APTIM’s Four-Step Risk Management Process

THIS WEEK’S CONTRIBUTOR:
John Bauer, Chief Risk Officer
APTIM
John.Bauer@APTIM.com
John brings more than 30 years of professional experience in the disciplines of risk management, project management, project controls, and strategic planning/logistics. He has led enterprise risk management for global project delivery firms and major programs in the energy, infrastructure, nuclear, and federal government sectors. At APTIM, John designs relevant strategies to mitigate data protection and risk assurance and to eradicate threats and systems vulnerabilities.

APTIM’s Four-Step Risk Management Process

Risk Definition

Risk is the possibility of an event occurring that will have an impact (positive or negative) on the achievement of objectives.

What is Risk Management?

Risk management is a project lifecycle process that is scalable to project size, complexity, and contract type. If there is low risk and the total project budget is relatively small, one would choose a more streamlined approach to risk management. If much is at stake, the project team should focus significant energy on the anticipation and prevention of risks using an intensive or formal approach.

Risk Management Process

In either case, the four basic steps of the risk management process of risk identification, risk assessment/analysis, risk mitigation planning, and risk monitoring and control would be followed, albeit to differing degrees.

1) Risk Identification: Risk and opportunity identification starts with in the proposal phase, is updated during the Healthy Start/project kickoff process, continues during project execution, and ends at project closeout. Identification techniques include project team brainstorming sessions, use of checklists, partnering with clients/stakeholders, etc. Both risk and opportunities are tracked in the project risk register. General topics to consider when identifying risks and/or opportunities include:

• Climate
• Contract Terms & Conditions
• Design
• Environmental
• Estimating
• Financial
• Geography/Geo-Political
• Labor Resources
• Materials/Equipment Resources
• Owner/Client
• Quality
• Quantities
• Safety
• Schedule
• Scope of Work Delivery Model
• Stakeholders
• Subcontractor Resources
• Technology

2) Risk Assessment/Analysis: The first step of analyzing the identified risks is to assign ownership of the risks. In some cases, this step is performed in partnership with the client as the client will take ownership of certain risks. For contractor-owned risks, the risks are analyzed by the appropriate project team member or subject matter expert to determine probability of occurrence, potential impacts to the project, and ranking the magnitude of the risks (typically ranked as high, medium, or low).

3) Risk Mitigation Planning: For contractor-owned risks, risk mitigation actions are developed for all high and medium risks and to a lesser extent the low risk. Similarly, actions needed to realize opportunities are also developed.

4) Risk Monitoring and Control: The project risk register should be reviewed at defined intervals based on the level of the risks to ensure the mitigating actions are being implemented and followed to ensure effectiveness. As part of the monitoring process, new risks are identified and retired risks are closed out.

APTIM Safety Professionals’ Role in Risk Management

APTIM safety professionals are recognized as highly qualified teammates from a variety of backgrounds and prior work experiences. As part of the integrated project teams, they play a key role in identifying project risks and opportunities not only within the safety function but across the entire project. They also play an important role in the development of risk mitigation strategies and then ensuring those strategies are being implemented and revised as needed throughout the entire project lifecycle until the risk is officially closed or the opportunity is realized. At the conclusion of the project, they have the opportunity to participate in the development of lessons learned so that APTIM can improve on the delivery of future projects.

Your Responsibility in Risk Management

APTIM senior leadership recognizes safety as a top priority. APTIM’s HSE policy is based on accountability, culture, and empowerment. The risk management process is used to ensure work is performed safely, compliantly, and cost effectively and is critical to our successful delivery of projects. Our process involves safety professionals in the decision-making process to identify and manage risks presented by our work. We maintain a safety-conscious work environment where our teammates feel comfortable about raising safety or other project concerns. If you ever feel your voice is not being heard on a project, it is your responsibility to raise your concerns to the next level of management, without fear of reprimand or retaliation. APTIM will always support you.