Prepare for Risk Management
In late 2013, WSP was retained by Hydro One Networks Inc. (Hydro One) to provide project risk management services on Hydro One’s large capital projects. The 15-month engagement consisted of three phases:
- Document review, consultations, and planning
- Development of project risk framework, consistent methodology, and supporting risk applications
- Execution and facilitation of risk assessment workshops
Key Success Factors and Challenges
- Collaboration and coordination of various stakeholder interests was important for consistency across the organization in adopting a standardized project risk management framework.
- Promotion and knowledge transfer for successful continuation of risk management methodology by client staff at the end of the project.
- Lack of previous project documentation on risk identification made data collection difficult to develop a historical project risk database.
Deploying a Three-phased Approach
Phase 1 – Document review, consultations, and planning
- In the first phase, WSP developed a clear definition of Hydro One’s objectives and a thorough understanding of its risk tolerance, risk processes, organizational constraints, and governance frameworks. This knowledge was gained through documentation review (corporate risk policies and procedures, organizational charts, and governance frameworks) and extensive interviews with key stakeholders.
Phase 2 – Develop project risk framework, consistent methodology, and supporting risk applications
- During the second phase of this engagement, WSP continued to work extensively with Hydro One stakeholders to develop a project risk management framework; a consistent methodology to perform activities; and a customized application to identify, assess, prioritize, and monitor project risks throughout the lifecycle of the project. The resulting model included a built-in Monte Carlo simulation to better measure risk on a quantitative basis, with confidence modelling and scenario planning.
Phase 3 – Execution and Facilitation of Risk Assessment Workshops
- In the third phase, WSP applied the newly designed methodology and risk management models to Hydro One’s capital project. The scope of work completed during this phase included facilitating risk assessment workshops with key stakeholders, quantifying risk levels, and developing appropriate response strategies to minimize retained risk.
Our team delivered the following:
- Risk Management solutions were developed to guide risk management activities throughout the project life cycle.
- Quantitative risk analysis modeling applications were customized to meet Hydro One’s specific needs.
- Risk assessment workshops were facilitated to identify, analyze, and produce risk response strategies to proactively plan for project risk with optimum input from stakeholders.
- A Risk Management Plan was developed to enable project managers to make better informed decisions under uncertainty across every phase of the project life-cycle.
In sum, the development of the project risk management processes, methodology, and tools, along with the knowledge transfer efforts, has provided Hydro One with a strong foundation to continue to foster a robust, valuable, and sustainable project risk management program.