Risk Management Issues in Programme Management

By Alchemmy’s Lola Bulow

I’m sure all Project Managers will agree that good risk management goes beyond building a risk log and you’d be naïve to think that risks and issues outside of this won’t crop up.

Acknowledging that risk management is a broad area, I will focus this blog on why intelligent risk monitoring is essential to actively mitigate risks throughout the project lifecycle.

The scale and variety of the risks within the public sector makes it very challenging to deal with. The majority of the Government’s Major Projects Portfolio (GMPP) focuses on infrastructure programmes which can be a minefield to navigate through. We only scratch the surface of the various layers, however we should explore risk management, or the lack of, in the early phases of these programmes.

The cost of poor risk management

It’s predicted in the UK that tens of billions of pounds are being wasted by badly run public programmes from IT to infrastructure.[1]  For example, the New Prisons Programme was set to deliver 10,000 new prison places with the latest being by 2026, however, due to failed planning permissions the programme is now set to complete in 2027.[2]  With the pressure of prison places running out, a setback like this has led to major risks in the prison services. With a potential new government set to shake things up, the need for a better grasp on public sector projects is essential.

The Green Book way

At the programme definition phase, a risk analysis is usually carried out at a high level with no real in-depth analysis. A comparison against other programmes of a similar vein is often missed, which ultimately would be very beneficial for the programme at a later stage. The government’s Green Book Business Case process outlines the requirements for risk analysis to be included in various parts of the Business Case, including a Risk Profile Assessment (RPA) to assess the overall risk impact of the programme.[3] Despite the need for extensive risk inclusion in the Business Case, effective risk management tends to stop there with an unused RAID log usually collecting dust in a Teams archive.  

Let’s put this into perspective further

High Speed Two (HS2) was the highest value programme in the GMPP as of July 2020.[4] A major lesson learned taken from the NAO audit on GMPP stated that estimates at the project concept stage are mostly high-level, becoming more detailed once the scope of the programme has been developed. However, this lack of information opens many areas for potential risks later such as cost and schedules exceeding estimates through working on assumptions.[5] At Alchemmy, we focus on ensuring that active risk management is embedded into the programme from the beginning using our expertise. We do this through removing the emphasis on not just the individual project’s risks, but seeing the bigger picture of programme’s risks at a strategic level and ensuring that the unknown unknowns have action plans against them, making the mitigation process much easier.

So where did it go wrong and how could it have been improved?

Problems for HS2 began once the initial contracts were signed, with contractors advising costs would be 50% more than originally budgeted.[6] To add to their woes, geological surveys were also not favourable, requiring a lot more reinforcement than first planned. Eventually, Phase 1 withstood a delay of 21 months, a complete oversight from the original planning.

This is only one example of where public sector projects have gone wrong. The government needs to deliver more but is struggling. More examples include issues with Crossrail and the new, swanky Elizabeth line – similar scenarios happening time and time again. [7]

Our view is that through in-depth programme definition, such as undertaking feasibility with a range of contractors at the beginning could’ve prevented a surge in costs in the latter stages. In addition, early feasibility of locations determining whether the programme was worth pursuing could’ve prevented cost and time being wasted.

Alchemmy’s Programme Diagnostic Service

So where can Alchemmy come in? Through the use of our diagnostic service, we can offer a tailored approach to really understand the needs of your programme and ensure that risk analysis is not only done at the project definition phase but the process is future-proofed throughout the programme’s life cycle.

Risks will be actively managed and reviewed on a frequent basis, covering not only the project’s individual level but can also provide a bird’s eye lens of what could be coming down the track. Our service will unpick pre-identified challenges your programmes and projects are facing and instead will provide solutions to deliver successful outcomes.

Let Alchemmy’s Programme Diagnostic Toolkit be your partner in delivering successful programmes.

For more information on our Programme Diagnostic Service, please contact:

Adam Kearns

Head of P3M Centre of Excellence

Email: adam.kearns@alchemmy.com

Contact: +44(0) 7900 783962

 


[1] https://www.theguardian.com/society/2024/jan/16/uk-wasting-tens-of-billions-on-crumbling-infrastructure-and-badly-run-projects

[2] https://insidetime.org/newsround/exclusive-new-prisons-cant-open-before-2027-prison-service-official-admits/

[3] https://assets.publishing.service.gov.uk/media/6644948aae748c43d3793bb9/Programme_Business_Case_2018.pdf

[4] https://www.nao.org.uk/wp-content/uploads/2020/09/Lessons-learned-from-Major-Programmes.pdf

[5] https://www.nao.org.uk/wp-content/uploads/2020/09/Lessons-learned-from-Major-Programmes.pdf

[6] https://www.theguardian.com/uk-news/2020/jan/24/hs2-high-speed-rail-europe-infrastructure-project

[7] https://www.bbc.co.uk/news/uk-england-london-67704738

Written by

Sam Smitherman

Published on

00th July 2024

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