Page 146 - Global Project Management Handbook

6-14 STATE OF THE ART OF GLOBAL PROJECT MANAGEMENT

IPRA tool from an individual point of view can be of merit in situations where an
expedited review is necessary or very early on in project development.
The IPRA tool is best used to help project participants arrive at a studied understanding
of risk. The team should strive for consensus around each IPRA element before moving to
the next. If action needs to be taken on an element, possible remedies should be captured
on a flip chart or by another method of recording action items. Using the IPRA tool early
in the project life cycle will identify many areas of risk and gives the project team a
roadmap for control and mitigation. In this early phase, several important issues typically
affect the overall viability of the project, such as scope development and the alignment of
project participants. The IPRA tool is a mechanism that can be used to identify or discover
risks specific to international ventures and to organize the work to diffuse future risks. It
also can provide an effective means of “handing off” the project to other entities or help-
ing to maintain continuity as new project participants are added to the project.
The IPRA assessment worksheet serves as a basis for risk mitigation by the project
team. The IPRA risk matrix can be used as a summary roll-up for senior management, in
effect, helping to bridge any communication gaps concerning project understanding. In
addition to the risk matrix, the summary also should contain a brief write-up addressing
the specific areas of concern, and it should summarize the IPRA analysis. In particular, the
assessment can focus attention on the elements that show higher relative impact (levels D
and E), as well as higher likelihood of occurrence (levels 3 through 5), on the risk matrix.

CONCLUSIONS

In the course of this research it became clear that participants valued the identification
and management of overarching project risks and recognized the dangers of exclusive
attention to only risks within their areas of influence. Although the need for comprehen-
sive risk identification, assessment, and management was acknowledged by all, it was
practiced by few. Project participants are often segmented into project phases and disci-
plines that create information and communication disconnects. Complicated by the his-
torically adversarial owner-contractor relationship, new risks go unnoticed or are not
addressed, exacerbating disconnects between the project team and executive manage-
ment. As a result, few project participants have an understanding of all the risks involved.

Many of the risks that influence international projects fall outside those typically found
on domestic projects. Acknowledging this reality, almost all the participants in this
research agreed that an improved process is needed to identify and assess international
risks and that there would be a benefit to having a structured tool/process. Effective risk
management improves project performance on international projects in terms of cost,
schedule, and market viability.
This chapter details the research and development of the IPRA tool, a project
management tool that allows for the identification and assessment of the life-cycle
risk issues specific to international construction for both owners and contractors. As
summarized in Table 6.6, the development of the IPRA tool involved a variety of
data collection activities based on input from 119 different industry experts. Data
were analyzed using standard statistical and qualitative analysis techniques, and the
fundamental conclusions are as follows:

1. The collective results from this research shows that the IPRA tool is a comprehensive
and sound method for identifying and assessing the relative impact of the majority of
risk issues encountered on international capital facilities.
2. The IPRA tool and the baseline relative impact values help the project team to identify
the risk factors of highest importance to the project team.