The Project Risk Maturity Model

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T h e P r o j e c t R i s k M a t u r i t y M o d e l projects should find that not only more of its projects are delivered to plan, but that they are also more likely to have adopted the right project strategy when being planned. Risk management solutions will have been built into projects from the outset. Moreover, the techniques required for best practice are not always complex or time-consuming. Indeed, in the earliest stages they might be very simple (albeit not simplistic). What is required is that the right things are done by the right people at the right time. Risk Maturity Model Questions The Project RMM contains 50 questions, each one of which can yield information about a project’s risk management process from one or more perspectives. For example, Question C2 (see Chapter 8, pp. 134–5) asks: ‘How effectively do risk owners fulfil their role?’ Since risk owners are responsible for managing their risks, the answer to this question will yield information about whether or not risks are properly understood (a key aspect of risk analysis) responded to effectively and whether or not the project has a good risk management culture. The model is based on a structure of six perspectives: 1. 2. 3. 4. 5. 6. Project stakeholders, risk identification, risk analysis, risk responses, project management, and risk management culture. Each of the fifty Project RMM questions is detailed in Chapters 6 to 11. The assessor selects the level of performance being achieved by the project in respect of each question. The options for each question range from A (Level 4) through to D (Level 1). Occasionally, a question may be inapplicable to the project concerned. If the ‘not applicable’ option is selected, the question is disregarded in the calculation of results; in effect the question is neutralised. When answers to all 50 questions have been selected, the RMM results can be viewed in bar chart form as illustrated in Figure 1.2. The bar chart bar heights reflect the capability level from each perspective. If all answers were to be assessed as being A, all six bars would touch the top of the bar chart. In contrast, if all answers were assessed as being D, no bars would be visible since each would be calculated as being zero. The calculations use a system of weightings that reflects the relevance of each question to one or more RMM perspectives. The relative importance of questions within each perspective is also reflected in the weightings. Assessing Overall Risk Management Capability The overall assessment of risk management capability is equal to whichever is the weakest of the six perspectives. Figure 1.2 illustrates this approach by showing the overall assessment to be level with the top of the risk responses bar (the weakest perspective in this case).
T h e P r o j e c t R i s k M a t u r i t y M o d e l 100% Level 4 75% Level 3 50% 25% Level 2 Overall Asessment Level 1 Stakeholders Risk Risk Risk Project Culture Idnentification Analysis Responses Management Figure 1.2 Example of the results from a Project RMM Assessment This method used to assess overall risk management capability has two advantages. First, it resolves any ambiguity produced by results that show different levels of capability from amongst the six perspectives (something that is very common in practice). Second, it identifies where to focus the priorities for process improvement. For example, in the case of the project assessment shown in Figure 1.2, the priorities for improvement would concern risk responses. Improvements to the risk management culture would also be required to reach Level 3. The justification for equating the overall assessment of capability with the weakest RMM perspective is based on the principle that process capability from each of the six RMM perspectives is critical to the overall risk management process. The overall process capability therefore cannot be better than the process when assessed through any of the individual perspectives. The argument that this applies to four of the six perspectives is illustrated in Figure 1.3. This figure shows the mapping of the risk identification, risk analysis, risk response and project management perspectives to an outline of the core risk management process detailed in the APM’s PRAM Guide (2004). The PRAM Guide process is shown by the boxes and arrows, whilst its mapping to the RMM is shown by the regions bounded by dashed lines. In order to function properly, the risk management process is dependent on every one of the activities shown in Figure 1.3. For example, if risk responses were never implemented, the effort spent on other aspects of the process would be wasted, even if they were performed excellently. Equivalent arguments can be made for each of the other three RMM perspectives shown in Figure 1.3. For example, if the project management process fails to initiate the risk management process appropriately or if it fails to manage it continuously (for example, through review processes), then the risk management process will be ineffective. It will be similarly ineffective if the wrong risks are identified or if risk analysis fails to create a correct understanding of the implications of risk and how it can be managed.
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