Week 7 Risk Paper
First I had to understand the objective to be able to differentiate between the two. They are very similar. Both are looking at the same elements; these being, Project elements, Risk likelihoods, Potential impacts, Risk factors and branching off to the descriptive elements of those.
The case study is a major high-technology project with the members being experienced in this type of contractual tendering. They have used the tendering process before and can quickly find and contract one or more suppliers efficiently.
Phase 1 defines establishing and documenting the risk baseline of the company. This is a comparative technique against contractors but is based mostly on assumption. The initial information in Phase 1 based on project documents and the request for tender itself.
Phase 1 is able to establish a baseline. They start with the actual project documents, which aren’t used in Phase two as is the risk assessment.
What is similar with both phases is what is involved in briefing the project documents and briefing the risk assessment. With both there is a review for the sources of risk, assessing the effects of the risk, and combining the likelihood and impacts of the risks.
Phase 2 in contrast to Phase 1 is based on the risk baseline that has already been established. Phase 2 provides guidance based on the tenderers approach, so is not assumption based. It is derived from the actual tenderer’s responses.
A difference with Phase 2 is that the tender documents have already been prepared and can be defined. In reviewing the documents in this phase there is a better chance in identifying sources of the risks and comparing these findings among contractors, as they all will have them.
Another difference in Phase 2 is the detailed description of changes to the baseline assumption that can be made. This gives a clearer view for better decision making.
What is different in both of these phases are the detailed descriptions. In Phase 1 the tender is obligated to a detailed description of the main assumptions and reasons and then in Phase 2 the tender is obligated to the detailed description of the changes to baseline assumption for a certain tender, with an amount of reasoning.
Another contrast is that in Phase 1 risk factors provide a risk baseline for comparing submitted tenders.
Phase 2 provides modified risk assessment for each tender. This can provide a way to detail a quantitive analysis of what is most important or proven and rate the assumptions the same. This is based on the tenderers responses so can have more of a real-time impact on the information assessed from the actual documents.
In Phase 2 when the team is reviewing resources offered it is very important to use the information that has been gathered to avoid the following: prevent a lack of communication, prevent disputes with serve providers and decrease time and cost overruns.
I thought that Phase 1 was a bit easier to follow. I realize; however, that I would have to be involved in many of these processes to be able to truly utilize the benefits they offer.
In conclusion, I would rather be involved in Phase 1 as is more structured and you are able to actually record information used for rating with the worksheets that are incorporated in this process. This gives the team a chance to thoroughly review all the information before passing it on to Phase 2.