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Risk management to the rescue

July 30, 2021 |   | 
4 minutes read
Safran Software Solutions

Safran Software Solutions

Albert ‘Mac’ McMillan project management of 40 years’ experience. His Q&A covers how failing project can be turned around and effective risk management.


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1. What was going wrong and why were you appointed?

The client had decided to bring two mega projects together, one offshore and the other onshore. On paper, the two projects linked and combining them seemed a sensible plan. Experienced project teams who had worked with each other previously were chosen, and there was a general feeling of confidence that all would go to plan.

However, neither team was looking to the future, and they failed to see the risks heading their way. Unfortunately, after 20 months of setbacks, the project was looking at a 63 percent cost and schedule overrun.

The blame game had started, and I was brought in by senior management to consider what was going wrong and why, so that solutions could be found.

2. What did the situational appraisal tell you?

There was a great deal of talking happening, but a lack of effective communication. Unless you’re sharing the right information with the right people, it is difficult to make progress.
A culture of poor decision-making had developed on the project and the blame game wasn’t helping to address this.

3. Did you find any other specific problems?

As well as ineffective communication, there was too much reliance on the ‘three-point estimate’. This rather rudimentary method of analysing cost and schedule risk, which involves putting together an optimistic, pessimistic and realistic outcome, is considered outdated. The project manager needs as many views as possible to gain an accurate understanding of the real risk drivers. This over reliance on the three-point estimate was making it difficult to see the wider picture.

There was also a considerable strain on resources due to the scale of the project, and this was increasing pressure on time and cost constraints.

4. How important was risk analysis in facilitating the project’s turnaround?

Carrying out a more in-depth Cost and Schedule Risk Analysis (CSRA) is vital for putting projects on the right track, but many businesses still treat it as a tick-box exercise, rather than making it a core part of their project strategy.

Using Safran Risk allows the more actionable “Risk Driver Method” to be applied. This shows the time and cost impact of each risk factor so prioritised mitigation strategies can be cost-justified. Identifying areas of risk and allocating contingency to these helped to prevent the snowball effect that sometimes occurs without robust risk analysis.

This forward-looking approach also allowed the client to focus their resources on mitigating priority risks, saving them time and money in the long run.

“Senior stakeholders tend to have a short attention span, but this can be overcome by running workshops that demonstrate the value of CSRA and create a decision-making opportunity.”

- Albert 'Mac' McMillan

5. Why is it so important to conduct a detailed risk analysis?

The granularity of the data you work with will determine the quality of the analytical insights. Safran Risk can process a large volume of risk data related to multiple activities, allowing for a more accurate risk analysis. As a result, decisions made by the project team and senior-level stakeholders are better informed.

6. How did you get contractors and vendors to support the project team in finding a solution?

Getting everyone on board with change can be challenging, and contractors and vendors sometimes feel excluded from the risk management process. However, by making it clear that they are part of the solution, they become more willing to cooperate. Ensuring everyone involved in the project has a voice is essential to a successful outcome.

7. How did you secure the buy-in of senior managers?

One of the issues that we identified during the situational analysis was that senior management didn’t understand their role in supporting the project team. This meant that they were unaware of issues that the team was facing until it was too late.

Helping them to recognise the importance of their involvement with the project was a key step. Using Safran Risk to assist us in producing a series of ‘what ifs’– we produced as many as six in one day - we were able to capture the interest of senior stakeholders. This meant that adjustments could be made to the project to mitigate potential risks in a timely way. We produced these ‘what ifs’ monthly, allowing for better forward planning and increased stakeholder engagement.

“Because Safran Risk is so easy to use, we could put the data up on the wall and carry out what-if analysis directly with senior management. They asked us ‘Why didn’t we do this before?’”

- Albert 'Mac' McMillan

8. How frequently should tools and methodologies be reviewed?

The short answer is continually. Mega projects can last for upwards of eight years, and throughout this time, technology and methodologies will inevitably change. Senior management must review and adapt their processes as the project progresses.

Speed is vital when it comes to implementing risk management strategies, so the latest software and methodologies should be applied as quickly as possible.

9. How did you ensure that the project’s turnaround would continue in the future?

Monthly ‘what ifs’, regular CSRA and trend analysis ensured any potential risks on the horizon were identified and steps taken to mitigate them before they impacted the project. Adopting risk management best practice in this way also ensured that the project team had the right tools for the job, reducing strain on resources and improving collaboration.

10. What was the most challenging aspect of this turnaround?

One of the most challenging elements of managing any project is securing the support of senior stakeholders for mitigation strategies and contingency plans. However, once they can see the value of what can be achieved by a detailed CSRA, the process of project management becomes a whole lot easier.

“Most senior stakeholders think that project managers are either wizards or demons. If the project goes well, you’re a wizard, if it doesn’t, you’re a demon. Ensure you’re a wizard by offering the solutions that senior managers didn’t even know they needed.”

- Albert 'Mac' McMillan

Key takeaways

• Always control and manage your risk sessions
• Ensure everyone involved in the project has a voice
• Engage senior level stakeholders with solutions
• Move with the times to ensure your risk-tool insights are accurate and actionable
• Keep models and methodologies under review

Biographical note:

Mac has 48 years’ experience in project management, having held positions as programme director, project controller and project planning manager, to name just a few. His sector experience spans a variety of construction and infrastructure programmes and his expertise includes risk management consultancy and cost and schedule analysis. Mac is currently Managing Director at APMac Management Consultants.

If you’d like to find out more about how risk management can turn a failing project into a success story, watch our expert presentations from the Safran Project-Risk Conference 2021, here.


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