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Guide to risk
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Guide to risk managementIdentification and communication of client's project objectives and project risks (and any constraints) |
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Client's project objectives |
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4.1 |
The client may benefit from professional assistance in identifying whether the fulfilment of its business objectives needs to involve a construction project and in establishing what the objectives of such a project are. |
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4.2 |
Working from a statement of its business objectives, the client should attempt to produce a "value hierarchy" identifying its main aim and its secondary and tertiary objectives for carrying out the project. The findings are probably best expressed in a tabular or graphic form. An example of a value hierarchy is set out in Appendix 1. |
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4.3 |
Secondary and tertiary objectives should be weighted according to their importance within their respective categories. This is not an exact science. However, it is the relativity of the weightings for each objective which is important. The weighting process should concentrate the client's attention on those project objectives that are most important. |
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Client's project risks |
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4.4 |
The next stage is to consider the risks related to the achievement of each of the secondary project objectives. (To list the risks applicable to the primary objective or (if more than one) each primary objective, is likely to be too large a task that may result in a risk register that lacks focus and is unmanageably large. Also, listing the risks applicable to achieving the tertiary objectives may lead to duplication and wasted effort in relation to the achievement of the objectives that are not of major importance). |
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4.5 |
The secondary objectives may be used as separate risk categories (for example a new hospital building might include among its secondary objectives "improved access to the public": this may become a separate category of all risks that may affect the case of access to the hospital). These risk categories may then be extrapolated into a risk register as explained in greater detail in section 6. It may ease the management of the individual risks within each category of risks to appoint a "risk champion" in respect of each category. |
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4.6 |
The main objectives for the project (primary, secondary and tertiary) need to be communicated to the suppliers tendering or negotiating for involvement in the design and construction of the proposed project so that they can understand the importance to the client of the proposed project and the benefits the client hopes to achieve from it. |
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4.7 |
The client's value hierarchy should also prove useful as an evaluation tool to consider which potential suppliers best address the client's project objectives. |
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4.8 |
Following the selection of a preferred supplier or preferred suppliers (either by competition or negotiation) any client objectives not previously revealed on grounds of commercial confidentiality (e.g. a strategy to develop new facilities to pre-empt a rival) should be disclosed where possible in order to give the preferred supplier(s) a complete understanding of the client's objectives. With this knowledge the suppliers will have a much better chance of delivering a project that meets the client's objectives and will also have a good idea of what the client will consider valuable in terms of enhanced performance for the project or its delivery. For example, if the client is constructing a supermarket to achieve the primary objective of maximising sales of its goods, over the next 5 years or so, the client is more likely to value a shorter construction programme than an investigation into the relative design lives of a steel or concrete frame for the building. Furthermore, the main client objective in respect of the frame of the building may be a clear floor space with the minimum number of columns which might obstruct valuable income-generating space. |
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4.9 |
It is good practice to start the process of communicating the client's project objectives and identifying the potential risks to the project with the involvement of those who will be responsible both for the design and construction of the project at the earliest opportunity. |
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Supplier's Project Risks |
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4.10 |
In addition to identifying the client's objectives and potential risks, it is important for the client to understand some of the potential suppliers' risks and to devise an effective strategy to deal with them from the outset. |
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