The Owner's Role in Project Risk Management (2005) / Chapter Skim
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2 Owners’ Roles and Responsibilities
2 Owners’ Roles and Responsibilities
Pages 8-15
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From page 8... ...
(Of course, the owner may not have a completely risk-free strategy, because not executing the project may entail risks to the successful implementation of the owner's mission or business plan.) The owner has the ultimate responsibility for identifying, analyzing, mitigating, and controlling project risks, including acceptance of the project risks, or modification, or termination of the project -- all of which are project risk management activities.
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From page 9... ...
These objections turned out to be false, and the value of safety programs is now unquestioned. Similarly, project risk management can be effectively carried out without stopping projects dead in their tracks or even slowing them down.
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From page 10... ...
Contractors and Consultants In an environment where ongoing program and project management is delegated to contractors, the owner nonetheless retains the responsibility to ensure that the contractors employ qualified personnel and apply appropriate risk management practices. Because the owner maintains the burden of many irreducible project risks, it is essential that the owner's representatives take an active role in all phases of risk management, including knowledgeable oversight and review of tasks undertaken by contractors and consultants.
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From page 11... ...
This approach enables the owner to take advantage of the expertise of individuals who regularly deal with these types of problems and can help ensure that risk management concerns are fully addressed in the development of acquisition plans and work plans. Reviewers Objective and impartial external consultants and advisors can provide essential input on risk management.
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From page 12... ...
Knowledgeable owners ensure that both their own personnel and their contractors are using the most appropriate risk management methods and that risk analysis is neither excessive nor too little. Owners with ongoing programs of multiple projects especially need to develop their own risk management expertise and excellence and should not expect contractors to look out for the owner's risks unless they are specifically and properly directed to do so.
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From page 13... ...
The development of effective and efficient project-specific risk management strategies requires the use of risk assessment, a decision technique that systematically incorporates consideration of adverse events, event probabilities, event consequences, and vulnerabilities. Uncertainty, as it relates to project performance, cost, quality, and duration, comes from a lack of knowledge about the future.
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From page 14... ...
Therefore, even successful project managers need to know about risk management methodology in order to support the self-confidence they need to control risks. In summary, the empirical, managerial approach to risk is as follows: · Break down the total risk into its components.
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From page 15... ...
Experience shows that many projects have not been successful in containing risks because project managers used inappropriate methods and did not see the need to apply risk management methodologies. Learning risk management on the job can be an educational experience that is very expensive for the project's owner.
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