Book description
Since I wrote the Foreword for the second edition of this book, risk management processes have become much more widely used, but controversy about what should be done and how best to do it has grown. Managing risk is a risky business. Chapman and Ward provide an in-depth explanation of why it is important to understand and manage underlying uncertainty in all its forms, in order to realise opportunities more fully and enhance corporate performance. They show what best practice should look like. The implications go well beyond the conventional wisdom of project risk management, providing an enlightening new perspective.
—Professor Tony M. Ridley
Imperial College London, Past President, Institution of Civil Engineers
Chris Chapman and Stephen Ward continue to educate the profession with this masterful exposition of the differences between, and the potentials for combinations of, risk, uncertainty and opportunity. Particularly welcome is the way they integrate this trio into the project lifecycle – the bedrock of project management control and organization.
—Peter W.G. Morris
Head of School and Professor of Construction and Project Management University College London
Chris Chapman and Stephen Ward's books on Project Risk Management have been an essential part of my repertoire for twenty years, and they are top of my recommended reading for the courses I do on that subject. In this book they have enhanced their previous work to focus on uncertainty management and emphasise more strongly opportunities for improving project performance, rather then just identifying what can go wrong. A structured process is an essential part of managing project uncertainty, and their process is one of the most powerful. This book will be added to my repertoire.
—Rodney Turner
Professor of Project Management, SKEMA Business School Lille
A profoundly important book. With How to Manage Project Opportunity and Risk, Chris Chapman and Stephen Ward take a good thing and make it better. Members of the project management profession have been influenced for years by their insights into project risk management. With this latest instalment the authors demonstrate that risk and uncertainty needn't be dreaded; in fact, the reverse side of the 'risk coin' has always been opportunity. My sincere appreciation to Chapman and Ward for turning this particular coin over and showing readers, academic and practitioner alike, the opportunity embedded in managing projects.
—Jeffrey K. Pinto
Andrew Morrow and Elizabeth Lee Black Chair in Management of Technology Sam and Irene Black School of Business, Penn State Erie
Table of contents
- Cover
- Contents
- Title
- Copyright
- Dedication
- Foreword to this edition
- Foreword to the second edition
- Foreword to the first edition
- Preface and overview by the authors
- Acknowledgements
-
Part I: Setting the scene
-
Chapter 1: Uncertainty in and around projects
- Projects and the associated ‘asset/change’ concepts
- Operations, corporate and project-related uncertainty
- Ontario Hydro example
- Operations, project and corporate aspects of a single asset
- A lifecycle stage structure with a ‘purpose’ focus
- Simplifications and elaborations for the nominal lifecycle
- The seven Ws framework
- Sources of uncertainty as both components and composites
- Four different types of uncertainty component
- A ‘performance lens’ and a ‘knowledge lens’ for uncertainty
- Criteria–plan and knowledge–plan relationship structures
- Conclusion
-
Chapter 2: Uncertainty, risk and opportunity
- A minimum clarity approach to quantifying uncertainty
- The probability-impact grid (PIG) – a tool that needs scrapping
- Getting beyond the limitations of a focus on risk
- Towards a focus on uncertainty management
- Quantification of uncertainty for the Highways Agency
- Developing initial trust and sustaining trust between key parties
- A simple approach to contracting risk
- Evaluating risk for option choices
- An office manager’s photocopier decision
- Conclusion
-
Chapter 3: Key motives for uncertainty management
- Trust
- Documentation
- Developing a clarity efficient approach
- Qualitative and quantitative analysis
- Targets, expectations and commitments
- Understanding uncertainty and communicating understanding
- Risk efficient choices and linked opportunity management
- Facilitating creative thinking
- Searching for opportunities as ‘fun’
- Constructive insubordination
- Conclusion
-
Chapter 4: An overview of generic process frameworks
- Some alternative process frameworks
- Limitations of standards and professional guidance
- A cautionary tale
- The key role of planned and unplanned iterations
- The basic PUMP framework
- The PUMP pack framework
- Ambiguity about responsibility for risk and opportunity
- Gateway anticipation
- Ambiguity about the nature and role of governance
- Some relevant history from the late 1950s to the early 1990s
- The PRAM guide
- The RAMP guide
- The PMI PMBOK guide
- Shortcomings in common practice processes
- Conclusion
-
Chapter 1: Uncertainty in and around projects
-
Part II: The generic process in one key lifecycle stage
-
Chapter 5: Define the project
- A high clarity example to begin discussion
- Project lifecycle stage structure
- Project context: the where
- Project parties: the who
- Project objectives: the why
- Project design: the what
- Four kinds of whichway plans
- Project resources: the two kinds of wherewithal plans
- Project timing: the when
- Define phase deliverables fit for purpose?
- The ongoing and integrative nature of the define phase
- Lower levels of clarity
- Conclusion
-
Chapter 6: Focus the process
- Clarify the process lifecycle
- Clarify the process context
- Clarify the process parties
- Clarify the process objectives
- Top-down uncertainty appreciation
- Consolidating the process strategy and scope
- Process scope and strategy fit for purpose?
- Select a process approach
- Determine the resources required
- Determine the process timing
- Process plan fit for purpose?
- Focus phase and define phase joint deliverables
- The ongoing nature of the focus phase
- Focus phase short-cuts and specific PUMPs
- Conclusion
-
Chapter 7: Identify all the relevant sources of uncertainty, response options and conditions
- Clarify immediate priorities
- Decompose the next priority source if this is appropriate
- Clarify the relevant primary responses
- Clarify the relevant secondary sources and responses
- Clarify the relevant conditions
- Approaches to identification and documentation
- Clarify the immediate need for more depth or more breadth
- Ordering and considering all relevant performance criteria
- Ordering and considering all other relevant aspects of the seven Ws
- Sources in other stages of the project lifecycle
- Links and dependencies anticipated in the identify phase
- Generalizing ‘more depth’
- Different contexts leading to different starting positions
- Keeping it simple when lower clarity is appropriate
- Identification phase deliverables fit for purpose?
- Conclusion
-
Chapter 8: Structure all uncertainty
- Review key plan components and associated sources
- Review other plans and Ws and associated sources
- Identify general responses and order responses
- Examine links between sources and responses
- Develop diagrams and review associated model structures
- Structure phase deliverables fit for purpose?
- Low and intermediate levels of clarity
- Conclusion
-
Chapter 9: Clarify ownership
- Clarify the objectives of the contracting strategy
- Identify owners for uncertainty and response options
- Select a contract approach
- Select contract terms
- Determine the timing of responsibility transfers
- Three separate fit for purpose tests?
- The ongoing nature of the ownership phase
- A simple example
- Other low clarity examples involving clarity efficiency
- Conclusion
-
Chapter 10: Quantify some uncertainty
- Using data to develop ‘objective’ estimates
- Subjective estimates when data is limited or absent
- An outline of the quantify phase
- Start ordering the sources
- Clarify associated conditions
- Assess the next priority source
- Size a source using a histogram approach when data is available
- Size a source without data using a simple scenario approach
- Broader interpretation of all first-pass estimates and revisions
- Refine and restructure a source
- How many intervals for a rectangular histogram approach?
- The reliability of subjective estimates of uncertainty
- Managing the subjective probability elicitation process
- Dealing with contradictory data or a complete absence of data
- Extend the ordering of the sources
- The fit for purpose test
- Selective refining and restructuring of sources
- An example illustrating refine/restructure tradeoffs
- A ‘cube factor’ view of bias control
- Quantify phase treatment of dependence
- Conclusion
- Chapter 11: Evaluate all the relevant implications
-
Chapter 5: Define the project
-
Part III: The generic process in all lifecycle stages
-
Chapter 12: Fully integrating the strategy shaping stages
- Strategy gateway PUMPs and associated interim reports
- Support and convince at a strategic level
- DOT shaping PUMPs
- DOT gateway PUMPs and interim reports
- Concept shaping PUMPs
- Concept gateway PUMPs and interim reports
- NatWest Bank information systems example
- A contractor’s perspective on the strategy shaping stages
- Having a clear view of relevant stakeholder perspectives
- Portfolio/programme/project boundary issues
- Conclusion
- Chapter 13: Fully integrating the strategy implementation stages
-
Chapter 12: Fully integrating the strategy shaping stages
-
Part IV: Key corporate implications
- Chapter 14: Developing PUMP capability as a project
-
Chapter 15: Contracts and governance as frameworks for enlightened relationship management
- An enlightened relationship management approach to contracts
- Consequences of two simple contract payment terms
- Well-founded willingness to own uncertainty
- Transparent pricing
- Efficient allocation of uncertainty
- Incentive contracts
- Multidimension incentive contracts
- Intra-organizational relationships and governance
- Conclusion
- Chapter 16: A corporate capability perspective
- References
- Glossary of terms as used in this book
- Index
Product information
- Title: How to Manage Project Opportunity and Risk: Why uncertainty management can be a much better approach than risk management
- Author(s):
- Release date: March 2012
- Publisher(s): Wiley
- ISBN: 9780470686492
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