Project Risk Management: Essential Methods for Project Teams and Decision Makers

CHAPTER NINE

Risk-Based Selection of Engineering Design Options

Questions Addressed in Chapter 9

• Why is risk-based selection of options better than and preferable to risk management of a given option?
• How may a standard risk management methodology help engineers?
• What kind of template can be used for engineering design option selection?
• What is a controlled option selection decision tree and how might it help when there are numerous options?

THE TRADITIONAL SITUATION IN risk management is that project teams define baselines first and then investigate given project risk exposure. The usual logic is that project objectives and baselines are developed and all major project choices and decisions are made first by corresponding functions such as engineering, procurement, construction, and so on. Risk management steps in to manage given uncertainties that are predetermined by the preceding choices and decisions. It is certainly not proactive, but it is a common methodology. It is more reasonable to start using risk management methods at an earlier stage when options are being contemplated and selected. This is the most efficient way to control uncertainty changers.

Only project options with minimal risk exposure should be selected in the first place. This risk-based informed decision making is ideally applicable to options at both the work-package and project levels and beyond. ...