Risk-management perspective on the project lifecycle | My Assignment Tutor

UTTERWORTH EINEMANNInternational Journal of Project Management Vol. 13, No. 3, pp. 145-149, 1995 Copyright ©1995 Elsevier Science Ltd Printed in Great Britain. All rights reserved 0263-7863/95 $10.00 + 0.000263-7863 (95) 00008-9Risk-management perspective on the project lifecycleStephen C Ward and Chris B Chapman Centre for Risk Research, Department of Accounting and Management Science, University of Southampton, Highfield, Southampton 5017 1BJ, UKShortcomings in the project-management process can be major sources of project risk. The paper highlights these sources of risk and places them in the project lifecycle. The project lifecycle is commonly described in terms of four phases: conceptualisation, planning, execution, and termination. The paper offers a more detailed framework, involving eight stages and a number of steps within each stage. Explicit acknowledgement of this more detailed stage and step structure should facilitate more effective identification and management of process risks.Keywords: project lifecycle, risk drivers, risk managementWhen considering the risks associated with a project, attention is often focused on risks specific to the physical nature of the project. However, many key project risks are associated with the project-management process itself. Such generic ‘process’ risks are present in all projects, regardless of their physical nature, and so they deserve special attention. More effective management of process risks would be possible if these risks were identified and considered in a more complete and systematic way than is often the case. This paper offers a framework for con-sidering process risks that is based on a generic description of the project lifecycle (PLC), and it highlights some important areas of process risk within this framework.Stages in the project lifecycle The PLC is a convenient way of conceptualising the generic structure of projects over time. The PLC is often described in terms of four phases, with terms such as conceptual-isation, planning, execution and termination being used’. Alternative terms may be used, such as formation, buildup, main programme and phaseout’, but the underlying phases are essentially the same. The PLC can be described in terms of the extent to which each phase differs in terms of the level of resources employed’, the degree of definition, the level of conflict’, the rate of expenditure, and so on. This can help to show how management attention to the factor plotted needs to vary over the life of the project. By way of example, Figure 1 shows how costs typically accumulate in projects, with the majority of expenditure taking place in the execution phase, although the precise shape of the cost curve may vary greatly from one project to another.For risk-management purposes, lifecycle diagrams such as that in Figure 1 point to the desirability of addressing project risk earlier rather than later in the PLC, before major resource commitments are made. However, more detailed insights into the scope for risk management of PLC processes require consideration of the individual phases, and of the processes within each phase. Table 1 is an elaboration of the four-phase characterisation of the PLC used by Adams and Barndt1 . Breaking down the four phases of the PLC into eight stages goes some way towards highlighting sources of process risk. However, a still more detailed description of the PLC is useful in underlining where particular risks occur in the PLC. Specifically, it is useful to break the eight stages into a larger number of steps, as listed in Table 1. In the early stages, these steps imply a process of gradually increasing detail and focus on the provision of a product or service deliverable.Concept stage It is useful to think of the ‘concept’ stage as part of an innovation process, and to draw on ideas from Lemaitre and Stenier’s description of the innovation process3, although the scope of our ‘concept’ stage is somewhat different. The ‘concept’ stage involves identifying a deliverable to be produced and the benefits to be expected from the deliverable. It begins with a ‘trigger event’4, when a member of an initiating organisation perceives an opportunity or need. At this point, the project deliverable may be only a vague idea, and some initial development may be associated with the ‘concept capture’ step. ‘Clari-fication of purpose’, involving the identification of relevant performance objectives and their relative importance, is145

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