Page 139 - Global Project Management Handbook

6-8 STATE OF THE ART OF GLOBAL PROJECT MANAGEMENT

TABLE 6.5 Selected Examples of Unforeseen Project Risk Issues Impacting Performance
Project IPRA Risk Performance
ID No. Element Issues

1 III.A1. Scope development The initial agreement to stay within scope was not
process followed by the owner, who spent $3 million more
III.D8. Schedule than budget without increasing the project schedule.
The follow-on schedule compression had severe
impacts on the contractor and resulted in increased
labor workloads, costs, and availability on other
projects.
2 II.A2. VAT The government sold the project to private investors
II.B6. Relationship and the sale impacted the contractor’s financing,
with government cash flow, and schedule. To maintain schedule, the
III.D8. Schedule contractor had to use $3 million of its own funds, a
contingency that resulted in VAT and other tax issues.
5 III. C3. Local design The requirement to have a local architect and engineer
service approve plans and specifications was not taken into
III.D8. Schedule consideration, and project contingency was used to
pay for the added cost of additional design services
and schedule delays.
9 II.C3. Religious The observance of holidays, daily prayer times, and
differences work schedules (local work week was Saturday to
III.D8. Schedule Thursday) decreased productivity. The religious and
cultural differences required the contractor to provide
more on-site management than originally planned.
9 III.A2. Technology The use of experimental technology by the process
III.D8. Schedule technology supplier increased plant capacity and
III.E2. Facility turnover process water system specifications for this remote
project. However there were unforeseen problems
with the technology that occurred during start-up and
this adversely affected both cost and schedule. The
contractor’s site staff was required to work with the
client and technology provider to resolve the problems.

12 II. C1. Traditions and In-country building practices made it difficult to
business practices achieve plans and specifications. As a result the
III.D12. Quality owner required the construction manager to
increase the number of supervisors to monitor
project performance.

identify critical risk issues. Members of the research team were involved directly in
observing the use of the tool on most of these projects. Their observations were
useful for modifying the assessment sheets slightly and helped them in writing
instructions on its application for field use.
The research indicates that many of the highest-impact risks occur in the first two
sections of the IPRA tool and relate to jurisdictional and financial issues. Organizations
that have been in a country performing projects appear to have the ability to identify
and better manage these risks, indicating that the issue of jurisdictional experience is
important.