APPLICATION AS/NZS ISO 31000 RISK MANAGEMENT PROCESS

Application AS/NZS ISO 31000 Risk Management Process to Emergency Risk Management

Application AS/NZS ISO 31000 Risk Management Process to Emergency Risk Management

General

The success parameters for any project are on time completion, within specific budget and with requisite performance (technical requirement). The main barriers for their achievement are the changes in the project environment . The problem multiplies with the size of the project as uncertainties in project outcome increase with size. (Dey 2008, pp. 1384-1395) Large-scale construction projects are exposed to an uncertain environment because of such factors as planning and design complexity, presence of various interest groups (project owner, owner's project group, consultants, contractors, vendors etc.), resources (materials, equipment, funds, etc.) availability, climatic environment, the economic and political environment and statutory regulations (Chapman, 2006, 303-313). Although risk and uncertainty affect all projects, size can be a major cause of risk . Other risk factors include the complexity of the project, the speed of its construction, the location of project, and its degree of unfamiliarity (Saaty, 1990, 2-8).

Communication and consultation

Risk management is the systematic process of identifying, analyzing and responding to AS/NZS ISO 31000. It includes maximizing the probability and consequences of positive events and minimizing the probability and consequences of adverse events to project objectives (Chapman, 2006, 303-313). Risk management has six steps (Saaty, 1983, 140-155). They are risk management planning, risk identification, qualitative risk analysis, quantitative risk analysis, risk response planning, risk monitoring and control . The detailed description of the above steps is available in Project Management Body of Knowledge (PMBoK), 2000 . The AS/NZS ISO 31000 sets out five steps for risk management - establish the context, identify the risks, analyze the risks, evaluate the risks, and treat the risks (Zayed, 2008, 406-419).

Establishing the context

The proposed risk management framework (Fig. 1) has the following steps:

1. Identify the alternative projects.

2. Analyze project level risks and select the least risky project using the AHP.

2.1 Identify risk factors.

2.2 Identify risk subfactors.

2.3 Develop hierarchical model for selecting the least risky project.

2.4 Compare pair wise in factor level in order to develop importance of the criteria in terms of probability of occurrence and impact.

2.5 Compare pair wise in subfactor level in order to develop their importance in terms of probability of occurrence and impact (Zayed, 2008, 406-419).

2.6 Compare the alternative projects with respect to each subfactor in order derive severity of each project.

2.7 Synthesize the results across hierarchy to determine relative severity of the projects and their risk ranking.

3. Develop scope of the selected project using work breakdown structure.

4. Analyze work package level risks using emergency risk management.

4.1 Develop a emergency risk management with likelihood of risk occurrence in one axis and impact in another axis.

4.2 Identify risky work packages.

4.3 Identify risk factors and subfactors for each risky work package.

4.4 Derive their severity (probability × impact) by placing each risk subfactor on the emergency risk management.

5. Develop risk responses for each risk subfactor in work package level (Zayed, 2008, ...