Construction issues

The engineering and construction of a major pipeline planned to take Arctic oil to markets in the USA was clearly the project manager's responsibility, but he preferred to assume that associated regulation issues were 'external' (corporate) issues. However, preliminary risk analysis of the permissions process, using lawyers experienced in such processes, indicated that regulatory uncertainty was a major source of project uncertainty, and management of this uncertainty could not be effective if it was treated separately from the management of technical and construction issues. Consequently, the project was redefined to recognize the need for this integrated treatment, and the regulatory risk lawyers became key players in the project risk management team.

When clarifying project boundaries, it is often useful to recognize pervasive activities, sometimes associated with pervasive sources of uncertainty. For an environmentally sensitive project, 'maintain public confidence' may be such an activity, linked to one or more specific permission process activities, but also linked to other specific corporate activities within and beyond the project. It may be very important to recognize such pervasive activities formally, in order to ensure basic things get done to avoid the obvious associated threats.

A further aspect of this step is making sure all activity definitions correspond to a common date for the 'snapshot' that the RMP will provide. This is a change control aspect of the RMP (as distinct from the project). However, addressing change control for the RMP may serve as a reminder to ensure all necessary project change control processes are in place, as part of the risk assessment of the project management process. This illustrates the cross-checking that an RMP can stimulate. Having captured one new important idea or link, the instinctive question that should be asked is 'does this apply anywhere else?'

A goal of this step is a documented structure for the activities that reflect interactions with all other aspects of the analysis and portray the project which-way in terms that are both effective and efficient. Some of the interactions will be clarified later in the structure phase, as part of the iterative nature of this phase, but drawing together all the interactions and their effects that were identified earlier in the SHAMPU is a sensible part of this first step.

In the define phase, a key skill is the ability to choose an activity structure that is effective, but simple. This skill is tested in the structure phase. A similar issue arises when identifying source and response categories. For example, if two important sources both warrant the same response it may be sensible to aggregate them, while if different responses are involved separation is important. One way to address this is to formally identify some sources as 'collectable', to indicate they need to be collected together into a pool of the 'productivity variations' variety, leaving a relatively small residual of sources treated separately. Anticipation of appropriate choices in the identify phase is a key skill, illustrated by the wet buckle and dry buckle distinctions in Example 7.1.

The basic rules of thumb for collective/separate treatment at this stage in the process on a first pass are:

1. put all significant sources into the separate category if their responses are unique, but consider treating significant sources that have a common response as a single source;

2. put all small-effect sources with similar or common responses into the collectable category;

3. consider all intermediate cases on their individual merits, in terms of the value of insights expected from separate treatment versus the cost/effort/time required.

Statistical dependence is one of the issues that can make judgements related to the third category complex. Any difficult decisions are best deferred until quantification takes place, on a later pass.

There is a natural tendency simply to omit recording some sources altogether in the identify phase because they are immediately considered to be of a minor nature. The merit in not doing so, leaving such judgements until now, is to ensure that:

1. there is a complete audit trail, to protect organizations and careers should such sources prove important and questions are asked about their identification;

2. apparently minor issues that do not have an effective response are less likely to be overlooked;

3. prior to any estimation effort, sources are given an effective and efficient estimation structure, with separate treatment of sources that merit such treatment and collective treatment of those that do not;

4. the nature of the sources treated collectively is clarified, with a rich range of examples, which makes underestimation of the effect of such sources less likely.

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