In our first blog post on the topic of Executive Risk Awareness, we highlighted how the 2010 BP Deepwater Horizon oil rig explosion in the Gulf of Mexico was a case of risk run amok. Furthermore, the breakdown in the lines of communication for projects risks and problems resulted in a situation where lives were lost and a project in disaster. The ability to provide accurate data on project risks in real-time to decision makers is of critical importance in the economic climate today's projects must contend with.
Following the 2010 BP Deepwater Horizon oil rig explosion in the Gulf of Mexico, a U.S. investigation commission credited the disaster to project management failures that crippled “the ability of individuals involved to identify the risks they faced and to properly evaluate, communicate, and address them.” This scenario is an all too common problem in today’s project management environment.
According to a 2014 study on project risk management trends, only 30% of projects are being delivered on budget and only 15% of projects are being delivered on time. Respondents believe decision making needs improvement, with almost half classifying this function as poor to moderate. In those same studies, 92% of recently surveyed CEOs agreed that information about risk is important or critical to long-term success. Only 23% believe they have comprehensive information about risks to their business. Project complexity is rising and the accompanying risks are rising right along with it. This reality limits an organization’s ability to deliver projects successfully.
In the early 2000's, schedule risk analysis became a mandate for organizations running complex schedules. Project Managers had to demonstrate that they had considered risk and contingencies in the project planning process to ensure more predictable results. However, the existing tools were limited: either too complex that they required an expert to operate them, or too simple that customers weren't sure they could trust the results. And none of them were built for the enterprise.