The role of project risk management in the success of selected Old Mutual projects

Abstract

Project risk management is concemed with identifying, assessing and responding to uncertainties which could impact project outcomes. These impacts might be positive or negative, although the tendency in business has been to focus on the negative - or downside - risks, Le., those risks which could be potentially detrimental to project outcomes. Risk management requires an investment in time, effort and cost. For this reason, it has to be efficient if it is going to make business-sense. If it can be shown that risk management plays a positive role in supporting successful project delivery, then the case for investing in risk management will be validated. This study focuses on two projects within Old Mutual, to investigate the link between risk management and project success. Both projects had been approved by the company's Strategic Investment Committee (SICOM), which required that they conform to various governance criteria, including that their risks be managed according to a specified process. One of the projects - CRAFT - was deemed by its stakehoiders to have delivered successfully, while the other - SSA - was perceived to have had mixed results. As a precursor to the study, an extensive review of the current literature on project risk management was undertaken. The literature was found to be largely consistent in its definition of project risk management, and to be concerned mainly with developing the processes and techniques for improving risk management in the live project environment. Based on the literature, it was possible to develop an analytical framework for use as a generic tool in evaluating the role which effective risk management practice could have on project success.