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Performing Risk Identification On Large-Scale Engineering Projects

Service News Wednesday, May 27, 2015: EngNet - Engineering Network

Throughout any project, risks are inherent. Even if you’re not overtly and consciously taking them in order to achieve better results or to get the project completed for less money and in a quicker time period, they will always be present in whichever processes you’re implementing to get the project completed.

The larger and more important the project is, the more its potential risks are thrown into sharp relief. That’s why it’s crucial to perform extensive risk identification on all projects. One of the most difficult types of project to perform risk identification is a large-scale engineering project, because there are so many variables involved that things rarely turn out the way they’re expected to.

What is risk identification?

Risk identification is the process by which the risks from the beginning to the end of the project are identified. They are classed as known risks and unknown risks – known risks can be anticipated and planned for, and unknown risks can’t. If a risk cannot be anticipated then it has the potential to severely affect the project in terms of its overall budget and the deadline it is expected to be completed by.

For instance, a known risk on a large engineering project might be a public holiday falling in the middle of the schedule which means that no work will take place over that time period. Adjustments can be made so no time or work is lost because of it, whether that means speeding things up or enforcing overtime (which will be unpopular but undoubtedly effective). This will have been in the calendar since the beginning of planning and thus can be worked around.

An unknown risk on a large engineering project might be a freak tornado that appears out of nowhere and rips up all of the existing work, meaning that everything has to begin again from scratch. As, effectively, “an act of God”, it can’t be anticipated and all project managers can do is pick up the pieces and begin again if and when time and budget allows them to.

Some of the categories that individual risks can be put into include: Technical, Cost, Schedule, Client, Contractual, Environmental and People.

Why you should care

Unless they’re planned for and dealt with, risks have the potential to take your project completely off-course. It would be irresponsible to ignore them as a project planner or manager, especially because there will be more potential risks the bigger the project is – on a large-scale engineering project, there may even be too many to accurately count.

How to perform risk identification on large-scale engineering projects

Large-scale engineering projects will probably have a risk identification team, rather than just one person, as there will be so many different aspects of the project to assess. Because the project may well depend on the weather and other uncontrollable factors, the need to perform comprehensive risk assessment on the elements that can be controlled is high.

Once a risk has been identified, there are three courses of action that can be taken:

·         Avoidance – eliminating the risk by eliminating the identified cause of it (e.g. the risk of losing materials to theft can be eliminated by transporting unused materials offsite every night).

·         Mitigation – taking measures to lessen the probability of the risk occurring (e.g. the risk of losing materials to theft can be lessened by incorporating security guards and other protective measures).

·         Acceptance (with contingency plan) – accepting that there is nothing that can be done to avoid the risk, but coming up with a plan to lessen its impact if it should occur (e.g. the risk of losing materials to theft can be accepted but suppliers should be warned that stock might be required at very short notice if the materials are stolen).

The action you choose to take will depend on the specific risk – you might even decide to completely ignore it, hoping that it doesn’t happen and that it won’t have a major impact if it does, though this would be an inadvisable course of action to take even on the risks that seem the smallest.

In addition, you should:

·         Leave nothing to chance on the projects that have been mapped out to large budgets and tight deadlines – any delay could be extremely costly so every avenue and process should be combed for known risks.

·         Take advice from engineers and technical specialists who will be able to give you a more rounded and knowledgeable assessment of risks where necessary and relevant.

Risk identification on large-scale engineering projects shares many similarities with risk identification on projects of other sizes and types, but the budgets and technical issues involved make it necessary to take extra care and utilise the knowledge of others to do the most thorough job possible.

 

Contributed by:

Darren Ley is an L&D Consultant at Thales Learning & Development. He began his career in research and development and project management, eventually making the natural switch to training and development with Thales, for whom he delivers accredited and non-accredited project management training.

Darren is a regular contributor to Enhance – The Magazine for Learning and Development.