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Why risk efficiency is a key aspect of best practice projects

Why risk efficiency is a key aspect of best practice projects
Why risk efficiency is a key aspect of best practice projects
This paper explains what ‘risk efficiency' means, why it is a key part of best practice project management, and why it may not be delivered by common practice as defined by some guidelines. This paper also explains how risk efficiency can be addressed operationally using comparative cumulative probability distributions (S-curves). Further, this paper explains why risk efficiency provides a foundation for a convincing business case for:
• formal project risk management processes designed for corporate needs, • embracing the management of opportunities as well as threats, • measuring threats and opportunities to assist decision making, • developing a more effective risk taking culture, • taking more risk for more reward.
The argument uses linked examples from four successful cases: the first use of a designed project risk management process by BP for offshore North Sea oil and gas projects, the first use of a designed process by National Power for combined cycle gas powered electricity generation, a culture change programme for IBM UK concerned with taking more risk to increase the rewards, and a due diligence assessment of project risk management for a railway infrastructure project. The concepts and tools described are relevant to any industry sector for projects of any size.
best practice, risk efficiency, project risk management, opportunity management, culture change
0263-7863
619-632
Chapman, Chris
a4f4805b-b67d-4c4c-856b-78e01a2c89a0
Ward, Stephen
ac1bf683-4186-44e7-9f5e-4193ee4d03cd
Chapman, Chris
a4f4805b-b67d-4c4c-856b-78e01a2c89a0
Ward, Stephen
ac1bf683-4186-44e7-9f5e-4193ee4d03cd

Chapman, Chris and Ward, Stephen (2004) Why risk efficiency is a key aspect of best practice projects. International Journal of Project Management, 22 (8), 619-632. (doi:10.1016/j.ijproman.2004.05.001).

Record type: Article

Abstract

This paper explains what ‘risk efficiency' means, why it is a key part of best practice project management, and why it may not be delivered by common practice as defined by some guidelines. This paper also explains how risk efficiency can be addressed operationally using comparative cumulative probability distributions (S-curves). Further, this paper explains why risk efficiency provides a foundation for a convincing business case for:
• formal project risk management processes designed for corporate needs, • embracing the management of opportunities as well as threats, • measuring threats and opportunities to assist decision making, • developing a more effective risk taking culture, • taking more risk for more reward.
The argument uses linked examples from four successful cases: the first use of a designed project risk management process by BP for offshore North Sea oil and gas projects, the first use of a designed process by National Power for combined cycle gas powered electricity generation, a culture change programme for IBM UK concerned with taking more risk to increase the rewards, and a due diligence assessment of project risk management for a railway infrastructure project. The concepts and tools described are relevant to any industry sector for projects of any size.

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More information

Published date: 2004
Keywords: best practice, risk efficiency, project risk management, opportunity management, culture change

Identifiers

Local EPrints ID: 36520
URI: http://eprints.soton.ac.uk/id/eprint/36520
ISSN: 0263-7863
PURE UUID: 32fd6268-2974-4752-baf5-e250e8232db4

Catalogue record

Date deposited: 23 May 2006
Last modified: 15 Jul 2019 19:04

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