Risk Management Keys in a Complex Project Environment

Learning objectives:

Defining the features and the external and internal environmental factors of a complex and strategic project,
Developing a systematic and formalized multi-criteria decision-making process based on strategic risk analysis in a complex project environment,
Identifying and analyzing project risks throughout the project life-cycle in parallel with the project management

A complex project may have a very long and multiple phased life-cycle, a large number of stakeholders within a complex organizational plan, a complex resource management, technical complexities, contractual complexities and macro-environmental factors. On the other hand, complex projects signify a strategic importance for the project stakeholders in terms of their business strategy, brand image, financial and economic opportunities. Managing a complex and strategic project requires, in its life-cycle, a specific organization and a specific approach in order to reach the project objectives in terms of cost, time and project performance. The complexity of a project leads to the existence of interdependent risks, hard to anticipate and keep under control. For complex and strategic projects, it is necessary to identify and assess all the potential risks and opportunities through the whole project life-cycle, and develop action plans to mitigate, eliminate or transfer negative risks. However, in the early phases of a project, it is difficult to identify and assess project risks. While front end planning is important, not all events and scenarios can be foreseen when the project can take several years to complete and may involve many companies and stakeholders. In this stage of the project, a strategic and environmental analysis is indispensable for identifying and analyzing the major risk factors for taking a strategic decision about the project. In this study, a formalized Multi-criteria decision making process is developed based on a strategic risk analysis in complex environment. The external and internal environmental risk and opportunity factors are analyzed in a systematic approach in order to take a strategic decision at three key-steps of the project: (1) at a very early stage and at a strategic level, to consider the opportunity of affecting some resources to a given (possible) project, (2) later, when they need to decide, after preliminary studies, if it will effectively consider the project and mobilize its engineers for detailed studies, (3) before the contracting phase in order to develop risk allocation plan and negotiate it with the project customer.