Assessing Risks in Projects and Processes

Faculty of Business Economics, University of Verona, Italy 

According to the definition given by organization theory, companies are open systems that relate to other external entities - such as suppliers, third parties, 

The characteristics of processes and projects are therefore almost alike both involve working with multiple relationships, are goal-driven and ran in parallel. The definition given by the ISO 10006 Standard, suggests that projects are unique processes. According to this definition, a project consists of a set of coordinated and interrelated activities, which may be part of a larger project structure and is undertaken to achieve a specific objective. As some authors remark (Lundin et al. 2001), projects are devised and scheduled to pursue specific performances, especially regarding the achievement of primary objectives. 

A major difference between processes and projects is that processes are potentially continuous and need to reach the objective of being lean and agile, where agility involves the ability to react quickly to the market. On the other hand, projects are start and finish dated by nature. Moreover, projects define objectives 

A network structure composed of processes and projects may have - like a supply chain - a horizontal and vertical dimension. External partners may join the effort at each stage of these processes and projects in order to contribute to the achievement of the various objectives (Gaudenzi and Borghesi 2006). 

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To learn how to cope with the evolution of organizations and how to assess risks, it is necessary to describe some characteristics that apply to both projects and processes. The four drivers for success in projects and processes have been identified. These win drivers are ... 

Process Safety Analysis This part treats the analysis of a process or project from the standpoint of hazards, risks, procedures for making potential damage estimates, and project reviews and audits. It can be helpful to management in assessing risks in a project. It consists of the following ... 

The outcome of the risk assessment process must be recorded and appropriate safety information must be passed on to those at risk. For most practical classes, risk assessments will have been carried out in advance by the person in charge and the information necessary to minimize the risks to students may be given in the practical schedule. You will be asked to carry out risk assessments to familiarize yourself with the process and sources of information. Make sure you know how your department provides such information and that you have read the appropriate material before you begin your practical work. You should also pay close attention to the person in charge at the beginning of the practical session, as they may emphasize the major hazards and risks. In project work, you will need to be involved in the risk assessment process along with your supervisor, before you carry out any laboratory work. Any new materials synthesized during the project should be treated with the utmost respect. An example of a risk assessment is shown in Fig. 2.2. 

Projects and processes involve working with multiple relationships, inside and outside each team. At the same time, processes are potentially continuous and projects are start and finish dated by nature. All the activities need coordination in order to achieve the primary objectives. In this context, risks take different forms, such as dismptions, reductions in service or performance levels and delays. It is critical that each organization implements an integrated assessment of risks threatening the performance of the entire network and projects and processes. 

Remember as you set priorities that you and your team must consider the expected benefit to the company, division, or unit as a whole, rather than simply addressing a single gap. Obviously, any specific immediate risk you identify in the course of your assessment must be dealt with quickly and responsibly however, be careful not to let anomalous findings skew your perspective on broader priorities. For example, the absence of a capital project review process is a significant gap. However, if there is only one project per year this gap may have lower priority than an existing but seriously deficient operator training program. 

William R. Rhyne received a B.S. in nuclear engineering from the University of Tennessee and M.S. and D.Sc. degrees in nuclear engineering from the University of Virginia. Dr. Rhyne is currently an independent consultant and earlier cofounded H R Technical Associates, Inc., where he remains a member of the board of directors. He has extensive experience in risk and safety analyses associated with nuclear and chemical processes and with the transport of hazardous nuclear materials and chemicals. From 1984 to 1987, he was the project manager and principal investigator for a probabilistic accident analysis of transporting obsolete chemical munitions. Dr. Rhyne has authored or coauthored numerous publications and reports in nuclear and chemical safety and risk analysis areas and is author of the book Hazardous Materials Transportation Risk Analysis Quantitative Approaches for Truck and Train. He is a former member of the NRC Transportation Research Board Hazardous Materials Committee, the Society for Risk Assessment, the American Nuclear... 

Gather the requirements for the systems including functional (e.g. operational checks) requirements, nonfunctional (e.g., coding standards) requirements, users, company-wide regulatory compliance (e.g., Part 11 technical control), safety, process, and other applicable requirements Characterize information, assess its value to the organization, and incorporate information quality as part of the project plan Conduct a system (hardware, software, and process) risk analysis. New requirements may be found as the result of the risk analysis. Any new requirements must be documented in the requirements specification deliverable... 

But at the same time the regulation drafters are faced with the still more difficult job of doing a risk evaluation. That is, they must recommend public policy decisions as to the acceptable levels of risks for a variety of hazardous waste activities, e.g., acceptable minimums for the efficiency of destruction of hazardous wastes by incineration. In principle, this process may be not unlike the decisions made by a banker about a potential loan, or an insurance underwriter in setting the rate for an insurance policy a risk assessment is made, and an appropriate safety margin is factored into the interest rate or the policy premium to arrive at an acceptable level of risk for the individual case (but based on experience and projections for a large number of cases). 

Risk assessment evaluates risk in terms of hazard and exposure, but reference to risk levels must account for different perceptions of risk as well as scientific uncertainties in risk assessment. In short, this research project considers the importance of social and institutional processes in influencing risk perceptions and risk acceptability. This book therefore takes a constrained relativist approach by incorporating risk perceptions in the research framework. An unconstrained relativist perspective would imply that no scientific study is reliable or robust. By contrast, a constrained relativist approach can provide a useful basis for examining the different social and cultural factors involved in regulatory risk management. 

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