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1
Introduction
2
Methodology in summary
3
Client's business objectives and risks
4
Client's project objectives and risks
5
Objectives of key suppliers
6
Risk register
7
Action plan for prioritised risks
8
Regular review of risk register
9
Dealing with consequences of risks
A1
Example
'Value Hierarchy'
A2
Example Project Charter/Protocol
A3
Example Risk Register

3
Guide to risk management

Identification of client's business objectives and business risks

 

Business objectives

3.1

Whether the client is a private or public sector organisation, it needs to be clear as to its overall objectives. In the case of a private property developer client, this might be to develop and manage a portfolio of properties that are attractive to tenants who will therefore occupy promptly and pay full market rents, thereby contributing to the developer's profitability.

3.2

In the case of a public sector organisation, the main objective might be to provide an enhanced service to the community making best use of available funds.

 

Business risks

3.3

Having identified the objectives of the business the next step is to identify the business risks associated with the achievement of those business objectives.

3.4

As a starting point, consider the general categories of risk and the possible specific risks set out in the table below. The following list is not intended to be definitive or applicable in all cases to all projects. It may however help to focus thoughts.

Category of risks

Possible specific risks

Financial

  • funding

  • affordability

  • taxation (and any proposed changes in taxation)

  • programming

Commercial

  • business profitability

  • possible commercial conditions imposed by funders (e.g. use of materials sourced from particular countries/locations)

Planning

  • obtaining all necessary statutory consents

  • the effect on programming

Design

  • functionality of space

  • performance requirements

  • quality in terms of aesthetics and functionality

  • reliability in use

Construction

  • performance

  • costs

  • quality

  • time

Contractual

  • procurement

  • project structure, communication structure

  • risk transfer and ownership

Political/
Social

  • government change

  • regulatory change (e.g. changes in E.U requirements or regulations)

  • impact of project on local and wider communities

  • economic conditions

  • market conditions

  • statutory background (e.g. any changes in legislation)

  • environmental

Changes in base requirements

  • internal (within the client organisation)

  • external

  • changes in corporate governance (does the project fit within the rules of the client organisation?)

  • Changes in technology

  • security (e.g. the effects of terrorism, theft or loss of computer networks through imported viruses)

Insurance

  • what insurance is available?

  • what is its cost and effects on the viability of the project?

  • what excesses are applicable?

Health and safety

  • what are the risks to health and safety of continuing to run client's business in its present way?

  • how might these risks be best mitigated?
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www.constructingexcellence.org.uk
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