Reducing risk in complex projects

Reducing risk in complex projects

Sep 27, 2021

For our September Insights Q&A event, our first after the summer break, we had Grant Avery, a risk management consultant at Outcome Insights, to speak to us about reducing risk in complex projects.  

We discussed the reasons why mega projects fail (over time, over budget or under benefit) and recommendations for reducing the risk of this happening. We also covered some of the dangers for fusion of time and cost pressures, coupled with optimism bias, that makes predicting costs and timescales prone to error.

Here are a few take-aways from the event:

1. We all have a tendency to hope for the best

Optimism bias—‘the wide-spread tendency of project business cases to under-estimate a project’s capital costs and overstate benefits’—is responsible for many complex projects going over budget. In the absence of explicit measures to manage contributory factors, non-standard civil engineering projects could add ~66% to their capex at Outline Business Case stage, and equipment/development projects (such as fusion) could add up to 200%! 

2. The average project often doesn’t complete to time or budget

According to the Project Management Institute (PMI) Pulse of the Profession Report, 2021, for the average project:

45% didn’t complete on time

38% didn’t complete within budget

35% failed - budget lost

28% didn’t meet original goals or business intent

3. And fusion projects are NOT average.

So it's definitely worth looking into specific measures to manage project risk.  

Replays of all Insights Q&A sessions are available to FEI members.

Oh, and one of our members recommended a YouTube channel called Megaprojects, which covers lots of crazy, complex projects. Enjoy!

A full pdf summary of key insights, plus the Q&A event replay, is available to Game Changer members of Fusion Energy Insights. Join us now for full access to all the insights.

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