achieving those MAS values indicates that the mitigations are thought through well enough to be taken seriously. The MAS scale also directs project teams on how to improve their mitigation strategies.
This paper introduces and describes:
- Importance of risk description metalanguage to developing effective risk mitigations.
- Importance of mitigation element maturity to create real reductions in risk profile of the project.
- Proposed 6-level scale to assess risk mitigation maturity.
- Recommendation to avoid using full set of post-mitigation analysis estimates to set contingency values.
- Recommendation to use alternate approach to assessing post-mitigation only after MAS of threshold value or higher is achieved, with analysis being iterated as solutions are developed.
- Reasoning for using alternate approach to accepting post-mitigation estimates only after sufficient maturity is reached.