P roject Ri sk Ma nagement

1. Project Risk Management Project funded by the EC under the Information Society Technology - 1999/2002 Corporate Knowledge Management Duration : 24 months 9 Partners, 4 Countries

2. Objectives In the field of RISK and KNOWLEDGE management : Define a method , develop a supporting tool, and disseminate both. to capitalise, estimate and organise risks to improve the competitive value during the BID phase • a “ Management by Risk ” Method; • a Risk Management Corporate Memory; • a Decision Support System for Bidding. • The tool includes a « risk » database and provides dashboards to support the decisions.

3. PARTNERS European Partners (France, Spain, Greece & Italy) • Alcatel Space Industries • University of Toulouse 1 (Department of “Sciences Sociales pour l’Ingénieur”) • CR2A-DI (Software house specialised in the use of IC technologies) • AICIA (Andalusian Association for Research and Industrial Co-operation) • SAINCO (Manufacture and assembly of industrial process control and monitoring instruments. Integrated into ABENGOA, most important Spanish industrial consortium) • NTUA (National Technical University of Athens - Mechanical Engineering Department) • HCSA (Hellenic Company for Space Applications - Established by Alenia Aerospazio Spa & Comersa Ldt) • Politecnico di Milano (Mechanical Department) • Snamprogetti (Engineering and Main Contracting company - Integrated into ENI Group)

4. Main Innovative features • early life-cycle decisions (bidding process or conceptual phase). • To take risk as the most powerful driver integrating all other preoccupation’s • reengineering and knowledge sharing • PRIMA builds a corporate memory as a fundamental reference to provide internal and external information for bid process. • Standardisation

5. Project status • EC / PRIMA is ambitious, innovative, interesting • Collect of users‘ needs and building the method : Different types and cultures of biding process have been integrated in one bidding model • Although there were some scientific discussions, after revisions all the deliverables have been accepted so far • external risk: until now it is faced in a similar way as internal risk although it is clearly stated that its nature is quite different • Re-orientation of Wp2 & 3 to a Prototyping development process and re- distribution of the partners roles in order to enhance interaction between theory (universities) and practice (enterprises) • 3 rd prototype is available for tests by users

6. PROTOTYPES development 1st prototype 2nd prototype 3rd prototype 4th prototype 5th prototype Conseptual level + Technical Solution building Physical level Risk Management analysis Implementation of links (knowledge mgt) Common data Integration of advanced features Ergonomic and customisation finishings

7. PRIMA ouverture • The bid process is a representative of any project process where a decision is central : why not extend PRIMA to a whole project ? • the toolkit means to cover the needs of bid engineers to top management (access rights)

8. Method The PRIMA method focuses on the bid process. The method allows the building of technical solutions. To choose between several technical solutions, the method supports cost estimation and risk evaluation.

9. Definitions • Risk: Opportunity vs. Hazard, Internal vs. external risk • Risk description process: Cause, known by its probability; Risk, known by risk exposure ; Impact, known by its gravity ; Mitigation Actions • Opportunity: The cumulative effect of the chances of uncertain occurrences, which will affect project objectives positively. Opportunities are considered in PRIMA as positive risks. • Hazard: A condition associated with the design, operation or environment of a system that has the potential for harmful consequences. Hazards are considered in PRIMA as negative risks. • Internal Risk: Internal risk is the risk that is supposed to be under the company control, about its products, processes and resources. • External Risk: External risk is the risk that the company does not control, such as market shifts or government action, or the product interactions with the environment or the customer after product release. It can be regarded as external constraints.

10. RISK evaluation Method • Identification • assessment • ranking-prioritisation • mitigation actions • iteration

11. Internal Risks (Experience / Knowledge) Risk Management & Knowledge DataBase Bid / No Bid External Risks (Experience / Knowledge) Knowledge over time PROCESS Request For Proposal Analysis Bid Proposal

12. The PRIMA TOOL The PRIMA tool objective is to support the method. it is a co-operative support system

13. Technical memory • The repository of the overall company expertise/knowledge contains all technical and organisational information that is required for bidding. • The aim is to improve the ability of companies to prepare reengineering of their entities and processes as soon as or even before a bid is successful. • This goal is achieved by : a database of recurring entities and processes or of entities that can be reused, if necessary with adjustments, by bid managers. • The repository can be used by all actors involved in the bid processes. • The impact of a co-operative repository is to facilitate and improve the capitalisation and exchange of knowledge.

14. Costs memory • Costs are allocated to the resources used by the processes (analytical cost estimation)

15. Internal Risk memory act on act on

16. Decision support system external Information internal Information data base External Risk Internal Risk Models dashboard, value analysis Price Cost Decision

17. Conclusions Expected Improvements

18. Expected Improvements (1) For Company Continuous Improvement during the project and on the short term :during bid process • Inserts risk management in the RFP phase: • Supports a risks management plan early at the beginning of the contract • Conducts a documentation on the risks associated with the projects • Organizes the risks experience/knowledge return from the bid phase start

19. Expected Improvements (2) • supports decisions : Bid / No bid & Make or Buy • Support to bid construction (rapid evaluation from experience return) • Technical solution choice support : evaluation and comparison through risk assessment in parallel of external elements • better experience feedback from previous bids • good decision probability improvement • Co-operative work during bid process • high level of visibility and integration for top management (Company position)