September 2008

Our first 2008 issue of The Risk Report reflects a very busy period for RiskTools. Why so busy? This year, we’ve launched RiskOrganizer Version 6.0 and have undertaken further enhancements to risk management processes.

We were also proud to deliver risk management presentations to CIOB Australasia and related bodies, which has generated considerable interest.

News

Is risk management adding value to business? This has been the curly question posed to members of CIOB Australasia and related organisations (such as the Institution of Civil Engineers in New Zealand) over the past twelve months.

RiskTools’ Gavin Halling, alongside Nick Crennan from legal firm Colin Biggers & Paisley, have asked this question during a workshop series presented in Melbourne, Sydney, Brisbane and Perth followed by Wellington and Auckland in New Zealand.

Topics up for discussion included:

§ Risk management to date

§ Current contract issues

§ Risk management developments

§ Potential future contract arrangements.

So, what was the conclusion? Is risk management adding value to business?

If done well, risk management adds significant value to business, in particular:

An integrated framework for the organisation improves efficiency and helps drive cultural change
An appropriate assessment of the cost of risk enables improved tender pricing
Improved management of issues helps to mitigate disputes
Integration of risk management across contracts gives rise to:

Improved risk allocation
Enhanced communications
Better and more reliable project outcomes

The complementary PowerPoint presentation is available by contacting Support@RiskTools.com.au.

Risk management maturity and spreadsheets

RiskTools has worked on a number of high profile but sensitive projects. In these situations, although the client is very supportive of the work undertaken, the project details cannot be publicised in the Risk Report. Nevertheless, the risk management issues and learnings can be shared.

We recently assisted a well-known engineering consultancy on a large project for one of their clients operating in country NSW.

Both organisations had undertaken several thorough risk management workshops and had a significant amount of data in spreadsheets. The challenge they faced was that the amount of data meant that information could not be readily accessed or sorted.

RiskTools facilitated the development of a risk management procedure, developed a Risk Breakdown Structure (RBS) and uplifted the existing data into RiskOrganizer. A series of risk workshops were held to further develop the higher-level project risks, alongside a risk workshop specifically focused on the contracting delivery strategy. Risk management can quickly assist in distilling the ‘least risky’ options that may exist on a project, such as the selection of an optimal delivery strategy.

Many organisations also use spreadsheets and as maturity in risk management increases it is worth reflecting on the limitations of spreadsheets. In particular:

• Spreadsheet development cannot be controlled – the number of spreadsheets is ballooning and controlling change is not possible

• Reporting data so that is useful is difficult (eg focusing on specific risk areas, the risk management process or integration across a program of projects)

• They are inefficient in terms of data management and workshop processes

• Spreadsheets cannot be readily supported in a multi-user environment

• There is a lack of transparency and interoperability (access to data) and integration across the organisation

• Content is generally limited

• Auditing is problematic (such as who is responsible for what data and processes)

Information in spreadsheets can normally be readily uplifted into RiskOrganizer and enable the above limitations to be overcome.

Search Function

As the number of project risks and their treatments continues to expand, we have enhanced RiskOrganizer with a key word search function.

This enables improved workshop efficiency as users can quickly find and refer to earlier risks and treatments. Treatments will often benefit a number of risks, so being able to find and then copy (through one click) a treatment with all its detail, to a different risk significantly enhances workshop efficiency.

The function forms part of version 6.2.0

To find out more about how RiskTools can help your business, visit www.risktools.com.au or contact us at support@risktools.com.au

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