Project Risk Management Second edition

Abstract

The projects that motivated initial development of many of the ideas in this book were primarily large engineering projects in the energy sector: large-scale Arctic pipelines in the far north of North America in the mid-1970s, BP’s North Sea projects from the mid-1970s to the early 1980s, and a range of Canadian and US energy projects in the early 1980s. In this period the initial focus was ‘the project’ in engineering and technical terms, although the questions addressed ranged from effective planning and unbiased cost estimation to effective contractual and insurance arrangements and appropriate technical choices in relation to the management of environmental issues and related approval processes. The projects that motivated evolution of these ideas from the mid-1980s to the present (August 2003) involved considerable diversification: defence projects (naval platforms, weapon systems, and information systems), civil information systems, nuclear power station decommissioning, nuclear waste disposal, deep mining, water supply system security, commodity trading (coffee and chocolate), property management, research and development management, civil engineering construction management systems, electric utility long-term and medium-term corporate planning, electric utility generation unit construction and installation or enhancement, commercial aircraft construction, the construction of Channel Tunnel rolling stock, and the risk and benefit management of a major branch banking information systems project, to mention a few that are used directly or indirectly as examples in this book. In this period the focus was on what aspects of project risk management are portable, in the sense that they apply to garden sheds and nuclear power stations, and in what way do ideas have to be tailored to the circumstances, in the sense that garden sheds and nuclear power stations require some clear differences in approach. The reader may be concerned with projects with features well beyond our experience, but we believe that most of what we have to say is still directly relevant, provided the projects of concern involve enough uncertainty to make formal consideration of that uncertainty and associated risk worthwhile. Even if this condition is not satisfied, informal or intuitive project risk management will benefit indirectly from some of the insights offered