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Pages 89-118

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From page 89...
... Project Risk Management Implementation P A R T 4 Part 4 Objectives Part 4 addresses the following questions: • What are the characteristics of successful project risk management processes? • How can a risk­based culture be fostered?
From page 90...
... 95 C H A P T E R 9 All projects delivered in an organization, regardless of size, type, or funding source, can benefit from some level of project risk management activity. The process must make the most efficient use of the limited resources of time, people, and money in the organization.
From page 91...
... 96 Guidebook for Successfully Assessing and Managing Risks for Airport Capital and Maintenance Projects • Inclusion of project standards to trigger response strategies, enable monitoring and control, and provide a basis for evaluation of effectiveness. • Incorporation of process and project lessons learned to drive continuous improvement and build institutional knowledge.
From page 92...
... Implementing Project Risk Management 97 Table 9.1. Overcoming barriers to implementing project risk management in an organization.
From page 93...
... 98 Guidebook for Successfully Assessing and Managing Risks for Airport Capital and Maintenance Projects 9.4 Flowchart as Project Risk Management Tool Selection Guide Figure 9.1 depicts the different decision points included in the project risk management process and can be used at the planning step to guide the selection of tools to be used based on the complexity of the project. The flowchart can also be referenced at various points Figure 9.1.
From page 94...
... Implementing Project Risk Management 99 throughout the life of the project to ensure that the right amount of project risk management has been applied. Figure 9.2 illustrates a deconstructed view of the project risk management flowchart with each step separated in order to highlight the decision point and the tool that would be selected as a result of the decision.
From page 95...
... 100 Guidebook for Successfully Assessing and Managing Risks for Airport Capital and Maintenance Projects Figure 9.2. (Continued)
From page 96...
... Implementing Project Risk Management 101 Step Low Risk (Simple or SmallScale Projects) High Risk (Large, Critical, or Complex Projects)
From page 97...
... 102 Guidebook for Successfully Assessing and Managing Risks for Airport Capital and Maintenance Projects Enterprise Risk Management Establish risk tolerance within the organization. Project Management Establish consistent, repeatable project management activities.
From page 98...
... 103 Ashley, D
From page 99...
... 104 Acceptance A risk response strategy that involves a lack of action related to the risk event prior to the event's occurrence. Avoidance A risk response strategy where the risk event can no longer have an impact on the objective.
From page 100...
... Glossary 105 Mitigation A risk response strategy that involves minimizing either the probability of the threat event or the impact (or both)
From page 101...
... 106 Guidebook for Successfully Assessing and Managing Risks for Airport Capital and Maintenance Projects Risk Model A mathematical representation of a project that can be used as the basis for quantitative risk analysis. Risk Monitoring and Control Managing the effectiveness of the selected risk handling approaches.
From page 102...
... 107 A P P E N D I X A The taxiway reconstruction project case study includes additional information in the case study material not used in the main portion of the guidebook in order to demonstrate the entire practice of the process of project risk management. Using the following flowchart as an organizer, the taxiway reconstruction example follows the flow of a moderate- to high-risk project and connects the project risk management process to the overall organization practice of project management and program management.
From page 103...
... 108 Guidebook for Successfully Assessing and Managing Risks for Airport Capital and Maintenance Projects
From page 104...
... Case Study I: Taxiway Reconstruction 109 The project was scheduled to begin design in June, with construction expected to begin 6 months later. The reconstruction project was scheduled in alignment with FAA funding schedules in anticipation of receiving funds in time to begin and conduct construction.
From page 105...
... 110 Guidebook for Successfully Assessing and Managing Risks for Airport Capital and Maintenance Projects Step 1: Taxiway Reconstruction -- Risk Identification Background of Airport The airport was managing multiple construction projects at the same time using a combination of internal and contract staff. The airport operates two runways and receives funding based on medium-hub status.
From page 106...
... Case Study I: Taxiway Reconstruction 111 Step 2: Taxiway Reconstruction -- Risk Analysis Risk Analysis Once the risks were identified, analysis was performed using the risk register. A rating of 1–5 was assigned to qualitatively analyze the probability of a risk occurring as well as its impact on the project.
From page 107...
... 112 Guidebook for Successfully Assessing and Managing Risks for Airport Capital and Maintenance Projects Step 3: Taxiway Reconstruction -- Risk Response Planning Risk Response Plan During the risk workshop, after analysis was complete, actions were identified and captured in the risk register to respond to risks according to their perceived severity and the probability of each risk occurring. The response was determined to be either avoidance, transference, mitigation, or acceptance.
From page 108...
... Case Study I: Taxiway Reconstruction 113 Step 4: Taxiway Reconstruction -- Risk Monitoring and Control Risk Monitoring and Control The monitor and control step was managed in daily project progress meetings, with all stakeholders attending. These meetings included risk review and project issues reporting.
From page 109...
... 114 Guidebook for Successfully Assessing and Managing Risks for Airport Capital and Maintenance Projects Lessons Learned: Taxiway Reconstruction Project Debrief In the project debrief meeting, the data captured in the monitor and control section of the risk register were reviewed. In addition to those items, other discussions included project issues that occurred that were not anticipated.
From page 110...
... Case Study I: Taxiway Reconstruction 115 Lessons Learned • Changed bid process to ask for both asphalt and concrete for all future taxiway projects in order to have multiple bids. • Applied rescoping to all future taxiway projects to include paved shoulders, which has affected original plan of 5 years and $58 million budget, now increased to 9 years and $88.2 million.
From page 111...
... 116 A P P E N D I X B The TSA recently mandated a change to the passenger screening process. In order to accommodate this mandate, a small-hub airport needed to perform an internal build-out to reconstruct the physical space where staff are located in order to create the required space.
From page 112...
... Case Study II: Office Build-Out 117 The risks were plotted on the P-I matrix according to their values, and discussion was held to analyze the overall results. The results of the discussion determined that all of the risks identified could be controlled by managing the schedule of the project very closely.
From page 113...
... 118 A P P E N D I X C Probabilistic Modeling One of the most widely accepted quantitative analysis techniques is probabilistic modeling, a computer-driven methodology of simultaneously evaluating the impact of all identified risks to arrive at defined probability distribution of the project's cost, completion date, or other key project inputs or objectives. The overall process is depicted in Figure C-1.
From page 114...
... Probabilistic Modeling 119 5. Define Input Distributions.
From page 115...
... 120 Guidebook for Successfully Assessing and Managing Risks for Airport Capital and Maintenance Projects Table C-1. Possible probability distributions.
From page 116...
... Probabilistic Modeling 121 Figure C-2. Example output of probabilistic modeling simulation.
From page 117...
... 122 Guidebook for Successfully Assessing and Managing Risks for Airport Capital and Maintenance Projects 9% 11% 14% 17% 31% 32% 40% 57% RD4 - Field inspec ons may show considerable distress on main structure RD1 - Design Package for Design Build may take longer than expected RD3 - Program may not be fully defined by Q1 2012 RD9 - Cash Collec on may not be temporarily stopped in toll lanes RD11 - FHWA Design Excep on for substandard geometry may not be received RD2 - Procurement Process could take longer than 8 months RC20 - Restricted Work Hours may delay construc on REN4 - Environmental permits may not be received by Q1 2012 Figure C-3. Example sensitivity output using a tornado diagram.
From page 118...
... Abbreviations and acronyms used without definitions in TRB publications: A4A Airlines for America AAAE American Association of Airport Executives AASHO American Association of State Highway Officials AASHTO American Association of State Highway and Transportation Officials ACI–NA Airports Council International–North America ACRP Airport Cooperative Research Program ADA Americans with Disabilities Act APTA American Public Transportation Association ASCE American Society of Civil Engineers ASME American Society of Mechanical Engineers ASTM American Society for Testing and Materials ATA American Trucking Associations CTAA Community Transportation Association of America CTBSSP Commercial Truck and Bus Safety Synthesis Program DHS Department of Homeland Security DOE Department of Energy EPA Environmental Protection Agency FAA Federal Aviation Administration FHWA Federal Highway Administration FMCSA Federal Motor Carrier Safety Administration FRA Federal Railroad Administration FTA Federal Transit Administration HMCRP Hazardous Materials Cooperative Research Program IEEE Institute of Electrical and Electronics Engineers ISTEA Intermodal Surface Transportation Efficiency Act of 1991 ITE Institute of Transportation Engineers MAP-21 Moving Ahead for Progress in the 21st Century Act (2012) NASA National Aeronautics and Space Administration NASAO National Association of State Aviation Officials NCFRP National Cooperative Freight Research Program NCHRP National Cooperative Highway Research Program NHTSA National Highway Traffic Safety Administration NTSB National Transportation Safety Board PHMSA Pipeline and Hazardous Materials Safety Administration RITA Research and Innovative Technology Administration SAE Society of Automotive Engineers SAFETEA-LU Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (2005)

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