Dynamic Analysis of Project Risk

In the management of large-scale projects, Project Risk Analysis and Management is of great importance for the project success. In particular, consideration of the dynamic aspects of project risks leads to more effective risk management during the project life-cycle. Furthermore, the dynamic analysis of risk has an impact on the project scheduling, the use of resources over time, the planning of response actions, the contract administration and the financial management of the project. In a project life-cycle, the preliminary phase is particularly critical, as it is the time when important strategic decisions are taken without the help of detailed information on times and costs. The risk analysis developed during the project early phase seeks to identify the sources of uncertainty and to develop response actions to limit the risks and favour project opportunities. Firstly the paper proposes an approach to risk dynamics analysis during the project early phase in order to improve the identification and implementation of suitable response actions and secondly an approach is proposed to monitor and control the global project risk during the entire project life-cycle by defining a Project Risk Baseline. Both approaches have been applied to a very ambitious project with a considerable economic and political impact. The project, concerning a new Trade Fair, was characterised by particular features: the size and complexity of the project management, the political support necessary for its realisation, the selection procedure to assign the contract based on the General Contractor formula and the limited time available to complete the works