Risk Management Concept
The statement „no risk no reward“ is trivial but correct. On the other hand the risks of a single plant construction or infrastructure project can threaten the existence of a company. Therefore it is important to identify risks early on, to assess them properly and to minimize them to the extent possible. If risks have to be assumed the approval of an appropriate managment level should be required. A risk management system should be established which should consist of a defined process encompassing bidding and implementation phase. You will find further information in respect of these proceedings if you click on the grey fields below.
I help companies set up a systematic risk management process for plant construction and infrastructure projects or analyse and improve an existing risk management process. Moreover I can advise in respect of particular projects through analysis of bidding documents and draft contracts. While I limit myself to legal aspects cooperation partners are in charge of technical and commercial aspects. The risk management counseling covers the bidding and implementation phase. It is not only directed to contractors but also to employers. My cooperation partners and I dispose of considerable experience in the field of risk management of plant construction and infrastructure projects.
Some more Information on Risk Management
Risk management during bidding and implementation phase
Projekt risks have to be dealt with in a responsible manner – by contractors as well as owners – in view of the threats they pose to a company. When a contract for a project is entered into the question should be whether the expected positive project outcome outweighs the risks to be assumed. The approach should certainly not be „no risk no fun“ since it would be equivalent to gambling. Moreover the willingness to take risks or risk aversion of the working level should not be decisive either since this would not be a systematic but a random approach.
A systematic appoach should be pursued instead and a standardized process should be established through which relevant project risks can be identified early on. In a next step it has to be considered to what extent they can be mitigated or transferred (to insurance or contract partners). Such a process should cover bidding and implementation phase.
Moreover it should be determined which management level may approve the assumption of project risks. During project implementation risk development should be systematically followed through an appropriate process (and chances should be made use of). The collection of data at the end of a project provides a data base for the risk management of future projects.
Since there are technical, commercial and legal risks, an interdisciplinary approach is required. For this reason I work together with cooperation partners who are in charge of technical and commercial aspects. Moreover the know-how and the experience of the client play a central role. The risk management system should be specifically designed to the respective company, its size and structure and its typical projects. The idea is not to fit-force a standard concept.
Contractors as well as owners should dispose of such risk management systems. Moreover they are not only suitable for large national and international projects but also for smaller projects since they can also lead to considerable risks for the companies involved.