organisations want a robust and transparent system that can be utilised during current and future development phases of a project to inform decision-making and guide levels of investment in various project investigations. in setting up a risk management framework for a project it is essential that it take account of all risks to project including technical, environmental, economic, stakeholder, political delivery and on-going operational considerations. it must be set up to ensure that the project is right the first time. to ensure the project is successful in terms of both delivery and ultimate project performance, r2a has developed a project due diligence methodology.
it typically only refers to the management of project uncertainty during the construction phase (tendering to commissioning) as shown in the diagram below. project due diligence refers to the consideration of risk over the entire project life cycle. the due diligence aspect arises from confirming that the ultimate objectives (critical success factors) of the fully functioning outcomes are achieved for all stakeholders rather than just the delivery portion to the contract specification. the overall concept can be described by the following figure.
are your projects actually behind schedule and over budget, or are they simply the victims of estimates that were not put through a rigorous review process? there is one root cause that is missing from that report that i have seen time and time again over the 19 years i have managed projects: a lack of upfront due diligence. enforcing upfront accountability through sign-off when the costs, benefits and timelines are agreed upon is critical. i have personally been in a number of situations where i was held accountable to deliver on a budget and timeline created by someone else.
but status reports only show that the project is in the red. the project management office (pmo) should only approve projects that have the signatures on numbers; otherwise, projects are approved with a high-risk rating due to lack of upfront due diligence. we have all been in after action reviews (aars) of projects where a considerable amount of time is spent analyzing how tasks fell behind and money was overspent. here are some potential questions to include in that checklist: at this point, if you are thinking this is a lot of upfront work, you are absolutely right. but this process is necessary to mitigate risk and give your strategic projects the best chance to succeed.
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