For Ann Harris

Christopher Mihun

Risk Management Plan Scope and Identification – Sydney Opera House Project

PM650-1801B-01

Professor Al-Nizami

Risks Associated with the Project

The development of the Sydney Opera House was scheduled to be completed in 4 years with a budget of around AUD 7 million. But the project ended costing more than AUD 102 million and 14 years to complete. The risks associated with the development of the project include:

i. Incomplete designs which resulted in poor structural planning and delivery of the project.

ii. Poor stakeholder involvement in the due process and project planning

iii. Lack of project leadership from the project manager

iv. Lack of project progress reports and this hampered the performance appraisals

v. Poor Cost Estimates and budgeting

vi. Incomplete designs requirement gathering

vii. Failure to keep within the cost estimate.

viii. Inability to meet the completion timeline

ix. Changes in project scope and requirements.

x. Project scope and design changes.

xi. Lack of project change controls and Scope of the project

xii. The pressure to deliver projects on an accelerated schedule.

xiii. Inaccurate contract time estimates.

xiv. Lack of communication between project participants.

xv. Inadequately defined roles and responsibilities.

xvi. Insufficient skilled staff.

xvii. Political risks.

xviii. Poor task and roles assigning among the project stakeholders

xix. Inexperienced project managers

xx. Lack of stakeholders engagement in the development of the project development

Techniques Used to Identify the Risks

There are different techniques which can be used in the risk identification and this will be critical to risk assessment and management in any project. Based on the project carried and developed by the Sydney Opera House, risk identification was conducted through the use of risk screening using risk registers and identification of the risk associated with the project (Shenhar, Aaron, & Dvir, 2007). The risk registers as indicated in the table below, it indicates the process of meeting and identification of the critical risks which impacts the different phases of the project. The project considers the development of a construction project which takes into consideration process of planning, site reconnaissance and survey. It is only possible by ensuring there is a process for engaging in the managerial of risks and their root causes. Therefore, through root cause analysis, the risks as identified were analyzed and this helped in the planning, development and recognition of the necessary and ideal breakdown phases or work structures(National Research Council, 2005). The risks identified also were conducted through work uncertainties and checking the work phases such as planning on the phases and plotting the risks through risk registers. Risk registers indicates the ranking the risks in terms of impacts, probability and hazard level.

Stakeholders involved in the Risk Process

The risk identification involves all the stakeholders of the project. In this case study, stakeholders of the Sydney opera house include: the engineers in the design and system analysts in gathering the facts from the owners, the New South Wales Government. The stakeholders are the active members in the designing of the project (National Research Council, 2005). The architecture planning and designing was the sole responsibility of architect Utzon. They are able to identify the risks and develop the root cause analysis in the gathering of facts and designing of the opera house. The incomplete designs was due to the change in the scope of the project. The owner, the New South Wales Government considered the process of choosing the right to change the scope of the project. This impacted the responsibility of the architect and how to fully develop the project without completion of its designs. The financing of the house such the New South Wales Government also faced challenges in financial budgeting and allocations of resources to the construction of the opera house.

Qualitative and Quantitative Risk Ranking

Risk	Probability	Impact	Hazard Level
1. Poor Cost Estimates and budgeting	3	3	Critical
2. Incomplete designs	1	4	High
3. Failure to keep within the cost estimate.	3	4	Critical
4. Inability to meet the completion timeline	4	3	Critical
5. Changes in project scope and requirements.	1	3	High
6. Project scope and design changes.	2	2	Low
7. Pressure to deliver project on an accelerated schedule.	2	2	Low
8. Inaccurate contract time estimate.	3	4	Critical
9. Lack of communication between project participants.	3	4	Critical
10. Inadequately defined roles and responsibilities.	1	4	High
11. Insufficient skilled staff.	1	2	Low
12. Political risks.	4	2	Medium
13. Lack of stakeholders involvement in the project development and progress	3	4	Critical
14. Inexperienced project managers	2	4	High
15. Poor and lack of task and role assigning amongst the stakeholders of the project.	3	4	High
16. Lack of project change and scope control of the project	4	5	Critical
17. Lack of project progress reports and this hampered the performance appraisals.	2	4	High
18. Poor stakeholder involvement in the due process and project planning	2	5	Critical
19. Poor project manager leadership	2	4	High
20. Poor project design planning in meeting the structural planning and delivery of the project.	3	5	Critical

Project Sponsor’s Risk Tolerance Level

With the objectives of the architect and the client clashing, the time and cost of the project was ignored, which in turn proved to be very problematic. In the long run of the project, the New South Wales government decided to change the architect, which did not do the project any good either in cost or time management. As the project manager and sponsor for the Opera House development, it did not meet the expectations, process and planning to improve and help in the support and operational performance (McNeil, Frey, & Embrechts, 2015). The sponsor needed clarification on the project, which accelerated the project from the initial 3 phases to 4 phases of the construction design. The sponsor also had a low level risk assessment and management or consideration. The initial financial budgeting for the project was as AUD 7million and a timeline of 4 year to the completion of the project. Eventually, the project cost more than AUD102 million covering 14 years of development. This indicates poor planning and resource management from the project sponsor.

References

Bent, F. (2014). What You Should Know About Megaprojects And Why: An Overview. Project Management Journal, 45.2, 6-19.

Edwards, L. (1995). Practical Risk Management In The Construction Industry. Thomas Telford.

McNeil, A. J., Frey, R., & Embrechts, P. (2015). Quantitative risk management: Concepts, techniques and tools. Princeton university press.

National Research Council. (2005). The Owner's Role in Project Risk Management. National Academies Press.

NSW, G.O.V (2018). About Sydney Opera House. Retrieved Feb 17, 2018, from: http://www.eoi.es/blogs/cristinagarcia-ochoa/2012/01/14/the-sidney-opera-house-construction-a-case-of-project-management-failure/

Phil, N., Harrington, M., &Parker. D. (2012). Leadership Performance Is Significant To Project Success Or Failure: A Critical Analysis. International Journal Of Productivity And Performance Management, 61.2 ,204-216.

Shenhar, Aaron, & Dvir, D. (2007). Project Management Research-The Challenge And Opportunity. Project Management Journal, 38.2, 93.

Smith, N. J., Merna, T., & Jobling, P. (2009). Managing Risk: In Construction Projects. John Wiley & Sons.

Utzon, J. (2002). ‘Design Principles: Sydney Opera House. Utzon Design Principles. Sydney: Sydney Opera House.